Instead of reading meters, CPS estimated how much energy was used

Jan 05 - San Antonio Express

When Alamo Heights resident Anne Burnson opened her CPS Energy bill this past February, she was stunned by how much the city-owned utility wanted her to pay: $439.

After all, Burnson, who considers herself a pretty frugal energy user, said she had barely used her heater that month.

The private-school teacher found the reason in the small type on the back side of the three bills that preceded February's surprise.

There, the utility noted it had estimated how much gas and electricity she had used for those months, instead of sending a meter reader to her home.

The estimates for those three months of bills -- November 2012 through January 2013 -- violated CPS' own policy, which says the utility can only estimate a meter two months in a row. Also, the utility underestimated how much electricity and gas she had used, which resulted in the sky-high February bill when the utility finally read her meters again.

"I think they should have a moral responsibility as a public utility company to make sure that they're charging people for what they actually use," Burnson said.

She wasn't alone.

A San Antonio Express-News investigation into CPS Energy's billing practices found the utility estimated meters instead of reading them more than 400,000 times during 2012. Those estimates accounted for almost 5 percent of the utility's meter reads that year.

The newspaper analyzed more than 24 million meter read records for electricity service from 2010 through 2012 to examine the number of estimates. Estimations were much more frequent in late 2012 than they were in 2011 or 2010, the Express-News analysis found.

The number soared after the utility dismissed a contractor that provided meter readers in November 2012 for poor performance.

Georgia-based Contract Callers Inc. had provided more than one-quarter of CPS' meter reads. Instead of growing its own meter-reading workforce, the utility dramatically expanded its number of estimations to cover the manpower shortage.

CPS, however, rehired the company three months later to again provide it with meter readers it needed to stop estimations. The contractor returned to the job in June.

In the months between the contractor's dismissal and the return of its meter readers, the large number of estimations caused some customers' energy bills to wildly fluctuate and played havoc on CPS' billing system, which triggered a storm of customer complaints that overwhelmed the utility's staff and phone system.

CPS CEO Doyle Beneby acknowledged the estimates and subsequent billing fiasco hurt the utility's standing with many of its customers.

"Give us a chance," he said, "to regain their faith."

Currently, the utility says it's estimating 1 to 2 percent of its meter readings.

CPS, the country's largest municipally owned natural gas and electric company, provides service to 741,000 electric and 331,000 natural gas customers in the Greater San Antonio area.

The estimations

CPS Energy has long used meter estimations, relying on past usage to predict current consumption, to gauge how much energy was used each month.

Utility officials said CPS tries to undershoot how much energy it thinks a customer has used when it estimates meters. The utility catches up on the actual amount of energy used the next time it reads the meter. Officials said that system helps to ensure that customers are never charged for more power than they actually used.

In the past, the practice had been limited. CPS estimated less than 1 percent of its meter reads in both 2010 and 2011.

That changed with the dismissal of Contract Callers in November 2012.

"As the number of estimated reads increased, the number of 'unbillable accounts' also increased," the utility wrote in a blog entry posted in August, apologizing for the billing problems. "That means CPS Energy's automated billing system was rejecting accounts because of all the estimations, and sending bills to another area to be manually double checked."

That, CPS wrote, was the start of a domino effect where unbilled accounts piled up faster than its staff could clear them, resulting in some customers receiving multiple bills at once.

"As more customers began calling in, CPS Energy's phone lines and customer service staff became overwhelmed," the utility said in the post.

In December 2012 alone, the utility estimated nearly 23 percent of all of its meters, the newspaper's analysis found.

The utility acknowledged in its blog post that the number of unbilled accounts had grown to more than 40,000 by March 2013, roughly 5 percent of accounts, with more than 1,000 being added each day.

By July, the percentage of meters being estimated had dropped to 11.1 percent, the utility said. Because the data requested by the newspaper in February 2013 only ran through 2012, it was unable to verify the utility's analysis.

According to meter-read records, the early months of the estimation surge hit many of San Antonio's older and more densely populated neighborhoods.

For instance, in December 2012, CPS estimated: 60 percent of the meters in 78212, a central San Antonio ZIP code that includes Tobin Hill and Olmos Park; nearly 48 percent in 78209, which covers Terrell Hills and Alamo Heights; and more than 29 percent of meters in 78202, which covers the heart of the East Side.

Utility officials said San Antonio's older neighborhoods saw more estimates because that's where buildings with old-style meters, which require manual reads, are most common.

Buildings in newer neighborhoods are usually equipped with newer meters, which require much less manpower to track. One type of meter emits a radio signal that allows it to be read from the street. Another kind, known as a smart meter, is networked directly into the utility's system.

The frustration

For some CPS customers, the frustration didn't end when they managed to make it through to CPS' overwhelmed staff.

