Just wrapped up an audit for a small manufacturing client in Fresno and found they've been on G-1 residential gas rate for 3 years instead of the commercial G-NR1 they should qualify for. We're talking about a $47,000 overcharge just in the last 24 months. Has anyone else seen PG&E mess up these classifications this badly? The client uses about 125 therms per month consistently and clearly meets the commercial criteria. I'm preparing the refund request but want to make sure I'm not missing anything in the tariff language.
PG&E gas tariff G-1 vs G-NR1 - massive overcharge discovered
Dan, that's huge but not surprising with PG&E. I've seen similar issues here in San Jose. The key thing with G-NR1 is making sure they meet the "primarily commercial" use requirement - sounds like your client definitely does. Did you check if they have any residential components that might complicate the classification? Also make sure to request interest on that refund, PG&E will try to lowball without it.
We see this type of misclassification regularly down here with CenterPoint Energy. The gas utilities seem to default everything to residential unless specifically challenged. Your $47K sounds about right for that usage level - we recovered $62K for a similar client last year. Make sure to go back the full 3 years if your state allows it, not just the 24 months you mentioned.
Thanks Angela and Pete. Good point about going back the full 3 years - California does allow that for tariff misclassifications. The client is 100% commercial use, small machine shop with no residential components. I'm also finding some issues with their transportation charges that might add another $8-10K to the recovery. PG&E's gas tariffs are almost as convoluted as their electric ones.
Dan, definitely pursue those transportation charges too. We had a similar case in Cleveland with Dominion East Ohio where the transport rate was wrong for 18 months. These gas companies bank on nobody understanding their byzantine rate structures. Document everything meticulously - they'll fight you on every penny but the savings are worth it for your client.
Frank's right about the documentation. Here in Minneapolis with CenterPoint, I always request the full tariff application history when I find these misclassifications. Sometimes you'll discover they never properly processed the original service application. That can strengthen your case significantly and sometimes gets you penalty interest on top of the regular refund interest.
Update: Filed the refund request yesterday with full documentation going back 36 months. Total claim is now $58,400 including the transportation issues and accrued interest. PG&E has 60 days to respond. Will keep everyone posted on how this plays out.
Excellent work Dan. That's a significant recovery for your client. Make sure to stay on top of PG&E - they have a habit of "losing" refund requests or claiming they need additional documentation. Don't let them string this out past their 60-day window.