A top official at Seattle City Light yesterday acknowledged that the utility's new computerized billing system — much delayed and way over budget — could be to blame for inflated customer bills.

Known as the Consolidated Customer Service System (CCSS) and intended to improve customer service, it went online a year ago this month. At that time, it was more than a year behind schedule and, at $40 million, cost about twice the original estimate.

"They told us the hemorrhaging had ended and the system was working," Seattle City Councilman Jim Compton said yesterday. Now he's not so sure.

Compton noted that City Light and Seattle Public Utilities, a partner with City Light in CCSS, have asked for still more money at the same time evidence seems to be mounting that the system is behind City Light customers' recent billings that are way out of line with those they regularly receive.

Deputy Superintendent Jim Ritch, who oversees technology at the utility, yesterday said it was possible that CCSS was to blame. "We're still looking into that," Ritch acknowledged.

Compton said that during a briefing earlier this week, Marty Chakoian, the city's information-technology chief, told him a special team had been focusing on the basic sequence of generating a bill — meter, meter reader, transfer of the data to CCSS, bill output.

Compton said Chakoian told him investigators had eliminated meters and meter readers as possible causes of the bad bills. Chakoian did not respond to messages yesterday.

Compton described CCSS as a "persistent, running sore" for the city. If it turns out that the new billing system is to blame for the billing errors, "that's pretty alarming to me," he said.

"My concern is I thought we had an assurance that CCSS was no longer going to be a nightmare for the city, and now it appears otherwise," he said.

Compton noted that the system was clearly still not working right because City Light is seeking more money for various fixes. The request for an additional $1 million was in a $37 million budget-reduction presentation the utility made last week.

Ritch likened the situation to a new homeowner who believed the house was OK to inhabit, "but it might not be good enough for how you want to live in there."

Yesterday, Compton and Councilwoman Heidi Wills, chairwoman of the Energy and Environmental Policy Committee, said they would press for a full accounting of why the utility needs more money and what role CCSS might have played in generating the huge bills.

Wills said the billing problem had shaken faith "in the most important value we could have with our customers — the trust that they are being billed accurately. That's a pretty fundamental principle. It's the most basic arrangement between customers and the utility they own."

In addition, many affected consumers have reported that when they complained, the utility was arrogant and dismissive, insisting the bills were correct and lecturing them about the importance of conserving electricity.

Earlier this week, a Magnolia man filed a lawsuit against the utility to prevent it from shutting off his power while he contests his bill.

The utility is scrambling to find answers in time for a council hearing next Thursday. It hopes to explain why scores of consumers in recent months have received inflated bills — some thousands of dollars too high.

This week, the utility added a new page to its Web site entitled "Something Wrong With Your Bill?" It's at www.cityofseattle.net/light/news/features/memo4.asp

City Light noted it sends out more than 2 million bills each year, and "we will make mistakes on some of those bills." It also invited customers to ask for a supervisor if they don't feel they're being treated right.

The utility knows of about 75 consumers who have protested high bills. It has identified an additional 1,300 who potentially were over-billed because of a nonfunctioning filter intended to weed out wacky bills.

Utility officials have said some customers may be getting higher bills as part of a "truing-up" process to compensate for earlier undercharges caused by bad meter readings or inaccurate estimates.

When it generates a new catchup statement, the utility has billed as if all the consumption occurred during a single billing cycle, increasing the bill because of a three-tiered pricing system adopted last summer to discourage consumption.

The first tier is 4 cents per kilowatt-hour; the second is 8 cents and the third 16 cents. The highest rate is applied to all consumption exceeding 125 kilowatt-hours a day in the winter and 60 kilowatt-hours in the summer.

In an interview earlier this week, however, City Light's Jim Bassen, a senior analyst, said CCSS was modified to account for the three-tier rate structure. If a corrective bill was generated because of bad estimates, CCSS should not have penalized customers by bunching usage into a single billing period, he said.

Yet for unexplained reasons, that is apparently what happened in many cases, the utility acknowledged.

Compton noted that it was not just the bills that are thousands of dollars off that are of concern.

"How can we be confident, because my bills aren't huge, that I'm not being overbilled $3 or $30 and paying it anyway because I don't pay that much attention?" he asked. "We need to have absolute confidence in everybody's bill."

