Just wrapped up a major recovery for a manufacturing client here in San Antonio. CPS Energy had been charging a "System Benefit Charge" of 0.45 cents per kWh for three years on this large industrial account. Total overcharges came to $15,234. The problem? This customer's rate schedule specifically excluded them from system benefit charges due to their interruptible service agreement. CPS Energy's billing system wasn't properly flagging the exemption. Took six months of back-and-forth but we got full refund plus interest. Always check if your client qualifies for exemptions!
CPS Energy San Antonio - Found $15K in bogus "System Benefit Charges"
Great catch Jorge! We see this a lot with CPS Energy - their billing system has issues with complex rate structures. I found a similar problem last year where they were charging demand ratchet on an account that had negotiated a special contract excluding ratchet provisions. The key is getting someone at CPS who actually understands the tariff language, not just the first-line customer service reps.
This is exactly why I always do a line-by-line tariff comparison on new client audits. Utilities love to implement "standard" charges without checking for exemptions or special contract terms. Portland General Electric did something similar with renewable energy surcharges - they were billing everyone regardless of opt-out provisions. Jorge, did you have to escalate beyond the standard dispute process?
Wendy, yes - had to go through three levels at CPS. Started with customer service, then business customer advocate, finally got to the rate analysis department. The breakthrough came when I provided side-by-side comparison of the customer's signed service agreement versus the billing system charges. Once they saw the documentation, they admitted the billing error and processed the refund. Key lesson: always keep copies of special contracts and service agreements.
Jorge, did they pay interest on the refund? Here in Corpus Christi, AEP Texas usually pays simple interest from the date of overcharge, but you have to specifically request it. Also curious what rate schedule your client was on - we have several large industrials on similar interruptible agreements and I want to make sure they're not getting hit with bogus system charges too.
Vivian, yes they paid 6% simple interest calculated from the first incorrect bill. Client was on Schedule IS-4 (Interruptible Service - Large General). The exemption language is in Section 4.3 of that tariff. Might be worth checking your AEP Texas clients on similar schedules. The system benefit charge exemption seems to be a common oversight in billing systems across Texas utilities.
This thread is gold! We don't have CPS Energy up here in Wisconsin, but Wisconsin Public Service has similar billing system issues. They were charging storm recovery fees on accounts that had opted for self-insurance provisions. Same root cause - billing system not recognizing contract exemptions. Dan K in Green Bay if anyone needs help with WPS issues.
Question for Jorge - how did you initially identify this billing error? Was it obvious from looking at the bill, or did you have to do detailed tariff analysis? I'm trying to develop better screening processes for catching these types of overcharges early in the audit process.
Paula, it jumped out during my standard rate schedule verification. I always compare every line item on the bill against the applicable tariff schedule. The system benefit charge caught my attention because it seemed high for an interruptible customer. Then I pulled the original service agreement and found the exemption language. My advice: never assume the utility is billing correctly, even for "standard" charges.
Jorge, excellent work on that recovery! This is why detailed contract review is so critical. We had a similar case with Appalachian Power where they were charging transmission service fees on a customer who had their own substation and direct transmission connection. $8,400 recovery over 18 months. The devil is always in the contract details.
Great thread everyone. This highlights why we always recommend keeping detailed records of all service agreements and special contracts. Jorge's systematic approach to tariff verification is exactly what sets professional auditors apart from customers trying to review their own bills. For newer auditors reading this - invest the time upfront to understand every clause in your client's service agreements. That's where the big recoveries are hiding.