Duke Energy in South Carolina is deploying AMI smart meters across their service territory. During the deployment at a shopping center in Greenville, the meter technician discovered the existing CT ratio was 600:5 but the billing system had it recorded as 400:5. The billing multiplier was based on the wrong CT ratio for an unknown period. The meter was reading correctly but the billing system was applying a multiplier of 80 (400/5) instead of the correct 120 (600/5). Every demand and energy reading was being UNDERBILLED by 33%.
CT ratio errors discovered during AMI meter deployment
Wesley ? underbilling errors are a different kind of audit finding. The client has been getting a windfall they didnt know about. When Duke corrects this the bills are going to increase by 50% overnight (going from 80 multiplier to 120 means a 50% increase in billed quantities). Does the client owe the difference for past underbilling?
Angela ? yes, Duke can backbill for the underbilling period. South Carolina allows up to 36 months of backbilling for metering errors. The shopping center could face a backbill of $120,000-150,000 depending on how long the error has been in place. The property owner is not going to be happy about this discovery.
Wesley ? this raises an ethical question for auditors. If you discover during an audit that a client has been underbilled due to a CT ratio error, are you obligated to inform the utility? The audit was commissioned by the client to find overcharges, not undercharges. Reporting the error to the utility hurts your client.
Richard raises an important ethical question. AAUBA standards require auditors to conduct their work with integrity. If you discover an underbilling error, you are not obligated to report it to the utility ? the utility is responsible for the accuracy of their own metering and billing. However, you should inform your CLIENT about the error because: 1) The utility may discover it independently during AMI deployment as Wesley described 2) The client should prepare for potential backbilling exposure 3) Concealing the error from the client is a breach of your fiduciary duty to them. Transparency with the client, not the utility, is the ethical standard.
Randy frames the ethics correctly. Inform the client, not the utility. The client then makes their own decision. In my experience at Duke, about 60% of CT ratio errors discovered during AMI deployment were undercharges and 40% were overcharges. Auditors should be prepared for both directions when they request CT ratio verification. An audit that discovers the client has been underpaying is still a valuable service ? it prevents a surprise backbill.
One more note: the AMI deployment window is a golden opportunity for auditors. Utilities are physically touching every meter and CT installation. If you have clients in territories undergoing AMI deployment, request the meter change-out report which documents the old meter configuration and new meter configuration. Any discrepancy between the old billing multiplier and the new verified multiplier is a potential billing error ? in either direction. AMI deployments are revealing errors that have been hidden for decades.