In a $15,000 report prepared for the city last fall, Pacific Consulting Group, a Seattle consulting firm, reviewed CCSS's history and the lessons learned from the project.

Originally estimated to cost $20 million and be done by late 1999 — in time for Y2K — the project suffered from, among other things, a failure to understand its objectives, too many members on the steering committee and the lack of a "systems integrator" to help coordinate "at least eight consulting/contractor firms," according to the report.

Seattle Times

-- Anonymous, April 12, 2002

Answers

WA: Some in dark on utilities' new billing system

Y2K Archives

-- Anonymous, April 12, 2002

Seattle City Light has been ordered to report to a City Council committee on a recent rash of complaints from customers who say that their high bills are clearly erroneous and that the utility has treated them insensitively.

One Magnolia resident, for example, has complained of a bill of $2,240 for December and January, far more than her typical two-month bills of around $150.

Councilwoman Heidi Wills, who chairs the committee that oversees the electrical utility, yesterday said she has asked City Light to explain "why this has happened and what we're going to do to protect our residents from this ever happening again."

The utility will report April 18 to her committee.

"I've gotten calls and e-mails into my office from residents who are frustrated at calling and not really getting their needs seen to," Wills said.

The Citizens Service Bureau -- complaint central for the city -- has received 24 complaints about Seattle City Light billing problems since Jan. 1, [§ Y2K+2] eight of which specifically mentioned high bills.

City Light also has received a spike in complaints recently, acknowledged Joan Walters, the utility's deputy superintendent.

Walters gave several possible explanations for the complaints:

• Certain guidelines used by a computer program to catch bills that are exceptionally high or low, compared with a customer's usual pattern, were not in effect for two days in late January. About 7 percent of bills -- or 700 to 1,100 a day -- would normally be caught and checked. During those two days, those unchecked bills instead went out to customers.

• The utility uses estimates for bills when it is unable to read a meter, such as when a gate is locked. Estimates are also used sometimes while the utility investigates bills rejected by the computer.

  Delays in getting the real figure can leave the estimate is in place for a long time. When the utility decides the correct rate, there can be a number of months of underbilling that are caught up in one month's bill, resulting in an abnormally high bill.

• Because City Light got into a bind of having to buy electricity at extremely high prices in 2000 and 2001, it amassed a huge debt to pay off the power costs and imposed a series of rate increases. In addition, the utility instituted a third tier in its rate structure, in which users are charged extremely high rates above a certain level of consumption.

  A customer who was underbilled for months and then caught up in a single month might be pushed into the third tier, which, when combined with rate increases, could produce an extremely high bill.

That's apparently what happened to the Magnolia woman, Walters said. The utility doesn't yet know why the woman was underbilled.

Walters said the utility is confident that its meters are accurate. Of 624 checked during a two-year period, only two were found inaccurate.

Sometimes meter readers make mistakes entering data, she said, but those eventually get caught by future readings of the meter.

"Billing adjustments are just a fact of life in a utility that sends out thousands of bills a day," Walters said. "There's a human being every step of the way. There's just the potential for mistakes to be made. We want people to get an accurate and timely bill."

Wills said the utility needs to be more sensitive about not doing catch-up billing in a single month.

People with billing questions should call 206-684-3000 or visit the utility service center during business hours at the Seattle Municipal Building, 600 Fourth Ave., Room 106. Or write the utility at 700 Fifth Ave., Suite 3300, Seattle, 98104-5020. Those still unhappy may submit a written request to appeal to the utility's hearing officer at the same address.

Seattle P-I

-- Anonymous, April 12, 2002

Dark day, red ink at City Light

Just as City Council members were delving into City Light's widening problems, a voice on a loudspeaker announced an earthquake drill.

It advised people to duck and cover.

City officials didn't need the advice.

Beleaguered by charges of overbilling customers who are already weary from rate increases, they were doing their own form of ducking and covering.

City Light Superintendent Gary Zarker, hoping to ease the outcry amid the latest news that one customer received a $16,500 electrical bill, said the utility will not shut off anyone's power for non-payment until it is confident that the bills being mailed out are calculated correctly.

And Councilwoman Heidi Wills, under fire for voting to raise electrical rates by about half, promised that the council will not consider any more rate increases this year "unless there is a very dire situation with City Light."

