Had a junior auditor completely miss a rate schedule change on a PSE&G account - been billing wrong tariff for 8 months. Client owes $47,000 in back charges and is furious. The auditor missed the notification letter buried in January bills and never caught the rate code change from GP to GLP. I feel partially responsible since I didn't catch it in my monthly reviews either. How do you handle situations like this? Do you eat the cost or pass it to the client?
Junior auditor made $47K error - how to handle?
Ouch, that hurts. Wisconsin Public Service rate changes can be sneaky too. We've learned to flag any account where the rate code changes between bills, even by one character. Set up alerts in our billing system for any tariff modifications. As for cost - depends on your contract language. Most of our agreements limit liability but we usually negotiate with the client rather than lawyers get involved.
We had similar with an OG&E manufacturing account - $23K mistake when junior missed a demand ratchet provision change. Used it as a training opportunity for the whole team. Now we have a checklist that requires checking tariff effective dates on every audit. The client wasn't happy but understood when we showed them how we were preventing future issues.
Westar Energy just changed their industrial tariffs last month and I'm paranoid about exactly this scenario. We now have two people review any account over $50K annually. The junior does the initial audit, senior reviews, then I spot check the big ones. Takes more time but worth it to avoid these disasters. Gloria, definitely use this as a teaching moment - what specific steps will prevent this going forward?
Rachel, we're implementing exactly that - mandatory senior review for accounts over $40K annual spend. Also creating a monthly tariff change report that gets distributed to all auditors. The junior felt terrible but it's a learning experience. PSE&G was actually pretty reasonable about setting up a payment plan for the client. Could have been much worse.
Xcel Energy here in Colorado just implemented new notification requirements for tariff changes after too many billing errors industry-wide. They now send certified letters for any rate schedule modifications. Might be worth reaching out to PSE&G about improving their notification process - utilities are generally receptive to feedback that prevents billing disputes.
Stuart makes a good point. We actually worked with Wisconsin Public Service to get better change notifications after missing a similar issue. They now email us directly when major commercial accounts have tariff changes. Worth building those utility relationships - helps everyone avoid these problems.
The relationship angle is huge. Our OG&E rep gives us a heads up on pending tariff changes now. Also helps that we caught a $12K error in their favor last year - utilities remember when you're looking out for accuracy both ways. Trust goes a long way in this business.
Great suggestions everyone. Setting up monthly utility meetings to discuss upcoming changes. The junior is actually doing much better now - nothing like a $47K wake-up call to sharpen attention to detail. We've turned it into a case study for new hires. Sometimes the expensive lessons are the ones that stick.
Exactly right Gloria. I keep a "Wall of Shame" folder with our biggest mistakes over the years. Not to embarrass anyone but to remind everyone why we have all these double-check procedures. The $31K Westar error from 2016 still makes people wince. Better to learn from others' mistakes than make your own.
Update on the Xcel notification thing - they're rolling out an online portal where auditors can register to get automatic alerts for client account changes. Might be worth pushing PSE&G for something similar. The technology exists, just need utilities to implement it. Prevention is always cheaper than fixing mistakes after the fact.