I'm dealing with a situation up here in Bismarck where Otter Tail Power gave my client a 19-day billing period in January followed by a 46-day period in February/March. The January bill was obviously low but the February bill is astronomical - $47,000 vs their normal $28,000. They're on Large General Service rate and I'm trying to figure out if OTP prorated everything correctly. The demand charges alone jumped from $3,200 to $8,900. Has anyone dealt with extreme billing period variations like this?
Otter Tail Power billing period chaos - 19 days then 46 days
Tim, that's pretty extreme even by utility standards. Pacific Power here in Oregon occasionally has 35-40 day periods but 46 days is unusual. The key question is whether they're prorating demand charges correctly. For a 46-day period, demand charges should be multiplied by 46/30 = 1.533. So if normal demand charges are $5,800, you'd expect about $8,892, which matches what you're seeing. The real issue might be whether the 19-day period was calculated right.
Duane's math looks right. I'd be more concerned about whether they applied any seasonal rate changes during that 46-day period. A lot of utilities switch from winter to summer rates in March or April. If OTP had a rate change partway through that long billing period, they should prorate based on the effective dates. That could explain some of the increase beyond just the longer period.
Randy makes a good point about seasonal transitions. I've seen that with Entergy down here in Louisiana. Tim, also check if they had any estimated readings that got corrected. A 19-day period sounds like they might have missed a reading and then had to true up with actual meter data later. That could create artificial spikes when the estimate was too low.
Tim, I deal with similar issues with MLGW's wholesale billing from TVA. The 46-day period calculation looks reasonable but you should verify the energy charges too. Sometimes utilities will apply different block rates incorrectly over extended periods. If they have declining block rates, a 46-day period should get more usage into the lower-priced blocks, not necessarily drive the rate higher.
Thanks everyone. I dug deeper and found the issue - OTP did have a rate increase that took effect February 15th, right in the middle of that 46-day period. They applied the new higher rate to the entire period instead of prorating it. The difference is about $3,400. I'm filing a complaint with the North Dakota PSC because this should be straightforward to fix.
Good detective work Tim. That's exactly the kind of error that happens when billing systems aren't programmed to handle mid-period rate changes properly. Document the exact dates and rate amounts - the PSC will want to see the math clearly laid out. This should be an easy win once you present the evidence.
Tim, excellent work tracking that down. These mid-period rate changes are some of the most commonly missed errors in utility billing. The automated systems just aren't sophisticated enough to handle the date-based proration correctly. Make sure to ask for interest on the overcharge too - most state commissions require it.
Great outcome Tim. Cases like this are why detailed billing analysis is so important. A $3,400 error on one bill could easily have been missed if someone wasn't paying close attention to the rate change timing. Hope the PSC gets it resolved quickly for you.