City-owned utility out $350K after under billing

January 10, 2012 12:10:00 PM



GREENWOOD -- Greenwood Utilities has taken a $350,000 hit after under-billing a local furniture factory for 15 years before the mistake was caught. 


The Greenwood Commonwealth reports that it received the details of under-billing after filing a public records request. 


The newspaper said the city-owned facility last March notified the John-Richard furniture factory that its account had been set up incorrectly in July 1996. 


Greenwood Utilities said the factory owed $475,077 in under-billed usage. The utility and John-Richard eventually settled for $121,495, which covered the under-billed usage over the previous three years. 


Greenwood Utilities said the error was caused by an incorrect multiplier during the meter installation in 1996. 


Industry leaders said meters are not equipped to read the large amounts of power used by industries. To account for that, engineers calculate a multiplier that is applied to the amount the meter reads to determine how much power was used. 


Greenwood Utilities said its resolution with John-Richard was consistent with settlements of similar problems by other utilities. 


"While the circumstances that gave rise to this error are rare, they have occurred with most electric utilities," the utility said in a statement. "In response, Greenwood Utilities has reviewed and updated all policies and set in place an improved system of account checks and audits, which should prevent this type of problem from recurring."  


The utility has also started using an independent contractor to verify commercial accounts on a periodic basis.  


Greenwood Utilities said there are no other current instances of similar problems on other accounts. 


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