Friday, March 28, 2008

Questar Attempting To Gouge 500 Utah Customers For Up To Two Years Of Back Payments Because They Misprogrammed Their Meters

Click HERE to review all posts regarding the Questar issue. The most recent post will appear first.

Approximately 500 Utah customers of Questar received unpleasant surprises when they opened their latest gas bills. They found extra charges tacked on - in one case, an extra $2,299.09. The average additional charge is $1,200. In some cases, the problem goes back four years. Full stories from KTVX Channel 4, KSL Channel 5 (HERE and HERE), the Salt Lake Tribune, and the Deseret Morning News.

Update: According to a brand new KSL report dated March 28th, Governor Jon Hunstman Jr. has now expressed an interest in this situation. State officials are advising affected consumers to go ahead and make arrangements to pay the bills. This implies that if Questar's bills are overridden by the PSC, Questar may be directed to send rebates to the affected customers.

Update #2: New post dated April 18th contains new information on this issue.

How did this happen? Beginning four years ago, transformers were installed on meters statewide. They allow Questar employees to retrieve the info from the meters into laptops in their cars, instead of having to walk from meter to meter (probably cut down on dog bites, as well). And for the most part, it's been a success.

Unfortunately, 500 of those meters were programmed incorrectly. The discrepancy wasn't discovered by Questar until November 2007, when the company loaded new software into their computers and for the first time, checked the information being transmitted. They immediately noticed that some of the readings were out of line with historical uses, reflecting only half the normal usage. So, without any warning, Questar suddenly billed customers what they would have owed over the last two years: an average of $1,200 a customer. And the mistake has cost Questar $600,000. They want the customers to pay for the entire mistake.

Questar readily admits it was their mistake but says the money has to be recouped. "There's no dispute about the fact that they used the gas," Questar spokesman Chad Jones said. "It's no different than if a cash register or a scale at a store was wrong and the retailer came back and said, 'Hey, we under-billed you.'"

[Ed. Note: Interesting explanation by Mr. Jones. If a cashier ran up to me as I was walking out of a store after making purchase and told me I underpaid, I would accept that and make it good. But what if the manager of your local Fred Meyers knocked on your door three years later and demanded back payment for being undercharged on a purchase made three years ago? Would you be willing to make that good as well? There has to be some time limits.]

Questar's position is also supported by the fact that, under rules set by the PSC, the company can go back 24 months to adjust a customer's bill after an underbilling is discovered. That includes problems related to its gas meters. However, there are other provisions that may limit the company's ability to backbill for a shorter period of time - six months. And that question is one the PSC probably will take up.

One Questar customer has been particularly victimized. When Nancy Mitchell opened her December Questar gas bill she couldn't believe what she saw. “There's a line that says corrections, $2299.09 and I'm thinking to myself what? What is this?”, exclaimed Mitchell. And Mitchell further explained to KSL, “I figure they've installed wrong equipment, that's not my problem.” And in response to those who would ask if she didn't notice a sudden drop in her gas bill, Nancy Mitchell has this response: “Over the past few year's we'd installed new furnaces...and we had also insulated our ceiling, put new insulation in.” So in this case, any sudden drop in gas charges would understandably be attributed to the series of home improvements accomplished. Mitchell would have no reason nor the technical expertise to assume she was being erroneously undercharged for gas. Yet she's being socked with what is, essentially, a $2,209.09 "penalty". Other horror stories are available at the other links.

Two other customers likewise claimed they could not have known this was coming. Lori Garcia said there was no way she and her husband could have known the transmitter on their gas meter was sending the wrong information. "We had this home built and moved in two years ago," she said. "It was about the same-size house we had before, and the bill was about the same for both."

Robert Slattery of Salt Lake City was told he owes $370. "I was told that I should have known when my bill went down that something was wrong," he said. "But that was around the same time when I had a new furnace and extra insulation put in my house. It made sense to me that my bill would go down."

For now Questar says they are offering several payment options to these customers, but still some questions that need to be answered. Mitchell wants to know, “How many people were over charged as a result of this? And can they prove that no one was over charged?”

It could take some time before this matter is resolved. Although Questar says it is working with people to establish a payment plan, thirty-four customers have already filed complaints with the Division of Public Utilities. If you're affected by this and are not satisfied with Questar's response you can contact the Utah Division of Public Utilities at 800-874-0904. Or click HERE for online instructions.

A blogger named Bruce Fryer claims the problem could have been caught earlier by "writing a simple computer program which compared past bills with new bills and flagged the difference if there was a wide variance. But they didn't. Instead they told their customers it was their fault because when their bills went out and were much lower, the customers should have called Questar and said there was a problem". Of course, only longtime customers familiar with Questar's billing patterns and who had undertaken no significant consumption abatement measures would realize there was a problem.

A whole gaggle of additional Questar stories have been aggregated HERE. Among them: Questar realized a 14 percent growth in income in 2007, and declared their 253rd consecutive dividend. To be fair, Questar also applied for a rate cut at some time in 2007.

Commentary: Five hundred customers can exercise powerful leverage. Consequently, I recommend every affected customer file a complaint. I also think it would not be inappropriate for them to consider retaining an attorney to prepare a possible class action suit against Questar. This will put Questar under a well-deserved spotlight.

And why is it well-deserved? Because this is not a fluke. It is symptomatic of, at the very least, a culture of carelessness which has become well-entrenched within the company. In this case, the culture of carelessness merely imposes financial hardship. But in other cases, it has had catastrophic consequences.

In February 2007, breach of a gas line caused an explosion which completely leveled a house in Saratoga Springs and cost two lives, including the supervising Questar technician on the scene. While a sloppy sub-contractor actually caused the problem, there was inadequate on-site supervision by Questar. This was implicitly acknowledged in the recent seven-figure settlement paid out to survivors.

In October 2007, breach of a gas line caused an explosion inflicting catastrophic damage upon the Country Lake Apartments in Millcreek. While the Questar technician acted heroically in leading several residents to safety, his carelessness caused the line breach. He is now facing criminal charges.

This indicates a recurring pattern of carelessness, thus Questar should be placed under greater public scrutiny. Questar has shown a penchant for emphasizing profitability over safety. But the final objective of the 500 customers should NOT be to escape the charges altogether, because they did use the gas. Instead, the final objective ought to be to get Questar to admit to some responsibility and respond with a realistic counteroffer; namely, offer to knock 50 percent off the delinquent bills. This would be a commendable, public-spirited gesture on their part.

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