Refunds for the over-billing of the Power Cost Adjustment (PCA) have been posted to customers’ accounts.
The error was discovered a few weeks ago 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,” City Clerk Anthony Nussbaum stated at the time.
The refund has been issued as a credit, specifically to the PCA billing line, and is reflected on each customers March utility bill. The amount of credit varies upon the total kilowatt hours (kWh) consumed by the customer between October 1, 2022, to January 15, 2023.
A total credit of $411,753.11 is being issued back to our customers due to the billing error. A total of $170,435.02 has been refunded to residential customers and $221,404.74 has been refunded to commercial customers. In addition, a total of $21,913.35 is included in the refund for sales tax and/or any penalties associated with the PCA billing line item. Any bill payment extensions granted to customers during this timeframe will not affect the ability for the customer to attain future bill payment extensions.
A summary of how customers can view their total credit is as follows:
PSN Customers: The refund is posted and is viewable on your online account. The online accounts will not detail a negative balance. If you have paid ahead and show a zero balance, the credit will be detailed as soon as a balance due is posted.
Level Pay Customers: The billing error did not affect your level pay amount and your monthly level payments remain unaffected. Level pay schedules are derived from the previous 24 months of utility billing. The billing error will be detailed in your billing history to reflect the correct usage/cost for future level pay calculations.
Paper Billing Customers: The refund will be detailed on your next monthly paper bill.
The City of Falls City considers transparency with our citizens of utmost importance, and we apologize for any confusion and inconvenience this issue caused. Additional control measures have been implemented to ensure this error does not occur in the future.
Information previously published in the Falls City Journal on February 8, 2023.
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 varies 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.
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? 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.