Neal Schleich, an Air Force veteran, had seen his bills fluctuate dramatically. His January 2013 bill ($483.16) was four times as high as his December 2012 bill ($118.66), and his March bill ($452.32) was twice as much as his February bill ($267.77), he said in a letter he sent to Mayor Julian Castro, a member of the utility's board.

During a five-month span, from November 2012 through March, the utility estimated the amount of energy he used three times. In December 2012, more than 5 percent of the electric meters in his ZIP code were estimated.

So Schleich attempted to contact the utility's customer service department through CPS' website to find out what was going on. He got through, but didn't get the answers he wanted.

"I just thought that I was being left out in the cold entirely and, I mean, when you're contacting customer service -- whether it's online customer service or you're talking to somebody on the phone -- it doesn't make any difference," the Universal City resident said in an interview. "You should feel like you're actually being served by someone who is trying to help you, and I received none of that."

He said his complaints were resolved only after he contacted the office of state Sen. Leticia Van de Putte, D-San Antonio, and one of her staffers got involved.

He wasn't alone.

Lynne Miller, a retired library specialist who lives in Alamo Heights, said problems with her CPS bills, several of which were estimated, dragged on for nine months.

"They keep sending out revised bills, revised bills, revised bills, because of all the errors that were made," she said. "So, it's not that they weren't straightened out eventually, but there was a lot of paperwork involved and a lot of phone calls."

Miller estimated she called the utility as many as 30 times.

CPS' has a policy governing how often the utility is allowed to estimate bills.

"When there is good reason for doing so, CPS may submit estimated bills using the applicable Rate Schedule and/or Service Agreement, provided that an actual Meter reading is taken every three months," according to the document "Rules and Regulations Applying to Retail Electric & Gas Service."

But several people told the Express-News their bills were estimated for more than two months in a row, apparently in violation the utility's policy:

Burnson's meters were estimated for three months straight, according to bills she provided to the newspaper.

The meters at Miller's home were estimated for three months in a row, bills she provided and utility records show.

North Side resident Eileen Shiman's meters were also estimated for three consecutive months, from November 2012 through January 2013.

CPS spokeswoman Monika Maeckle didn't directly acknowledge that in some cases the utility had violated its own regulations.

"I think it's unquestionable that we made a huge mistake and that we've owned up to that," she said, "and we're very sorry about it and we've been working nonstop to try and get it fixed."

The contractor

Over the past several years, the size of CPS Energy's meter-reading workforce has shrunk through attrition as the utility prepares to dramatically expand its use of smart meters, which will make the position largely redundant.

However, delays in rolling out the smart meters, combined with the ongoing attrition of CPS' meter readers, created a staffing shortage.

"Moving to (smart meters) has taken longer than anticipated, as so many things often do in a complex industry," Maeckle said. "Intensions were good. The process was slowed down by unanticipated issues that have popped up."

In 2008, CPS hired Contract Callers Inc. to provide it with meter readers, according to contracts obtained under the Texas Public Information Act.

While Contract Callers' meter readers accounted for more than a quarter of the utility's total meter reads in the summer of 2012, records obtained from the utility show, the company's employees were more than twice as likely to misread meters as CPS' own meter readers in July and August 2012.

"The contractor we had was making a great deal of errors," Beneby said.

The utility's August apology put it this way: "It became apparent during the summer of 2012 that the contract meter readers were making too many errors. The contract was ended, and CPS Energy then relied on existing staff and increased the number of estimated meter readings."

The contract with Contract Callers was terminated in November 2012.

As part of its solution to the staffing shortage, the utility told customers in its August blog post that it had signed a new contract for temporary meter readers in February.

However, the utility did not disclose to readers that its new contract was with Contract Callers, the very firm it had fired just three months earlier.

Records show the average error rate for Contract Callers' meter readers from February 2013 through October is comparable to the error rate it had in July and August 2012, before its contract was terminated in November.

However, Contract Callers President Tim Wertz disputed CPS' version of events.

"They told us they had budget issues at the end of the year and that was the reason they gave (for ending the contract)," Wertz said. The utility, he said, didn't offer a specific reason for bringing the company back. "They just said that they'd like for us to come back."

Wertz said he was unaware CPS had taken issue with his firm's performance.

CPS declined to answer repeated questions about why it rehired the firm.

However, in a written response to questions, Maeckle said CPS now only pays for accurate meter reads. That's a change from the utility's past contract with Contract Callers, when the utility paid for every meter read.

Even though the contract meter readers are back on the street and the number of estimates have returned to more normal levels, Anne Burnson's faith in CPS Energy to get it right remains shaken.

"I will always check (my meter) no matter where I live, from now on," she said. "It never occurred to me that you would have to distrust a public utility company."

nhicks@express-news.net

Twitter: @ndhapple

___

Visit the San Antonio Express-News at www.mysanantonio.com

http://www.energycentral.com/functional/news/news_detail.cfm?did=31109746&