Corning Natural Gas crisis unique in state, officials say
Corning Natural Gas crisis unique in state, officials say Public Service Commission has had eye on company for three years. By LARRY WILSON Star-Gazette Corning Bureau lwilson@stargazette.com December 4, 2005
CORNING - The crisis at Corning Natural Gas Corp. is "a pretty unique situation," officials at the state Public Service Commission said Friday.
Charles Dixon, director of the commission's Office of Accounting and Finance, and Thomas G. Dvorsky, director of its Office of Gas and Water, said in a telephone interview Friday that other small gas companies in the state are not facing the problems detected at Corning Natural Gas.
Dvorsky's office concentrates on safety, supply portfolio review and rate increase requests. Its staff visits gas distribution companies each summer to determine how well they are preparing for winter.
This year, it found that Corning Natural Gas Corp. did not have adequate supplies of gas to serve its 14,500 customers this winter and did not have adequate cash or credit to obtain those supplies.
The state agency has been concerned with supply portfolio management and financial management at Corning Natural Gas for four years, Dixon and Dvorsky said.
They said the commission concluded that the local utility had mismanaged its pension plan and ordered three years ago that it stop paying cash dividends in order to restore that money.
That resulted in stepped-up attention to Corning Natural Gas's finances and cash flow and to questions about the company's methods of acquiring gas supplies, the commission executives said.
The Corning Natural Gas case has consumed a substantial portion of the staff time in Dixon's office for four years and is expected to do so until the current issues are resolved.
Both men cautioned that they are not prejudging the outcome of the case the commission filed against Corning Natural Gas in October. They said the company has until Jan. 13 to explain its actions. They said they will respect the utility's rights and listen to its explanation.
In addition to sending safety inspectors to Corning and reviewing the local utility's gas-purchasing activities, the commission reviews documents provided by Corning Natural Gas on construction, pension compliance and earnings.
Dixon and Dvorsky said there is an "interactive environment" between the commission and the company that includes exchanging financial information over the Internet.
Those oversight methods are supplemented by regular reviews of the utility's adherence to internal controls, its accountants' opinions, its financing activity and its annual reports.
The commission executives conceded that the natural gas business has become more challenging with the effects of price deregulation and sharp, hurricane-influenced price increases.
But they pointed out that other small gas companies in the state are well-operated and appear to have handled those effects appropriately.
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