Just completed a comprehensive delivery charge audit for a major ComEd customer in Chicago and the findings are staggering. Over the past three years, ComEd has been systematically overcharging large customers on their distribution delivery service rates. We found $380,000 in overcharges across multiple rate schedules including incorrect demand billing, misapplied power factor penalties, and transmission charges that should have been allocated differently. The most egregious issue was ComEd applying residential distribution rates to commercial accounts - a $0.027/kWh overcharge that went unnoticed for 18 months.
ComEd delivery charge audit findings - massive overcharges
Randy, that's incredible. $380K in overcharges shows systematic problems, not just isolated errors. Here in Washington we see similar issues but nothing at that scale. How did ComEd respond when you presented the findings? Are they willing to provide refunds or are you having to go through the ICC complaint process? Illinois deregulation has been messy since day one but this level of billing errors is inexcusable.
This doesn't surprise me at all. ComEd has been problematic since the Illinois deregulation started. We've found similar billing errors here in Wisconsin with other Exelon affiliates. The key is having solid documentation and knowing exactly which tariff provisions they violated. Randy, did you find issues with their meter data management system or was this purely rate application errors?
Glen, it was primarily rate application errors. Their billing system was correctly reading meter data but applying the wrong rate schedules and calculation methodologies. The residential vs commercial rate issue affected 12 different accounts - apparently a system upgrade in late 2022 corrupted some customer classifications. ComEd initially pushed back but when we showed them their own tariff language, they couldn't argue. They've agreed to issue credits for the confirmed overcharges.
Randy, any chance you could share some specifics about the power factor penalties? We're seeing questionable PF charges here in Oklahoma and I'm wondering if it's a broader industry issue. ComEd's delivery tariff has some complex power factor adjustment clauses that I've never fully understood. Were they applying penalties when the customer was actually above the threshold?
Susan, absolutely. ComEd was applying power factor penalties to customers maintaining 95% PF or higher, which violates their own tariff. The penalty should only apply below 90% PF but their billing system was flagging anyone below 98%. We found $45,000 in erroneous PF penalties across 8 accounts. The tariff language is clear but ComEd's IT department programmed the wrong threshold into their billing system.
This is exactly why we need more aggressive auditing in deregulated markets. The utilities have no incentive to fix billing errors that favor them. Randy, did ComEd offer any explanation for how these errors went undetected for so long? You'd think their internal audit processes would catch systematic overcharging like this.
Lucille, ComEd claimed the errors resulted from system upgrades and staff turnover in their billing department. But honestly, I think they just weren't looking. These weren't subtle calculation errors - they were blatant misapplications of published tariff rates. The fact that it took an external audit to find $380K in overcharges suggests their internal controls are inadequate or they simply don't care about overbilling customers.
Randy, this reminds me of the PPL billing errors we uncovered in Pennsylvania a few years back. The utilities often blame "system upgrades" but the reality is they don't invest enough in proper testing and quality control. How long did it take ComEd to process the refunds once they acknowledged the errors? Some utilities drag their feet hoping customers will give up or forget.
Sylvia, ComEd actually moved pretty quickly once they verified our findings. They issued credits within 6 weeks, which is faster than I expected. I think they wanted to avoid negative publicity and potential regulatory scrutiny. The Illinois Commerce Commission has been cracking down on billing errors lately, especially after the Commonwealth Edison bribery scandal. ComEd is trying to rebuild their reputation and dragging out refunds wouldn't help.
Great outcome Randy. This case study should be required reading for anyone auditing deregulated markets. The combination of rate misapplication, system errors, and inadequate internal controls probably exists at other utilities too. Have you considered presenting these findings at the next AAUBA conference? This kind of real-world audit experience is invaluable for our members.