Fellow auditors - especially those working in the Memphis area. MLGW has acknowledged a systematic billing error in their natural gas division that affected commercial accounts from December 2023 through February 2024. The error was in their tariff rider calculations for Rate Schedule LGS (Large General Service). They were applying the wrong multiplier for commodity charges which resulted in overcharges averaging 12-15% for affected accounts. MLGW is supposed to automatically issue credits but I'd recommend double-checking any large commercial gas accounts during that period.
MLGW gas billing errors - heads up Memphis folks
Thanks for the heads up Randy! Do you know if this affected the hospital and institutional accounts too? I've got several healthcare clients in Memphis that are on LGS rate schedules. A 12-15% overcharge on gas bills during peak winter months could be substantial money. Were the errors limited to certain meter configurations or customer classes?
Wanda, yes it affected all customers on LGS regardless of sector. The error was in their billing system's calculation engine, not meter-specific. I've got a manufacturing client who got a $23,400 credit and a medical facility that received $8,900 back. MLGW's website has a notice posted but it's buried in their news section. If you have clients who haven't received automatic credits by March 15th, I'd call their commercial customer service line directly.
This is exactly why I always run parallel calculations on gas bills during winter months. Heating season billing errors can be huge when they go undetected. Randy, do you know what caused the error initially? Was it a system upgrade gone wrong or just a programming mistake? Understanding root cause helps me know what to look for with other utilities.
Glen, from what I heard through the grapevine, it was related to their December system maintenance. They updated their tariff calculation modules and apparently didn't properly test the LGS rider calculations before going live. The error compounded over three billing cycles before someone noticed the revenue anomalies. Classic case of insufficient QA testing on billing system changes. Other utilities take note!
Similar thing happened with EPB a few years back but on electric not gas. System upgrades are always risky for billing accuracy. Randy, have you heard anything about whether MLGW is implementing additional controls to prevent this in the future? Customers shouldn't have to rely on auditors to catch systematic utility billing errors.
I can speak to this since I work with several MLGW commercial accounts. They've implemented monthly revenue variance reports that should flag these kinds of systematic errors sooner. They're also requiring dual approval on any billing system changes affecting tariff calculations. The process improvements are good but the damage was already done for winter 2023-24. My clients are asking for additional compensation beyond just the billing credits.
Estelle raises a good point about additional compensation. MLGW is offering to waive late fees for any accounts that may have been affected by payment timing due to the higher bills. They're also crediting interest on the overcharge amounts at their tariff rate. It's not perfect but better than some utilities would do. The key lesson is to always validate billing system changes during peak usage periods.
Randy, one more question - do you know if this error affected the budget billing customers differently? I've got a few Memphis clients on levelized payment plans and I'm wondering if the error would show up immediately or get smoothed out over the year. Budget billing can sometimes mask these kinds of systematic errors until the true-up period.
Wanda, good question. Budget billing customers are getting credited for the overcharges but MLGW is also recalculating their levelized payment amounts going forward to account for the corrected usage costs. So they get the money back AND lower monthly payments for the rest of the budget year. Actually works out better for them than standard billing customers in some cases. The budget billing true-up in December should reflect all the corrections.
This has been really informative. I'm going to add systematic billing error detection to my audit protocols, especially after utility system upgrades. Randy, thanks for bringing this to everyone's attention. This kind of information sharing is what makes our profession stronger and helps protect customers from utility mistakes.
Agreed on the information sharing value. I've already contacted my clients in Nashville and Louisville to see if their utilities had any similar system changes recently. Better to be proactive than reactive when it comes to billing errors of this magnitude. Randy, keep us posted if you hear about any other utilities with similar issues - these problems sometimes affect multiple systems from the same vendor.