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Why On-Site Inspection?
Modern utility metering systems are engineered to be very accurate. However, any time people and systems are involved mistakes will be made and equipment can malfunction. Such mistakes can easily be compounded by the programmable systems used in metering and billing utility services today. As described below, such mistakes can cost you $10,000s or $100,000s. Many of these overcharges can only be found by combining a thorough review of the billing and usage history for the utility service with on-site inspection of the metering system. It is important to note that with current systems, it is not just the meter that can cause a major error in the measurement of your service. Moreover, a meter test that indicates a meter is within the required accuracy parameters does not mean that your service is being measured and billed accurately. A meter test may not catch intermittent errors, nor will it identify errors with the auxiliary equipment that works in conjunction with the meter; such as digital compensation equipment, digital totalizers, pressure regulators, instrument transformers, or remote meter reading systems. Here's a sampling of metering issues we have identified recently from our on-site inspections for our clients. |
The ERS On-Site Difference
Why do we invest the time and travel expense to visit our clients' facilities when other audit firms do not? A recent analysis of our audit results for the past five years found that over 29% of the total dollar benefit to our clients was directly from the issues found and information gathered in our site visits. |
Erratic Demand and the Limitations of Meter Tests
From our review of years of billing data, we found that this client was being charged for erratic demand spikes to as high as 1507 kW during summer months. The normal demand range on this service was 250 kW to 350 kW. This service did have loads over 1 MW in past years, but the plant had been re-configured about three years prior to our audit and much of that load was moved to a separate service. The utility had noticed the erratic demand but attributed those spikes to a welder the client had installed. We checked the specifications and installation on the welder and determined that it would not create demand of more that 65 kW. We inspected the meter and noted a significant amount of condensation inside the glass enclosure. At our request, the utility tested the meter. Their report was that the meter tested well within the acceptable range (plus or minus 2%) with no indication of any problems. The erratic demand spikes continued to occur in the summer months and were billed to the client by the utility. We were convinced that there had to be a metering issue on this service, as the total connected load calculated from our on-site survey was less than 1 MW. So, we pushed the utility and they installed a second meter in-line with the first meter to be able to compare the readings. Demand spikes continued to occur on the original meter, but those spikes did not register on the second (new) meter that was measuring the same service. The original meter was removed by the utility. The billing going forward was based on the new meter, and the demand spikes stopped. Our conclusion was that the moisture trapped in the glass enclosure on the original meter may have been, under certain high-temperature conditions, causing the meter to register non-existent demand spikes.
The refund to the client was $52,179. 
Conjunctive Electricity Metering - Digital Totalizer Programming Error
Because of their high load requirements and multiple electrical feeds from the utility, this client had eight transformers serving their plant. The service through each transformer was metered separately by the utility and the usage was totalized across all eight services by a digital totalizer. Our on-site inspection found a miss-match between meter numbers and billing constants as labeled versus the constants used in calculating the billing. Based on the installed current transformers, one meter which should have had a constant of 200X was being billed with a constant of 400X, while another meter which should have had a constant of 400X was being billed with a constant of 200X. We researched the billing history and metering records and found what appeared to be a transposition of the metering constants in the programming of the digital totalizer 10 months prior to our audit. We contacted the utility on this issue. At first the utility said that everything was in correct. We asked them to check again and again gave them the details of what we had found on-site. They dispatched a technician to check the on-site programming and then came back to us and said "good catch". The refund to the client was $116,321. 
Natural Gas Meter - Remote-Read Programming Error
Our on-site inspection of the gas meter for this masonry products distributor noted a discrepancy between the actual dial reading displayed on the meter and the meter readings as listed on the bills and in the usage history from the utility. We inquired with the utility for an explanation of the discrepancy. They inspected the installation on-site, re-checked their records, and concluded that the mechanism for converting the mechanical readings from the meter to radio transmissions for remote reading was installed incorrectly and the effect was a doubling of the actual usage in the billing system. The refund to the client was $6,789. You may have read about this metering issue in the media. After our discovery and additional investigation on their part, the utility determined that this type of error effected over 2000 customers. 
Electricity - Accurate Meter (But on the Wrong Service)
This manufacturing client had expanded their operations and taken over office space in an office park a few blocks from their main plant. The office building in which they leased this space had previously been reconfigured and had multiple tenants. From our on-site inspection we calculated the approximate electrical loads in this client's space and compared those to the billings from the utility. The demand and usage as billed by the electric utility were significantly higher than what we estimated for the space occupied by our client. We found there were two other tenants in the same building with more space and greater loads. We asked the utility to check the meter assignments for the tenants in this building. They found that our client was being billed for the meter that served another tenants space which was much larger. The utility corrected the billing and issued a refund to our client back to their initial date of occupancy in the building. The refund to our client was $11,439. 
Water - That Decimal Point
This client had a number of facilities with substantial water use as part of their business process at those locations. So, the water bills for their main office building did not seem particularly high to their AP staff But when we looked at the historical usage and the type of facility, it appeared that there was an equipment or metering problem. This municipal water utility installed water meters with one, two, or three fixed "0s", depending on the expected volume of water use for the facility. In our on-site inspection, we found that the meter for our client's building had only one fixed "0"; but the utility had it in their billing system as have two fixed "0s". In effect this was moving the decimal point in their billing calculations one place too far to the right, resulting in a billing of ten times (10X) the actual water used. The sewer charges were calculated from the water meter and so were also over-billed by a factor of ten. The utility corrected this mistake as soon as we brought it to their attention and issued a refund to our client back to the inception of the error. The refund to the client was $7,940. 
