Just discovered a 400:1 vs 800:1 CT ratio error at a steel foundry in Ohio on AEP's Schedule IS rate. They've been getting billed for half their actual demand for 4 years! Demand should be around 2,800kW but showing only 1,400kW. AEP wants to true-up going back 24 months. Anyone know their statute of limitations on corrections?
CT ratio error at steel foundry - massive recovery potential
Holy cow Marilyn! That's going to be a painful true-up for your client. AEP typically goes back 24 months for meter errors but I've seen them push for 36 months on CT issues. The foundry is looking at probably $400K+ in back charges. Hope they've got cash reserves.
Mike's estimate sounds about right. At 1,400kW underbilling on industrial demand charges, you're looking at $12-15K per month minimum. The good news is CT errors are utility responsibility, so you might be able to negotiate the lookback period. Document everything and push back on anything beyond 24 months. AEP has been reasonable on meter error negotiations in my experience.
Update: Negotiated it down to 18 months lookback. Still a $280K hit but better than the original $420K they wanted. Client is setting up payment plan. Lesson learned - always verify CT ratios match the meter setup, especially on older installations.