Eugene W from Fort Wayne, IN. Got a new client who runs a mid-size plastics injection molding shop. Pulled his last 24 months of bills from I&M (AEP Indiana) and 14 of them are estimates. Fourteen. The meter is behind a locked fence inside the facility yard and apparently the reader just stopped trying after the first couple of access issues. Demand charges during the estimated periods look like they copied the same number month after month. Real usage is seasonal — summer is about 30% higher than winter because of their chiller system. But the estimates are flat. I think they have been significantly overpaying during winter months and underpaying in summer, but net-net I believe they are overpaying overall. How do you untangle something like this?
Client had 14 consecutive estimated bills — what to do
Eugene, 14 consecutive estimates is extreme but not unheard of. First step: request a current actual meter read immediately. Call the utility and schedule a read with your client present to unlock the gate. Second, request whatever interval data the meter has stored — if it is an AMI meter it may have actual usage data even though the billing system used estimates. That gap between stored data and billed data is where your case lives.
I had a similar case in Duquesne Light territory. 11 months of estimates on a cold storage warehouse. The utility was using a simple average of the last 3 actual reads to generate estimates, which completely missed the seasonal pattern. We got the interval data from the smart meter and proved the estimates overstated winter usage by about 22%. Recovery was $14,800.
Randy — good call on the interval data. I called I&M this morning and they confirmed the meter is AMI capable. They are pulling 15-minute interval data for the full 14-month estimated period. Should have it in 5 business days. Walt — $14,800 on a cold storage facility is encouraging. My client is a similar size operation.
One thing to watch for on the demand side: when they estimate demand, most utilities just carry forward the previous month demand or use an average. But if the actual demand during estimated months was lower — say because the client shut down for holidays or had reduced production — those estimated demand charges could be significantly overstated. And if there is a ratchet clause, those inflated estimates could be setting an artificially high ratchet floor.
Terry makes a critical point about the ratchet. If the estimated demand was higher than actual, and the ratchet is based on highest demand in the last 11 months, the client could be paying an inflated minimum demand charge for nearly a year after the estimates are corrected. Make sure your rebilling request addresses the ratchet reset.
I had not thought about the ratchet implications. Their rate schedule has an 80% ratchet clause. If the estimated demand was 450 kW but actual was closer to 320 kW in winter months, that is a huge difference in the ratchet floor. This could be worth more than the energy charge corrections alone.
Eugene, when you get the interval data, build a complete rebilled scenario month by month. Show what the bill should have been using actual interval data vs what was billed using estimates. Present the total variance as a single number. Utilities respond better to a clean comprehensive rebilling analysis than a bunch of individual month complaints.
Also document the access issue. If I&M can show that they attempted reads and were denied access, they might argue the estimates were the customer fault. But if they simply stopped showing up — which is what it sounds like — that is on them. The utility has an obligation to make reasonable efforts to obtain actual reads.
Update: got the interval data back. This is worse than I thought. The estimates overstated winter usage by about 28% and understated summer usage by about 15%. Net overpayment across 14 months is approximately $19,200. And the ratchet impact adds another $6,400 over the following 8 months. Total case value around $25,600.
$25,600 on a single estimated billing case — that is exactly why you always pull the interval data. Nice work, Eugene. File a formal rebilling request and let us know how I&M responds.
Will do. Client is thrilled. This is his biggest expense after raw materials and payroll, so a $25K recovery is meaningful. Filing the formal request tomorrow. Thanks everyone for the guidance — especially the ratchet angle which I would have completely missed.