Gas Meter Confusion - Firm vs Interruptible
An area hospital added a wing to their main facility. With this expansion they relocated their two natural gas services. This included a firm service for their kitchen and domestic hot water and an interruptible service for their main boiler. With the relocation of these services, new metering was installed by the utility. In the course of this installation, the meter numbers for the firm service and for the interruptible service were transposed in the natural gas utility's billing system. Therefore the gas usage for the main boiler was billed at the higher firm rate and the usage for the kitchen was billed a lower interruptible rate. During our site visit we checked the gas meter numbers, traced the gas supply plumbing, and identified the error. As the gas use for the main boiler was significantly greater than that for the kitchen, the transposition of the meter numbers created additional costs for the hospital. This error had been ongoing for 26 months at the time of our audit. The refund to the client was $24,915. |
Natural Gas - Pressure Factor Correction Error
This client had built a new office building about two years prior to our audit. They were concerned by their high natural gas bills with the new facility. The new office had high efficiency HVAC systems and the client had expected reduced utility bills. but their natural gas usage had actually increased. They inquired with the gas utility company, who checked the meter and said it was functioning properly. Upon our inspection we noted that this was an unusual Dresser meter in that it incorporated a fixed pressure correction factor for 10 PSI (1.67X). The actual delivery pressure for this service was 2 PSI and the utility had been applying a pressure correction factor in the billing calculation for 2 PSI. This meant the volume measured by the meter was first multiplied by 1.67 within the meter (as it was programmed for a delivery pressure of 10 PSI) and then multiplied by 1.13X within the utility billing system for the actual delivery pressure of 2 PSI. The impact of the fixed correction factor was an over-billing of the actual gas volumes by 67%. Once the mistake was brought to their attention the utility promptly corrected the error and issued a refund of the overcharges. The refund to the client was $21,635. 
Water Service - Unit of Measure & Sub-Metering Errors
This meter installation for a regional hospital, as billed, had two significant errors. The main supply meters (on the bottom in the photo at left) were calibrated in cubic feet. The top meter was calibrated in gallons. All were billed as though calibrated in gallons. This created on over-calculation of volume on the top meter of 7X. But on further examination, we realized there was even greater overcharge issue on this installation. The top meter, which had been billed as a separate meter, independent of the two bottom supply meters, was actually a sub-meter to the bottom meters. The top meter had been installed to measure the water used by the landscape watering system, so that this water use could be deducted in calculating sewer charges. Instead of being billed as a separate service, this meter should have been used only to calculate a sewer charge exemption for the water used for landscape watering. The refund to the customer was $35,808. 
Electricity - Primary Service Billed At Secondary Rates
Without checking both the billing history and the metering installation, this service appeared to be billing in good order. In fact, another utility audit firm had audited this service not long before we did and found no issues on this service. Once on site, having reviewed the billing, one issue was obvious to our engineer - this service was billed at secondary rates but was metered at primary voltage. This was a long-running error that went back over nine years. It had been missed by both the other audit firm and the utility company staff for almost a decade. The refund to the client was $466,439. 
Electricity - Primary Service Billing at Secondary Rates
For a regional hospital - the electric utility relocated and replaced a electrical meter on one of the main services for the hospital. From our review of historical data we determined that prior to the meter change, this service had been metered at primary voltage and and billed at primary rates. After the meter change, the utility began billing this service at secondary rates. We inspected this service and confirmed the metering point and voltage.as primary Once we brought this error to their attention, the utility corrected the billing and issued a refund back to the inception of the error. The refund to the client was. $14,554. 
Electricity - Billing Constant Error
Our client, a casino and hotel complex, significantly expanded both their gaming and lodging facilities. An electrical meter was installed temporarily on the new electrical service that supplied these facilities. Once the construction was completed a new metering cabinet and meter were installed as the permanent service for the casino and hotel. The final meter installation used new current transformers which had a lower ratio than the CTs used during the construction phase. However, the utility did not update the CT ratio in their billing system when the permanent meter was installed. The result was that the completed casino and hotel were billed for 25% more electricity than they actually used. We checked the meter constant when we were on-site and found the error. The utility corrected their billing and issued a full refund. The refund to the client was $31,702. 
Electricity - Sub-Meter Billed as Main Meter
This regional healthcare provider moved one of their clinics into a space that had previously been divided between two tenants. The electric utility metered the services for those two tenants inside the building at the distribution panels. When our client took over the entire space a single new metering point was established outside the building. This new meter measured the entire service to the building. However, one of the two meters installed at the distribution panels inside the building remained active. in the utility's billing system. As a result this portion of the service to the building was metered and billed twice, on both the outside meter and on the inside meter at the distribution panel. This continued for over eight years. Our analysis of the historical usage information for this facility indicated a higher than expected usage. During our on-site inspection we traced the feeds and metering points and identified this double-metering issue. We contacted the utility and they acknowledged the error and promptly issued a full refund back to the inception. The refund to the client was $17,623. 
Steam Condensate Meter - Misdirected Plumbing
This hospital client had steam service from a municipal steam utility, both for their main heat source for the hospital and also to use for their sterilization system. The steam service for the sterilization system was measured by a condensate meter. This meter measured the volume of water from the condensed steam as it was returned to the steam utility. A plumber who was working on a remodeling project in the hospital inadvertently connected a utility room plumbing drain line into the steam condensate drain line that went to the condensate meter. As a result, the water use in that utility room was measured as steam condensate and included in the calculation of the steam charges for the hospital. Our review of the historical steam usage for the sterilization system indicated a much higher usage than we would have expected. During our on-site visit, we examined the condensate meter and traced the drain line from the sterilization system. We found the misdirected drain line from the utility room connected into the drain line to the condensate meter. We notified the hospital staff, who had the utility room drain re-plumbed. We negotiated with the municipal steam utility, using the specifications for the sterilization system and the actual volumes for a two month period after the utility room drain line was moved. The refund to the client was $12,136. |