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Aloha Utilities is ordered to give back $278,000

Customers of Aloha Utilities, the embattled water supplier to parts of southwest Pasco, might receive a second refund check after a state regulatory board ruling Tuesday against the company.

The Public Service Commission ordered Aloha to return about $278,000 that had accrued in an escrow account since the utility was granted an interim rate increase in November 2001.

"We're a little taken aback by the decision," Aloha attorney F. Marshall Deterding told the Times.

When a permanent increase of 55 percent was denied on appeal, Aloha was made to refund $153,510, an amount that represented nearly 5 percent of a 15.95 percent interim rate boost.

Credits were issued last summer, with customers getting about $7 each. But then some critics, including state Sen. Mike Fasano, said Aloha did not give enough.

That led to Tuesday's hearing before the PSC in Tallahassee. The arguments were technical, but in short, the board agreed that Aloha also should refund fees collected while its permanent rate case was on appeal.

And the board said the refund should be the full 15.95 percent for that period, not the smaller amount previously refunded, according to Steve Burgess of Florida's Office of Public Counsel, which backed Aloha's customers.

The utility, which serves thousands of customers in the Seven Springs and Aloha Gardens areas of southwest Pasco, had not decided Tuesday whether to appeal. Deterding, however, argued that the initial refund decision should have been final.

"Nobody suggested otherwise until long after the case was closed," he said. "Then after the fact, someone came up with a new theory and said you should refund more."

Fasano, R-New Port Richey, claimed another victory for the customers. "My hope," he said, "is Aloha will immediately refund the people's money."

Some customers have long been at odds with Aloha, complaining about the quality and clarity of its water. To prove their point, residents have brought jugs of dark water to PSC meetings. Aloha, in turn, has said copper pipes in customers' homes are to blame.

Some customers are engaged on a different front. An advisory group created by PSC order is eagerly awaiting the second phase of an independent analysis that explores water quality issues.

The report, conducted by a University of South Florida researcher, will evaluate Aloha's water processing methods, said Abraham Kurian, a member of the advisory group. "We felt Aloha should have admitted that it was inadequate," Kurian said of the treatment system.

_ Alex Leary can be reached in west Pasco at 869-6247, or toll-free at 1-800-333-7505, ext. 6247. His e-mail address is