APS discovered a CT ratio error on a large commercial account here in Phoenix last month. The error goes back 3 years but Arizona Revised Statutes 40-285 clearly limits backbilling to 2 years. APS is arguing that since the customer "should have known" their bills were too low, they can ignore the 2-year limit. Has anyone seen this argument succeed? The bills were only about 15% low, not obviously wrong.
Arizona backbilling statute A.R.S. 40-285 - APS pushing the limits
Sarah, the "should have known" exception is pretty narrow in most states. In Tennessee, it requires the underbilling to be so obvious that any reasonable customer would notice. A 15% difference probably wouldn't meet that standard, especially on a complex commercial account. What's the Arizona Corporation Commission's guidance on this?
Randy's right about the obviousness standard. Here in Ohio, Duke Energy has to prove the customer had actual knowledge or the error was so glaring it couldn't be missed. A 15% variance on a complex rate schedule wouldn't qualify. I'd push back hard on APS's interpretation.
The ACC decision AAC R14-2-210 from 2019 actually addressed this. They ruled that "should have known" requires either customer acknowledgment of the error or billing differences exceeding 50% of normal usage. APS's 15% variance doesn't come close. I'm citing this in my response to them.
Sarah, that's a great precedent to have. Pennsylvania doesn't have as clear a standard unfortunately. Our utilities sometimes try the same argument but 15% would never fly here either. The whole point of the 2-year limit is to protect customers from utility billing errors, not punish them for trusting their utility.
Following this thread because DTE tried similar logic on a client last year. They claimed a 20% underbilling should have been "obvious" but the Michigan PSC rejected it. The customer isn't expected to audit their utility's work. Good luck with APS, Sarah.
Victory! APS backed down after I cited the ACC precedent. They're limiting the backbill to exactly 24 months as required by A.R.S. 40-285. Saved the client about $8,400. Sometimes you just have to remind utilities what their own rules say. Thanks for the support everyone!