Just finished an audit where the client told me their plant runs 24/7/365, so I recommended switching from OG&E's Schedule LMP to their continuous operation rate. Turns out they shut down every weekend and for two weeks in December. The rate switch would have cost them $8K annually. Do I have an obligation to report their misrepresentation to the utility? This feels like attempted fraud using my professional services.
When clients lie about their usage patterns
Ed, I don't think you're obligated to report them to the utility, but you definitely shouldn't submit recommendations based on false information. I always verify operating schedules with actual usage data before making rate recommendations. CPS Energy requires detailed load profiles for most commercial rate changes anyway. Cover your own liability first.
Had a similar situation with Gulf Power last year. Client claimed they were running three shifts but usage patterns clearly showed single shift operation. I refused to sign off on their rate change application and documented why. Turns out they were trying to qualify for a lower demand charge tier they didn't deserve. You did the right thing catching this.
The CUBA ethics guidelines are pretty clear - we can't knowingly assist clients in making false representations to utilities. I'd document the discrepancy, refuse to make the recommendation, and explain why to the client. If they push back or try to find another auditor to rubber-stamp it, that's on them. But you can't be part of it.
This is why I always do my own load analysis before making any rate recommendations. Clients don't always lie intentionally - sometimes they just don't understand their own usage patterns. But with Duquesne Light requiring certified load profiles for most rate changes, I can't afford to get it wrong. Document everything and stick to the data.
I actually had a client thank me for catching their mistake on operating hours. They thought they were running continuously but forgot about scheduled maintenance shutdowns. Would have cost them big with Entergy's continuous service rate. Sometimes clients appreciate the extra diligence even when it costs them potential savings.
Ed, definitely document this whole situation in case there are questions later. Ohio Edison has started auditing rate change applications more carefully after some issues with auditors submitting inaccurate information. Better to have a paper trail showing you caught and corrected the problem. Protects both you and your client long-term.
This happens more than people think. Had a client in Bakersfield tell me their facility was "manufacturing" when they were actually just warehousing. Completely different rate classification with SCE. Always verify the basic facts independently. Load profiles don't lie, but people sometimes do.
Seattle City Light has actually started requiring third-party verification of operating schedules for certain rate applications. They got burned too many times by inaccurate information. The utility audits are getting more sophisticated too, so any discrepancies will eventually surface. Better to get it right the first time.
I always tell clients upfront that my recommendations are only as good as the information they provide. MLGW has denied several rate applications recently because of inaccurate operating data. The utilities are getting smarter about verifying this stuff. Honesty really is the best policy here.
Georgia Power actually has a formal process now for reporting suspected rate fraud. Not saying you need to go that far, but it shows how seriously utilities are taking this issue. I'd focus on educating your client about the importance of accurate information and document your efforts to verify the facts.
Thanks for all the input everyone. I ended up having a frank conversation with the client about the importance of accurate data. Turns out they genuinely didn't realize the weekend shutdowns disqualified them from the continuous rate. We found a different rate option that still saves them $3K annually. Sometimes the ethical path leads to better outcomes for everyone.