A Fortune 100 client received an invoice from its landlord in the amount of $3.6 million for seven years of unbilled electricity usage. When the invoice was received, our client turned to us to verify whether the charge was legitimate in light of the electric sub-meters that were in place.
Upon review of the utility billing data, we noted that the total Electric Consumption (kWh) being charged to our client was close to the total amount consumed by the entire building. We also noted that the total amount of Electric Demand (kW) charged to all tenants of the building was higher than the amounts reported on the electricity bills by 7% - 42% per month.
It was also noted that for a portion of the back-billing period, the Electric Demand (kW) charged to our client was based on the sum of the individual sub-meter demands rather than the “totalized” demand of all sub-meters, as was required. By comparing the monthly “totalized” demands with the demands billed to our client, it was clear that the landlord’s demand charges were overstated by about 25% every month.
Because of this, it was clear from the data that the landlord’s invoice was in error and a more detailed look was required. Accordingly, our engineering team performed a site visit to observe the meters and their related circuits.
Upon review, our team discovered that our client was being charged for 6 multi-channel meters. The first channel measured the total load to the panel and the other channels were measuring loads specific to circuits that were already measured by the first channel. In short, the electricity consumption was being double counted. It was further recognized that our client was being charged for channels that measured loads specific to other tenants of the building.
After a year of gathering and analyzing the appropriate documents, performing a site visit, and gathering all the facts, we presented the data to the landlord. Upon review and subsequent discussions, the landlord had no choice but to withdraw the entire amount of the invoice for $3.6 million dollars.