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The City of Penticton says its utility department over-billed seven high-usage customers $911,000 while failing to collect $108,000 from five underpaying customers.
The municipality has released the results of an audit ordered after a major billing error was discovered in 2018.
The audit targeted 575 high-usage customers whose consumption is measured with Instrument Transformer Metering (ITM) and discovered billing errors for 22 locations. The work was carried out by an independent contractor with support from Measurement Canada.
“At the conclusion of the audit, the electric utility had successfully visited 100 per cent of the locations where ITM equipment is used. Today, we are satisfied that the scope of the problem, including both measurement and calculation errors, has been clearly identified and professionally remediated,” chief financial officer Jim Bauer said.
The situation does not impact standard residential and business customers, as those customers do not use ITM equipment.
“It is critical that the city’s electric utility customers understand the narrow scope of the problem that triggered this audit. Only 0.1 per cent of the city’s 19,000 customers were affected,” said Bauer.
A sum of $911,155, the equivalent of 2.2 per cent of annual energy sales, has been refunded to seven high usage customers whose accounts were overbilled, while $108,538 was not collected from five customers who underpaid. Errors on six additional accounts could not be mathematically determined and four remaining accounts were associated with properties owned by the city.
Bauer noted the refunded amounts have not been drawn from the tax base, because it has already been collected, so refunds will be drawn from the electric utility’s $16.8 million reserves.
Moving forward, new ITM installations will be revalidated 30 days after installation and a new process has been rolled out between collection services and operations to capture anomalies.
“All 22 occurrences are the result of incorrect measurements or calculations that went undetected for years, with one account containing billing errors dating back to 1991. With the corrective actions the City has introduced, we are confident that similar billing issues will not go undetected in the future,” said Bauer.
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