Norm R from Des Moines, IA. MidAmerican Energy territory. Noticed something odd reviewing 3 years of bills for a warehouse client. Most billing periods are 29-31 days which is normal. But every few months, there is a 27-day period followed by a 33-day period. The net effect over 12 months is that the billing cycle drifts forward by about 8 days per year. After 3 years, the drift accumulated to the point where my client received 13 bills in the 2011 calendar year instead of 12. That is 13 customer charges, 13 demand charges, and 13 billing minimums. The 13th bill was a short 22-day period at year end that still carried a full customer charge of $85 and a minimum demand charge.
Billing period drift — client getting 13 bills per year instead of 12
Norm, billing period drift is a systemic issue with most utility billing systems. They schedule meter reads on a route-based cycle and if the route takes longer than expected some months, the dates shift. Ideally the billing system should normalize to 12 periods per year and prorate as needed. An extra billing period with full fixed charges is a legitimate complaint. Check the MidAmerican tariff for language about billing period normalization.
I see this with OPPD accounts too. The billing cycle drifts and eventually you get a 13th bill. For residential customers the impact is small — an extra $15 customer charge. But for commercial accounts with high customer charges and demand minimums, the extra period can cost hundreds. Norm, how much is the 13th bill in total fixed charges?
Ken, the 13th bill had $85 customer charge plus a minimum demand charge of $312 (the ratchet minimum for the 22-day period) plus various riders totaling $48. So $445 in charges that would not exist if the billing system kept to 12 periods per year. And the demand measurement for a 22-day period is likely to show a lower peak than a full 30-day month, but the ratchet keeps the billing demand artificially high.
Norm, this happened to 3 of my clients on IPL in Indianapolis. I filed complaints on all three and IPL agreed to rebill each year with only 12 billing periods, prorating the short period into the adjacent months. The refund per client was $300-600 per year. Small dollars but zero effort once you spot the pattern.
Greg, that is exactly the remedy I want. Did IPL push back or was it a quick correction?
Quick correction. Their billing manager acknowledged it was a known system limitation and said they had been meaning to implement an automatic 12-period normalization. Three years later they still have not done it, so I check every client annually.
Filed with MidAmerican. They were receptive. Agreed to rebill 2011 with 12 normalized periods and refund the 13th period fixed charges plus adjust the demand for the short period. Credit: $445 for 2011. I also checked 2010 and found the same drift resulted in a 13th bill that year too — another $445. Total credit: $890. And going forward I am flagging this for every client during the initial bill review.
Not every audit finding is a five-figure recovery. Sometimes the value is in systematic corrections that save a few hundred per year but require zero ongoing effort. $890 for what probably took 2 hours of work is a good hourly rate. And the client appreciates the thoroughness.
Exactly Randy. And this client has 3 other warehouse locations on MidAmerican. Checking all of them now. If the drift is route-based, accounts on the same meter reading route probably all have the same problem.