Monday, November 17, 2008

FPL's faulty electric meters focus of dispute

FPL's faulty electric meters focus of dispute

Associated Press Writer
Publication Date: 01/31/05

TALLAHASSEE -- A long battle over how much Florida Power & Light Co. should repay to some big business customers for higher electric bills caused by faulty meters is heading to state regulators in an arcane case about big bucks.

The state's largest electric company is embroiled in a battle with four major companies over a type of meter that the utility has acknowledged malfunctioned while measuring peak electricital use by large business customers.

The state Public Service Commission will consider the dispute Tuesday and decide how much FPL owes retailers Target, J.C. Penney Co., and Dillard's and hotel operator Ocean Properties Ltd. for the defective meters.

FPL has refunded more than 100 commercial customers who overpaid because of the meters but says the effort by the four remaining customers is simply an attempt to financially exploit the equipment flaw.

Lawyers for the customers say the problem is bigger than FPL is admitting and may affect other companies who don't know it.

"There's thousands of these meters out there," said attorney Jon Moyle, Jr., representing the retailers.

The case involves a thermal demand meter, which uses heat to measure electrical use during peak hours.

The wrangling started a few years ago when a consulting company, Southeastern Utility Services, working to audit electric billing, alleged that some of the meters were reading inaccurately.

FPL agreed in 2002 to test about 4,000 of the 1V meters and found that more than 10 percent, about 600, were off, said company spokesman Bill Swank. Of those 600, 400 of them under-measured demand.

FPL, owned by Juno Beach-based FPL Group, offered refunds to the remaining 200 customers and replaced their meters.

But customers represented by Southeastern Utilities went to the PSC with 13 meters and argued they had misread peak demand going back longer than the one year for which FPL was offering refunds.

"What (FPL) failed to tell (customers) was that people had the ability to go back beyond 12 months," Moyle said.

Swank said FPL's refunds were fair, citing a requirement that companies refund money for a year unless a customer proves the overbilling went on longer.

"They're trying to get a lot more money back for the customers than what the PSC rules say we should be giving back," Swank said. "We tried to follow the rules ... and make sure we were fairly and uniformly treating all our customers. And we believe we did that."

FPL hasn't disclosed how much the total refund amount could be if the customers get all they want, in part because it would hard to do until the commission decides how the refunds should be calculated.

Among the issues commissioners could decide will be not only how long refunds should go back, but how they should be calculated. The two sides also disagree on how to measure the amount of overbilling and whether FPL's tests to determine the amount of inaccuracy in the meters were accurate themselves.

Meanwhile, FPL is phasing out the thermal demand meters and expects them to be replaced by electronic ones by the end of the year.

A class-action lawsuit against FPL on the same issue is pending before a Florida appeals court.

FPL Group reported net income of $887 million, or $4.91 per share, last year, down from $890 million, or $5 per share, in 2003.

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© The St. Augustine Record

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