Although that may give ratepayers a measure of comfort, Wills acknowledged after the meeting of her energy committee that there will be a price to pay.

City Light may have to borrow more money, and the already-high rates may be in place longer.

Criticized for its previous handling of rising energy prices, City Light was stung again last week by a spate of complaints of overbilling. Most notable -- until yesterday -- was a $2,240 bill sent to Darleen Harrington.

But as utility officials were trying to explain the errors, there came news of an even bigger blunder: the $16,500 whopper that University of Washington accountant Joel Carey got in the mail.

His attorney, Dan Larson, told Wills' committee that Carey's two-month bill usually comes to about $175. But first he received a bill for $9,700, and then another for $6,800.

"So here he owes $16,500 when he's used to paying $175," Larson said.

Under intense scrutiny, City Light moved quickly to fix Carey's bill, changing his charge to $524 for four months. City Light spokesman Bob Royer said Carey's first bill, as well as Harrington's, were sent out during two days when City Light set its computer system to red-flag fewer suspicious bills for workers to double-check. Royer said the erroneous first bill might have skewed the second bill.

Zarker continued to insist yesterday the error problem was not widespread. The utility believes only about 100 mistaken bills were mailed, mostly during those two days.

He acknowledged some mistaken bills might be mailed out even when proper checks are made.

The utility mails more than 2 million bills a year. "We've all had to deal with our MasterCard bills," he said.

A short time after the first quake-drill announcement on the loudspeaker, another announcement said the drill was over. "The earthquake has concluded," it said.

City officials might wish it were true for them.

Despite Zarker's and Mayor Greg Nickels' assurances, about five others joined Larson in complaining about mistaken bills.

Wanda Riddley said she is barely getting by. "You know what's in my refrigerator? Some water and some relish." She was shocked to get a $1,400 electrical bill.

"You can pay your bills," she told council members. "Wait until you're in my position."

Despite the hoopla over the mistaken bills, City Light faces even a bigger problem first reported by the Seattle Post-Intelligencer in March -- a drop in power prices would shave off about $111 million in expected revenue from selling the city's surplus power.

The utility filled some of that budget hole quickly, announcing $37 million in budget cuts.

Zarker said the situation has improved somewhat because prices for city power are creeping back up. But City Light still needs to find millions to balance its budget.

Frustrated that City Light has not yet spelled out its plans, Wills said she would not leave ratepayers dreading another round of rate increases. "People need to know what the rates are going to be" to budget for them, she said.

She said the council would not entertain any more increases this year.

Councilwoman Margaret Pageler agreed, saying Seattle's water and garbage utilities are examining their own rate increases this year. "All these bills add up," she said.

Seattle P-I

-- Anonymous, April 19, 2002

City Light follies

After months of accounting missteps at Seattle City Light, Mayor Greg Nickels vowed the utility would do business in a more customer-friendly "Nordstrom way.''

Not even close. If City Light managed its business operations with as keen an eye as Nordstrom does, the utility would have fewer incidents of customer underbilling and overbilling and overall poor preparedness for the energy crunch.

Seattle Times reporter Susan Gilmore revealed yesterday that City Light underbilled three of its largest commercial customers — Nordstrom, Boeing and Seattle City Hall.

The error was discovered by astute Nordstrom facilities managers who wondered why bills were so low after the retailer's flagship store moved from smaller digs to the larger, old Frederick & Nelson building.

After following up on the tip and discovering faulty wiring on a Nordstrom meter, City Light researched its pool of large commercial customers and found unusually low billings at Boeing and City Hall over a considerable period of time. Yesterday, City Light identified a fourth building that was underbilled, a Wright Runstad building on South Jackson.

The utility now conducts an automatic audit any time equipment is installed in large, complicated buildings.

But come on, folks. City Light should not have to rely on honest customers to make sure billing procedures add up. The utility had a duty all along to monitor its own practices.

City Light has alienated the public several times recently by overbilling customers for outrageous amounts that look more like decimal errors than modern-day accounting procedures. The underbillings disclosed by The Times could run as high as $1.5 million.

Customers are paying 58 percent more for electricity due to the energy crisis. Increased rates will be in place longer than initially anticipated. City Light has to get its act together soon.

Seattle Times

-- Anonymous, May 05, 2002