Just wrapped up a case that took 18 months but netted our client $847,000 from FirstEnergy. Large manufacturing facility in Cleveland had been getting hammered on Schedule CI-2 industrial rates. The utility had been applying secondary voltage charges when the customer was actually taking primary service at 13.8kV. Found the error buried in their engineering records from a 2009 upgrade that was never properly documented. Sometimes persistence pays off big time. Anyone else dealt with FirstEnergy's engineering department on voltage classification disputes?
My biggest single recovery - $847K from FirstEnergy
Holy cow Frank! That's a monster recovery. We've had issues with Duquesne Light on similar voltage misclassification but nothing close to that scale. How did you finally get FirstEnergy to acknowledge the error? Their engineering group can be pretty stubborn from my experience.
Frank - incredible work! We see this voltage classification issue pretty regularly here in Ohio. AEP has similar problems with their Schedule GS-3 vs Schedule GS-4 classifications. The key is getting them to admit their own engineering drawings show primary service delivery. Did you have to escalate to the PUCO or did FirstEnergy settle internally?
Walt - it took three formal meetings with their engineering manager and threats of PUCO intervention. Jim - we kept it internal thankfully. The smoking gun was their own substation records showing the 13.8kV feed direct to customer premises. Once I got copies of the original interconnection agreement from 2009, they couldn't dispute it anymore.
Frank, that's the kind of case that makes this job worthwhile. Here in Georgia Power territory, we see similar issues with their Schedule PL vs PLL classifications. The devil is always in the engineering details. Did the client have any idea they were being overcharged or did you discover it during a routine audit?
Outstanding recovery Frank! We just finished a similar case with Duke Energy here in NC - only $340K but same basic issue. Customer was classified as Schedule LGS when they should have been Schedule MGS due to their transformer configuration. These voltage and service classification errors are gold mines if you know where to look.
Derek H - routine audit uncovered it. Customer had no clue. Derek O - exactly right about Duke Energy, they have similar classification issues. The key is always getting copies of the original electrical service drawings and comparing them to current rate classifications. I've probably found voltage misclassification errors at 60% of industrial clients I've audited.
Frank - awesome work! Question for the group - has anyone dealt with LG&E on Schedule IS-2 vs IS-3 disputes? We have a client here in Louisville that I think is misclassified but LG&E is being stubborn about providing the engineering records.
Jack - file a formal records request with the Kentucky PSC. LG&E has to provide engineering drawings if you go through the commission. Frank - congratulations on that recovery! Cases like this are why industrial audits are so critical. Most facilities have no idea what rate schedule details even mean.
Fantastic work Frank! Here in Connecticut we see similar issues with Eversource on their Rate 35 vs Rate 40 classifications. The voltage delivery documentation is always the key evidence. Did FirstEnergy try to limit how far back you could go for refunds?
Vince - they initially wanted to limit it to 24 months but we pushed for the full statute of limitations period. Ended up getting 40 months of refunds plus interest. The key was showing the misclassification was their error from day one, not something that changed over time.