Christine L from Minneapolis, MN. This one is a nightmare. My client owns a strip mall and the anchor tenant (a large grocery store) complained their bills doubled overnight. Meanwhile the smaller tenant next door (a hair salon) saw their bills drop to almost nothing. Xcel Energy had recently replaced both meters and apparently the installers swapped them — the grocery store meter was connected to the salon circuit and vice versa. The grocery store has been paying the salon bill and the salon has been paying the grocery store bill for 7 months. Total overcharge to the grocery store is about $38,000. The salon owes about $35,000 in underbilled electricity. My client the landlord is caught in the middle because both tenants are threatening to break their leases over the billing mess.
Client had two meters swapped — billing chaos for both accounts
Christine, meter swaps during installation are one of the most clear-cut utility errors you will ever encounter. Xcel Energy is 100% at fault and they know it. The fix is straightforward: Xcel needs to rebill both accounts for the entire 7-month period with the correct meter assignments. The grocery store gets a $38,000 credit. The salon owes $35,000 but should be given a payment plan since it was not their fault. Your client the landlord should not be financially liable for any of it.
I had a meter swap case in Xcel territory in Minnesota as well. Office building and a restaurant in the same complex. Xcel was responsive once we documented the swap — they sent a tech within 48 hours to verify, corrected the wiring, and processed rebilling within 30 days. The key is getting Xcel to acknowledge the installation error in writing.
Hank, that is reassuring. I called Xcel yesterday and they are sending a tech tomorrow to verify the swap. The challenge here is the salon. They have been enjoying artificially low bills for 7 months and now they owe $35,000 they were not expecting. My client is worried they will refuse to pay and Xcel will try to recover from the property owner.
Christine, the salon cannot be held responsible for an error they did not cause and could not have detected. Most state PUCs have rules preventing utilities from back-billing customers for utility-caused metering errors beyond a certain period. In Minnesota, the PUC limits back-billing for utility error to 6 months. Check the Xcel tariff and Minnesota PUC rules.
Carl, you are right — I checked and Minnesota limits back-billing for utility-caused errors to 6 months. So the salon only owes for 6 of the 7 months. That reduces their liability by about $5,000. Still a large amount but slightly less painful.
What about the grocery store side? If the back-billing limit is 6 months, does that mean they only get 6 months of their $38,000 back instead of the full 7 months?
Tony raises an important question. The back-billing limitation typically applies to underbillings, not overbillings. When the customer has been overcharged due to utility error, most jurisdictions require the full refund regardless of how long the error ran. The limitation protects customers from surprise bills, not utilities from refund obligations. Christine should be able to recover the full $38,000 for the grocery store.
Randy that is a critical distinction. So the grocery store gets the full $38,000 back but the salon only owes 6 months worth. The $3,000 gap is absorbed by Xcel as a consequence of their installation error. Frankly that seems fair.
Final update: Xcel confirmed the meter swap, corrected the wiring, and processed rebilling for both accounts. Grocery store received a $38,200 credit on their next bill. Salon was billed $30,100 (6 months per the PUC limitation) with a 12-month payment plan. Landlord is off the hook. Both tenants staying. My fee on the grocery store recovery alone was $19,100. Best single-case fee I have earned to date.
$19,100 fee on a meter swap case. That is an excellent outcome Christine. And you preserved the landlord-tenant relationships which has long-term value beyond the immediate recovery. Well done.