Biggest single recovery I've ever had - $156,338 from AEP Indiana for a demand window calculation error that went on for almost 3 years. The client is a steel fabrication shop that operates primarily second shift, with peak demand typically occurring between 3-11 PM. AEP was calculating demand using a 30-minute window, but their tariff Schedule IS clearly specifies a 15-minute window for industrial customers. The difference was costing about $1,400/month in inflated demand charges. Took 18 months and a formal complaint to the IURC, but we finally got them to admit the error and pay up with interest. Their billing system had been misconfigured since 2011!
AEP demand window error cost them $156K
Holy cow Greg, that's huge! Ameren here in Missouri uses 15-minute intervals for all customers over 100kW, but their billing explanations are so cryptic you'd never know if they were calculating wrong. Did you figure this out from the bill analysis or did the client tip you off that something seemed high?
Incredible catch Greg! We've seen similar issues with Puget Sound Energy up here where their automated systems default to 30-minute windows even when the tariff specifies 15-minute. The scary part is how long these errors can go undetected. What made you dig into the demand calculation methodology?
Pam - the client called because their demand charges seemed inconsistent with their actual operations. They'd have months with identical production schedules but wildly different demand bills. David - I started by requesting 15-minute interval data and noticed the billed demand never matched the actual 15-minute peaks. That's when I dug into the tariff language and realized AEP was using the wrong calculation method.
Greg, this is a perfect example of why we always request the actual interval data, not just the summarized bills. Oncor here in Texas has been pretty accurate on demand calculations, but I've caught errors on time-of-use allocation that were similar in magnitude. Did AEP have to audit other customers once they found the billing system error?
Outstanding work Greg! Duke Energy here in Charlotte switched to 15-minute demand windows a few years ago but had similar transition issues. The billing systems take forever to update and nobody double-checks the programming. What was AEP's response when you first pointed out the error?
Marcus - they claimed they were "reviewing the issue" but wouldn't commit to auditing other accounts. Karen - AEP's initial response was denial, claiming their billing system was working correctly. They actually sent me a technical document that proved my point - it showed they were using 30-minute averages when the tariff required 15-minute peak demand measurements.
Greg, the fact that they sent you documentation proving your case shows how little these utility billing departments understand their own systems. ComEd here in Chicago went through similar issues when they upgraded their AMI system. Did you end up charging hourly or contingency for 18 months of work?
Fantastic recovery Greg! PSE&G in Newark has 15-minute demand windows but their bill format makes it nearly impossible to verify the calculations without requesting raw interval data. The $156K recovery probably paid for a lot of future bill audits for that client. How did you handle the interest calculation on 3 years of overcharges?
Yuri - I went with 25% contingency after the first 90 days when it became clear this was going to be a long fight. Tony - Indiana regulations required them to pay interest at the prime rate plus 2%, which worked out to about $8,400 additional. The client was amazed that utility billing errors can compound for years without anyone noticing.
Greg, this case is going into my training materials! NV Energy here in Vegas has been pretty good about demand calculations, but your case shows why we need to verify every aspect of the billing methodology. Did the IURC issue any kind of ruling that would prevent this from happening to other customers?
Outstanding case study Greg! NES here in Nashville uses 15-minute windows but I've never actually verified their calculations against raw interval data. Your case is a reminder that we can't just trust that utility billing systems are programmed correctly, especially after system upgrades or mergers.
Greg, did AEP provide any explanation for how the billing system got misconfigured in the first place? Rocky Mountain Power here in Salt Lake has had several billing system issues over the years, usually related to tariff updates that don't get properly programmed into the automated systems.
Kim - the IURC settlement didn't include any formal ruling, unfortunately. Connie - AEP claimed it was a "programming oversight" during a 2011 system upgrade, but they never provided details about how many other customers were affected. The whole experience taught me to never assume the utility billing system is calculating anything correctly, no matter how basic it seems.
Greg's case is exactly why I always start every new client engagement by requesting 12 months of interval data and manually verifying the demand calculations. These billing system errors can be worth more than rate optimization or power factor correction combined. Great work on sticking with it for 18 months!