September 27, 2012 | Volume 42, No. 39

School was overbilled $225K for electric

Alaska Power and Telephone has overbilled the Haines Borough School District $225,057 for electricity.

The error that caused the overbilling dates to the opening of the renovated Haines School in 2007. AP&T discovered the error during one of its periodic audits in July, said Danny Gonce, manager of the utility’s local power operations.

Because the school district uses more electricity than the standard meter can handle, a transformer was placed around the large wires running into the meter, Gonce said.

A ratio is entered into the transformer to make an adjustment and show the actual kilowatt usage, Gonce said. “The meter was accurate, but the ratio entered into it was not,” Gonce said.

Haines Borough Facilities Director Brian Lemcke this week said the error is likely responsible for high electric bills reported at the renovated school in 2009.

“Hell yeah, how could it not?” Lemcke said this week. “People were (phoning) me (in the Lower 48) asking about it. There were comments made about the contractor, the designer and everything else. I think the contractor, designer, and the project manager are somewhat vindicated by this.”

In 2009, staff of the borough’s Energy and Sustainability Commission reported the renovated school was using as much as 25 percent more electricity monthly than the district’s three, former school buildings had been using, combined.

Stephanie Scott, who then was working as staff for the commission, called the consumption “stunning” and an architect who designed the renovated building theorized that computer use might be the cause.

This week, Haines Borough School District Superintendent Michael Byer said he learned of the mistake when Gonce hand-delivered him a letter from AP&T dated Aug. 30.

“We were notified of the amount of the discrepancy in a follow-up letter,” he said. “AP&T proposes to give us credit until the overcharge is used up. We are talking with our auditors on how to handle this and on our timeline options.”

Byer will discuss options on how the unexpected money could be used with the school board at its next meeting.

“The good news – beyond the amount we’ll be getting back – is that we are more energy efficient than we thought,” he said.

Based on school records, the district has paid between $162,216 and $191,338 per year for electricity since 2007.

Overcharges sometimes happen in the industry, AP&T’s Gonce said.

Gonce said he’s unsure of whether interest will be applied to the money owed to the school district. If interest is paid, it would be from the time the error was discovered, rather than from the time it happened, he said.

What happens if someone is undercharged due to a metering error?

“AP&T’s tariff only allows us to recoup up to six months’ billing,” Gonce said.

The overcharge is reminiscent of one that was discovered at Howsers Supermarket in 1987. In that incident, the supermarket had been overbilled an estimated $444,371 by Haines Light and Power, due to a faulty electric meter, according to a 1987 story in the Chilkat Valley News.

HL&P agreed to repay the $444,371 to Howsers.