Just had to share this victory with the group. We just settled a case with CPS Energy here in San Antonio for $340K covering 6 full years of overcharges. The key was proving they systematically misapplied the Primary Voltage Credit under Schedule PL for a large manufacturing client. CPS initially claimed their tariff limited adjustments to 2 years, but we argued this was a continuing contract violation under Texas law. The Texas Railroad Commission backed us up, ruling that systematic billing errors constitute ongoing breaches subject to the 4-6 year contract statute of limitations.
Major win on 6-year recovery in Texas!
Congratulations Jorge! This is exactly the kind of precedent we need more of. Too many utilities try to hide behind short limitation clauses when they've been systematically overcharging customers for years. The 'continuing violation' theory is solid law in most states, but utilities hope we won't push it. Great work documenting the systematic nature of the error - that's usually the key to breaking through their tariff limitations.
Jorge, this gives me hope for a case I'm working on with AEP in West Virginia. They've been misapplying a power factor penalty for 4 years - about $85K in overcharges. AEP keeps saying they'll only go back 2 years, but your Texas precedent might help. Did CPS Energy try to argue the client should have noticed the error earlier? That's AEP's main defense right now.
Wanda, yes they absolutely tried that defense. CPS claimed the client had 'constructive notice' from their bills and should have caught it sooner. We countered that the Primary Voltage Credit calculation is buried in complex tariff language that requires specialized knowledge to verify. Plus, we showed that CPS's own customer service reps gave incorrect information when asked about the credit calculation. The Railroad Commission found that billing complexity can extend limitation periods when customers reasonably rely on utility expertise.
Outstanding result Jorge. Down here in Florida, JEA and FPL both use the 'customer should have known' defense constantly. I'm definitely going to cite your case about billing complexity and reasonable reliance. Did you have to hire an expert witness to explain why the tariff language was misleading, or were you able to establish that through utility witness testimony?
Robert, we actually used CPS's own tariff expert against them. During discovery, their witness admitted that the Primary Voltage Credit calculation requires 'detailed knowledge of electrical engineering and rate design principles.' That admission helped establish that ordinary customers can't reasonably be expected to verify these complex calculations. Sometimes the utility's own experts make our best arguments for us!
Jorge, brilliant strategy getting their own expert to admit the complexity. I'm dealing with Duke Energy Ohio on a similar voltage credit issue - they've been undercrediting a client for 5 years, about $125K total. Duke claims their tariff is 'clear and unambiguous' but their own billing department has given three different explanations for how the credit is calculated. Your case gives me great ammunition for showing this stuff is far from obvious to customers.
This thread is gold for those of us handling complex rate cases. I'm dealing with Dominion Energy Virginia on a demand billing issue and they keep claiming the customer 'had notice' from their monthly bills. Jorge's point about tariff complexity and reasonable reliance is exactly what I need. Did the Texas Railroad Commission issue a written order, or was this resolved through settlement before a final ruling?
Alice, it was settled before final order, but the Railroad Commission staff issued a preliminary ruling that was very favorable. The staff found that 'complex technical billing provisions require specialized expertise to verify, and utilities cannot impute knowledge of tariff intricacies to ordinary customers.' Even though it's not a final order, CPS knew they were likely to lose and settled quickly. I can share the staff memo language privately if you want to cite it.
Jorge, would you be willing to present this case at our next regional meeting? This kind of precedent on limitation periods and customer notice standards could help a lot of our members. The strategy of using the utility's own complexity admissions is brilliant and replicable in other states. Let me know if you're interested - I think this deserves wider circulation in our community.
Randy, I'd love to see Jorge present this. I'm just starting out in this field and these kinds of detailed strategy discussions are incredibly valuable. The interplay between state contract law and utility tariff provisions is something law school definitely doesn't prepare you for. Jorge, congratulations again on the great result - $340K recovery over 6 years is exactly why our clients need us.
Absolutely Randy, I'd be happy to present at the regional meeting. This case really shows how important it is to think beyond just tariff language and consider broader legal principles. The 'continuing violation' theory applies in most states, but too many auditors give up when utilities cite their limitation clauses. We need to be more aggressive in challenging these artificial time restrictions, especially for systematic errors.