Albert M from Huntsville, AL. Huntsville Utilities territory. City government client — a large municipal services building. Huntsville Utilities tariff exempts government accounts from power factor penalties because the city owns the utility and charging itself penalties is circular. But this building has been paying a power factor adjustment of $340/month for the last 3 years. The account is clearly coded as a municipal government account — the name on the bill is City of Huntsville Department of Public Works. Someone in billing just applied the PF penalty to all commercial accounts above a certain demand threshold without checking the exemption.
Government building exempt from PF penalty but being charged anyway
Albert, municipal utility billing errors on government-owned accounts are more common than you would think. The billing system applies rules uniformly and the exemption requires a manual override that gets missed, especially on accounts that were set up before the exemption was codified. $340/month for 3 years is about $12,240. Since it is a muni utility billing their own government, the correction should be straightforward.
Randy, called Huntsville Utilities and spoke to the billing supervisor. She looked at the account and said — and I quote — oh my, that should not be there. She could see the government exemption code in the account profile but the PF penalty override was never activated. She is processing the correction and backdating the refund to when the penalty started.
Albert, I am in Huntsville too working with some Maxwell AFB-adjacent accounts. Federal government accounts should have the same exemption. Do you know if the Huntsville Utilities exemption covers federal facilities or just municipal?
Isaac, the exemption language says governmental accounts which should include federal. But the interpretation might vary. I would ask the billing supervisor directly — she was very helpful when I called. Reference the tariff section 4.8.2.
Full credit received: $12,580. Slightly more than my estimate because the penalty rate increased last year and I was using the current rate for the full lookback. The billing supervisor also ran a report and found 4 other city accounts with the same missing override. She corrected all of them proactively. Total corrections across all city accounts: approximately $38,000.
Your one phone call triggered $38,000 in corrections across multiple city accounts. That is the kind of impact that gets you a long-term contract with the municipality. Nice work Albert.
Already happened Randy. The city CFO called me last week and asked if I would audit all 47 city-owned facility accounts. Annual contract. Best client acquisition of my career and it started with a $340/month power factor penalty.