Internal audit of customer utility accounts finds overcharge, now what?

According to a social media post by the City of Falls City/Utilities, an error was discovered in calculating the “power cost adjustment” (PCA) billing during a recent internal audit of customer utility accounts resulting in an overcharge. The audit was part of multiple layer control steps the city has in place to perform routine monthly oversight audits. “The monthly control procedures failed and new steps have been implemented by management for oversight and control to ensure the error doesn’t happen again,” stated City Clerk Anthony Nussbaum.

The post stated, “The PCA is an adjustment made to your electric bill each month to reflect fluctuations in the true cost of power purchased and/or the cost of power generation by the City of Falls City. We have investigated the error and determined the incorrect base cost for power production was utilized in calculating the PCA beginning when the new utility rates became effective on October 1, 2022, as set forth in Ordinance 2022-106. The PCA calculation is performed manually each billing cycle and then entered into the city’s utility billing software. Unfortunately, the manual calculation was incorrect, and the current checks/balances process did not catch the error resulting in an overcharge to our customers for electrical power consumed. To correct the mistake, utility customers will receive a credit on the next billing cycle in February for utility bills due by March 15, 2023. The amount of credit will vary depending upon the total kilowatt hours (kWh) consumed by the customer between October 1, 2022, to January 15, 2023. The credit will be applied directly to customer accounts in February and will carry forward until the credit is used. Please note that the credit cannot be utilized for the January billing cycle due by February 15, 2023, due to the timing of the credit posting. A revision to our Standard Operating Procedures, adding additional layers of checks and balances, will be implemented to ensure this error does not occur in the future. The City of Falls City considers transparency with our citizens of utmost importance, and we apologize for any confusion and inconvenience this issue caused.”

According to Nussbaum, the error was specific to the PCA billing for electric power. Electric rates, usage and all other utility rates, including water, gas and sewer, were not affected; however, the sales tax will be adjusted proportionally with the PCA credit.

“Due to the error occurring at the effectiveness of the October 1, 2022 rate increase, the city is also crediting back any penalties and fees that may have occurred due to the overbilling of the PCA. The city operates one month behind on utility billing, so the error affected three billing months,” stated Nussbaum.

The city issued the social media notice regarding the billing error, but the timeline for getting credits issued back to accounts couldn’t be determined, “as our software backup files required server mining and coding into the utility software in order to generate the credits,” said Nussbaum. The city is working with its provider, Salt Creek Software, to generate the data and expects that data to be in the system by February 10.

Nussbaum said the department initially thought the data would be posted back into accounts early last week, but the process was taking more time than anticipated. Once the credits are finalized, the city will issue an additional news release.

Customers who are worried about being unable to pay their bills should follow the routine procedures regarding extension requests by contacting city hall. The city is modifying its extension request procedures by allowing any previous extension requests made after October 1, 2022, not to affect the ability of the customer to get another extension until the credit can be applied to their account. There will be circumstances that could yield a shutoff requirement, however, stated Nussbaum, “the bill extension modification will provide relief from shutoff procedures if followed by the customer. Disconnect notices will continue to be sent out to customers that have not paid their bill in full. The disconnect notice provides information regarding relief from disconnect.”

How will customers know precisely how much they were overcharged? They won’t-yet. Nussbaum said there would be a credit for the PCA line during the next billing month, showing a negative adjustment.

“The sales tax adjustment will be accommodated by the negative adjustment for the PCA and any credit card processing fees that a customer may have paid. There is no set percentage for every account as the credit is based upon the kilowatt/hr (KwH) of consumption on a per-customer basis. The credit will be approximately 2.9-3.1 cents for each KwH used related specifically to the PCA billing line item only. Once the credits are finalized and posted to accounts, we will let the public know. Customers will be able to call City Hall to find out that information once it is available prior to mailing out the monthly bill,” stated Nussbaum.

For any questions for clarifications on rates or charges, Nussbaum said the rates are published online at

 Members of the community attended the Thursday, February 2, Board of Public Works meeting to discuss the issue; however, due to open meeting laws and getting on the agenda, they were not able to discuss the issue with the board.

Nussbaum stated the staff at city hall is available to discuss this information with citizens when they have questions.

The City Council will meet tonight on Monday, Feb. 6. Any discussion regarding the utility bills will be printed in next week’s Falls City Journal.

Any pertinent information will be posted as soon as possible at

Due to the open meetings act (the official notices to be compliant with the Nebraska Open Meetings Act are posted at City Hall, F&M Bank and Frontier Bank.), anyone unable to speak at this week’s meeting who would like to place themselves on the agenda for the next meeting will need to contact City Hall.


The Journal asked Nussbaum to clarify some confusion about the $71.55 meter fees on some utility bills.

 The rates are published online at Meter fees are really customer charges for having an active service. If no usage occurs at a property, but services are live, then a meter charge is assessed per the city ordinance,” said Nussbaum. “There are set meter fees (Customer Charge) for electric, water, sewer and gas services as each service is a separate component. Being the city provides all utilities; there are multiple meter charges on each bill. If a customer didn’t have gas service to their house, then they would receive a gas meter charge. Typically all customers have electric, water and sewer at a minimum.”

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