Ameren Missouri just implemented their approved rate increase and I'm finding systematic errors in their new Schedule LGS large general service billing. The demand charge calculation methodology changed significantly but their billing system is still using the old formulas. I've identified overcharges on every single account I've reviewed so far. The new power factor adjustment provisions alone are being calculated wrong on most bills. Anyone else working Missouri territory seeing similar issues?
Ameren Missouri rate case - huge opportunities in Schedule LGS
Elmer, that's exactly what I predicted would happen with these complex rate restructures. The utilities get so focused on getting regulatory approval that they don't properly test their billing systems before implementation. I'm seeing similar patterns with FirstEnergy here in Ohio. Their new Schedule GP demand billing has been wrong since day one of implementation.
Same story with Xcel Energy in Colorado. When they rolled out their restructured commercial rates last year, the billing errors were everywhere. I found a manufacturing client being charged $23K monthly in incorrect demand penalties because the new Schedule SG multipliers weren't programmed right. These rate case implementations are like Christmas morning for auditors.
Up here in Connecticut, CL&P made similar mistakes when they restructured their Schedule G rates. The power factor penalty calculations were completely wrong for six months before they caught it. I recovered over $180K for one client just from the power factor billing errors. The key is getting your audits started immediately when new rates take effect.
Great point Vince. Here in Memphis with MLGW, timing is everything when they change rate structures. I make it a practice to audit every client account within 60 days of any major rate change. The billing department usually takes 3-6 months to work out all the kinks in their new calculations. That's our window of opportunity.
Reggie's strategy is spot-on. When PG&E restructured their industrial rates two years ago, I found billing errors in the first 90 days that totaled over $340K in recoveries across my client base. The utility billing clerks are working with new tariff provisions they don't fully understand yet. It's like shooting fish in a barrel if you know the tariff details.
Down here in Texas, AEP's rate restructure created similar opportunities. Their new Schedule POL-1 industrial rate has complex time-of-use provisions that their billing system couldn't handle correctly. I found a petroleum refining client being overcharged $156K over eight months due to incorrect peak period calculations. The new rate structures are more complex than the old ones, which means more room for billing errors.
Vivian brings up a great point about complexity. These new rate structures have so many variables - seasonal adjustments, time-of-use periods, power factor penalties, demand ratchets with different rules. The more complex the tariff, the more likely the utility will make mistakes in implementation. I'm focusing all my marketing efforts on territories with recent rate restructures.
Here in Pennsylvania, PPL just got approval for their new rate structure and I'm gearing up for the implementation period. Based on what everyone's sharing, it sounds like the first 3-6 months after new rates take effect are prime hunting season. I'm already scheduling audit appointments with my industrial clients for right after the new rates go live.
Sylvia's got the right approach. I always tell new auditors that rate case implementations are career-making opportunities if you're prepared. Study the new tariff provisions before they take effect, understand exactly how the calculations should work, then get in there fast when billing starts. The recoveries in those first few months can be spectacular.
Jim's absolutely right about preparation. I spend weeks studying new rate schedules before implementation, building spreadsheet models of how the calculations should work. When the bills start coming out wrong - and they always do - I can spot the errors immediately. It's like having a crystal ball for finding billing mistakes.