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Spokane, Washington  Est. May 19, 1883
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Homeowners ‘back-billed’ $3K due to utility’s faulty equipment

Diane Kipp and her husband recently received a letter from Vera Water & Power saying they owe $3,140 because of an equipment failure. (Colin Mulvany)
Diane Kipp and her husband recently received a letter from Vera Water & Power saying they owe $3,140 because of an equipment failure. (Colin Mulvany)

“You may have noticed that your Vera bill has been lower recently or over the past several years,” read a letter sent to Jeff and Diane Kipp last month from their electric provider, Vera Water & Power.

They hadn’t, Diane Kipp said. But no matter – the letter went on to tell the Spokane Valley couple that they owe $3,140.85 for electricity used, but under-billed by Vera.

The letter acknowledged the snafu was “due to our equipment failure,” and offered the Kipps additional time to pay. It’s called back-billing, and it’s perfectly legal.

State law protects all of a utility’s ratepayers, explained Amanda Maxwell, spokeswoman for the Washington Utilities and Transportation Commission. A company can’t just forgive a debt by one customer at the expense of other customers, even if it is the company’s fault, she said.

The commission doesn’t regulate Vera Water & Power, which is a publicly owned utility that serves about 10,000 customers. Back-billing is a practice used throughout the utility industry, however.

Kevin Wells, Vera’s general manager, said in the Kipp’s case, their electric meter was working fine, but an automated reading device added several years ago to transmit their usage over power lines started slowing down. The company caught the error in an audit of its equipment.

Wells said the audit found that less than one-tenth of one percent of Vera’s metering equipment was faulty.

That’s not much comfort to Diane Kipp, who said she and her husband were stunned by the letter.

“My husband is close to retirement age,” she said. “What if he’d already retired? We’d have no way to make up that money.”

Their 3,000-square-foot house was built in 2001, and is well-insulated, Kipp said. She provided copies of the couple’s billing records, which indicate not much change from year to year. The under-billing occurred just for electricity, the Vera letter says.

The Kipps have disputed the charge, questioning how Vera arrived at the $3,140.85 figure and how long the under-billing had been going on.

In Washington, customers must be given as much time to catch up on their bill as the under-billing was occurring.

Some other states cap the number of months customers can be subject to back-billing.

The Kipps want the equipment manufacturer and Vera to shoulder some of the blame for the billing failure.

Wells, the Vera general manager, said all faulty equipment discovered during the company’s audit has been replaced.

The company tries to audit the remotely read meters every three years, he said. There’s no requirement for how often a utility must audit its equipment, but state law says customers can request that their meter equipment be checked once a year.

Vera Water & Power recently told the Kipps that it will consider their appeal of the charge and have an answer for them within two weeks.

Diane Kipp said she’s most angry that the practice of back-billing is legal.

“If I go to Target or go buy tires, once I’ve paid the bill they can’t run out to the parking lot and say, ‘Whoops, we didn’t charge you enough, come back in and give us more money,’ ” she said.

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