Client moved into a new commercial space in Atlanta on Georgia Power. Their first bill covered a 12-day period from the service start date to the regular meter read date. Georgia Power charged full demand charges on a 12-day period. The peak demand in those 12 days was 45 kW, which is reasonable for the space. But the demand charge was $585 — the same as if it were a full 30-day month. The tariff says initial and final bills shall be prorated. Georgia Power didn't prorate.
Proration on move-in created a phantom demand charge
Move-in and move-out proration errors are extremely common. The billing system generates the bill based on the demand reading without adjusting for the short period. I always check the first and last bills for any client who moved or opened a new account. The proration can also affect energy tier calculations — if the tariff has declining blocks, a 12-day period should have proportionally lower tier thresholds.
Same issue on final bills when a client moves out. The last bill covers a partial month but demand charges aren't prorated. I had a client close a facility in Akron and the final 9-day bill included $1,200 in full-month demand charges. FirstEnergy refunded it after I cited the proration provision.
Proration errors on initial and final bills are among the most common billing errors in our industry. They're easy to find and easy to prove because the tariff provision is explicit. Add first and last bill proration to your standard audit checklist. It takes 30 seconds to check and catches errors on roughly 1 in 3 accounts that have had a service start or stop in the audit period.
Got the $585 refunded in about a week. Georgia Power didn't even push back — they know the proration rule and acknowledged the system missed it.