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Tuesday, January 5, 2010

Update on SD Towing Firm Fighting 10-Year Energy Bill

Mark Pyle, owner of A Plus Towing in Sioux Falls, drops off a car he towed to an auto shop Saturday. Pyle says he is willing to pay some of a $7,600 energy bill from MidAmerican. The energy company says A Plus was undercharged for 10 years because of a faulty meter. But Pyle argues that the energy company bears some responsibility, too. The case is headed for the Public Utilities Commission. (Elisha Page / Argus Leader)

A story on this was originally posted in early December (click to read it). Here's a more in-depth story from The Argus Leader:
Last November, Mark Pyle opened the gas bill for his business, A Plus Towing and Repair at 1309 E. Walnut St., and got a good laugh - at first.

The bill from MidAmerican Energy Co. for more than $7,600 must have had an extra zero, at least, he thought.

"We just laughed. We thought it was a misprint," he said. "Then we opened it up and there was a letter in there. It said the meter was off, and we have the right to charge you for 10 years. We said, 'Oh my God, this isn't a joke.' "
MidAmerican's insistence that A Plus Towing is responsible for a decade's worth of unreported natural gas use - and its only concession being a 24-month repayment plan - prompted Pyle to file a complaint with the South Dakota Public Utilities Commission, a rarity that might influence the way the PUC deals with these types of complaints in the future.

The PUC might weigh A Plus Towing's liability for using natural gas for which it never paid against Des Moines-based MidAmerican's responsibility to ensure it is correctly recording its customers' gas usage and billing them appropriately. MidAmerican claims it is following PUC rules with their request.

"To me, this is likely a two-step process," PUC Chairman Dusty Johnson said. "We need to take care of this specific case. Once that is resolved, we need to take the opportunity to see if the commission's rules and practices are good enough and written right to handle this."

Meter programmed incorrectly in 1997

The problem that led to the dispute between MidAmerican and A Plus Towing began when MidAmerican incorrectly programmed a meter at A Plus Towing in 1997, according to MidAmerican Spokesman Mark Reinders.

It probably would have gone on forever underreporting the amount of natural gas A Plus Towing used if there had not been a fire in the building last September that damaged the meter. When MidAmerican installed a new meter in October, it discovered the mistake.

"The situation is quite unique, that something hadn't been discovered prior to this time," Reinders said.But when MidAmerican found the error, it relied on the PUC's own administrative rules allowing utilities to recover costs from as far back as 10 years, said Reinders, defending MidAmerican's decision to seek repayment.

If A Plus Towing had been overcharged, Reinders said, Pyle would have been justified in seeking reimbursement.

Pyle counters that he never tried to avoid paying a bill."We always paid what they asked us to pay without any argument," he said. "It is not about paying our bill. Somewhere there should be some liability, and it shouldn't all be on the tenant."

Regular tests too costly, MidAmerican says

As part of the resolution of this case, Pyle wants to see a requirement that utility companies regularly test metering equipment.

Reinders said that would saddle companies with unreasonable costs. MidAmerican has 83,600 natural gas customers in South Dakota.

"We don't go out every year to make sure every meter is working correctly," Reinders said.

Short of doing so, however, Johnson questions whether utilities such as MidAmerican ever will truly learn the dimensions of metering problems.

"It makes me wonder how many other meters we've got out there that aren't working properly," he said.

Reinders said he is unaware of any similar pending complaints against MidAmerican in the Sioux Falls area.

Reinders said he does not know whether MidAmerican is interested in making an offer to Pyle to settle the bill and avoid going before the PUC.

MidAmerican has until the middle of this month to respond, and Johnson predicted MidAmerican has a high hurdle to clear to get all it claims it is owed.

"MidAmerican is really going to have its work cut out for it to convince the commission what they are trying to do makes sense," Johnson said.

Most complaints resolved informally

He said he is mystified the case reached the stage of a formal complaint. Typically, the PUC fields about 2,000 contacts annually from consumers with disputes about utility bills. Most are resolved informally and fewer than 10 usually end up as full-blown complaints.

However, Johnson acknowledges "this is one of the most interesting cases we've had filed in the five years I have been on the commission."

From his perspective, Pyle is sticking to a point of principle. He wants to establish that utility companies share liability when gas and power usage is not properly reported, and those companies can't as a matter of course bill customers for the full amount of unrecorded use.

"I'd rather ride it out to the end, so this is eye-opening for them so they can't do this. It's just not right," he said.

But he'd listen to an offer, he acknowledged. However, "it would have to be a pretty reasonable deal, more in my favor than their favor."

Reach Peter Harriman at 575-3615

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