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The Telegram
  • Audit: National Grid overcharges customers by $44M

  • National Grid overcharged customers in New York state $44 million in 2009, according to an independent audit ordered by the state Public Service Commission.

    The audit was ordered in late 2010 after commission staff questioned the accuracy of expenses the utility billed to customers.

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  • National Grid overcharged customers in New York state $44 million in 2009, according to an independent audit ordered by the state Public Service Commission.
    The audit was ordered in late 2010 after commission staff questioned the accuracy of expenses the utility billed to customers.
    While the majority of the excess charges were in the downstate region, upstate customers were overcharged $8.5 million, the audit found.
    Whether customers will receive refunds due to any overcharges soon will be examined.
    But Steve Brady, speaking for National Grid, said the audit was full of errors due to “unsound methodology.” “We think the total is closer to something like $175,000,” he said. “When we went back and scrubbed the same data, that’s the number that we found. We know that there was some small level of error in our transactions and we have no problem acknowledging that.”
    In performing the audit, Overland Consulting sampled 1,425 of the utility’s transactions valued at $1.77 billion over 20 months, from October 2008 to May 2010, and found a 12 percent error rate. Brady said that rate was closer to 0.02 percent.
    “In any given month there are thousands or tens of thousands of those transactions,” he said. “They exacerbated the problem by then taking their error rate and extrapolating it across the many thousands of transactions, which is how they would come up with their overall number of $44 million.”
    The audit found an additional $11.2 million in charges that should have been excluded from National Grid’s most recent electric rates, and Overland made 10 recommendations for National Grid to improve its accounting and cost allocating procedures.
    In Albany Thursday, the commission voted to order the company to respond within 45 days with a plan of implementation.
    “We will do that,” Brady said.
    The commission also voted to start a procedure to determine whether National Grid owes refunds to its customers. During that process, National Grid will get a chance to examine and question the auditors’ methods.
    “In that process, we will very actively and vigorously present our case as to why you think Overland was wrong,” Brady said.
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