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Three Ways Electric Bills May Be Wrong After A Disaster

Lessons from Superstorm Sandy suggest that in the future, facility managers seeking to head off potential post-disaster problems should consider at least three ways electric bills may be wrong, relating to consolidated billing, metering, and who holds the responsibility for an outage's duration.

3. Consolidated Billing Issues. When choosing to simplify paperwork through "consolidated" billing (wherein the supplier's charge is seen on the utility's bill, instead of via a separate invoice), consider carefully how a billing dispute with a supplier will be handled. Not all suppliers offer the consolidated billing option, while others make it mandatory. To handle collection of a supplier's bill, a utility has a "Purchase Of Receivables" (POR) agreement with a supplier. PORs are standard documents that have been reviewed by state public utility commissions (PUCs). If considering consolidated billing, ask the supplier to review the POR's conditions with regard to a billing dispute. If, for example, you pay only the utility delivery portion of the bill, can the utility still issue a shutoff notice for failure to pay the supplier's portion?

4. Metering Issues. While most estimated bills eventually get sorted out through subsequent meter readings, that opportunity was lost when meters were damaged and stopped logging usage. Some replacement meters were apparently taken from stock without being zeroed out prior to re-use. As a result, some "phantom" consumption was read that actually occurred during the meter's prior installation.

The situation worsened when several new meters were installed and their multipliers either input or noted incorrectly, resulting in huge jumps in consumption or billed peak demand in the following month(s). Those erroneous meter readings then served as the basis for erroneous supply bills by non-utility suppliers. In at least one case, an otherwise fixed power price was raised because the big increase in demand (considered a "material change") resulted in raising the customer's capacity "tag", i.e., a wholesale charge the grid operator levied on the non-utility supplier. That higher power price was then multiplied by the erroneous kWh consumption, further exaggerating the financial damage.

As with any meter change out, facility managers should have replacements witnessed, with notes taken on new meter numbers, meter multipliers to be used by the utility in its billing, and first readings (which should be zero). Consumption and demand for the month immediately following a meter change should be compared to the same month in the prior year.

5. Responsibility for An Outage's Duration. One issue complicating power restoration was damage to utility distribution systems. Instead of shutting down a local grid in advance of the storm — and thus avoiding short-circuiting due to salt water flooding — a utility continued providing power until its transformer exploded. It would have been better to lose power prior to and just after a flood (while unpowered distribution equipment dried out) rather than for several weeks while damaged equipment had to be replaced.

That's the position being taken by several hotels that were closed for weeks, resulting in significant lost revenue. Hotel executives were forced into that position when their insurance carriers noted that the length of the outage could have been significantly reduced had the utility planned an orderly shutdown of its facilities. As a result, insurance claims were not accepted under the "act of God" provision for recovery of lost revenue due to a storm. Those carriers told the hotels to "get that money from the utility; your long outage was due to its negligence operating its own equipment."

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  posted on 10/3/2014   Article Use Policy

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