Maragos: LIPA’s Error Prone Billing System Makes It Difficult for Commercial Clients to Manage Electric Usage

June 6, 2011

Nassau County Comptroller George Maragos released his audit of the electric usage by the County, which is provided by the Long Island Power Authority (LIPA), and found administrative deficiencies within the various County departments responsible for monthly billing approval. As a result, the County overpaid LIPA by $4.5 million from September 2009 through June 2010. The County Administration has indicated it recovered the overpayments and will create an action plan to better manage electronic billing and ensure that the weaknesses cited in the report are eliminated.

“We are happy to see that the Mangano Administration has recovered the LIPA overpayment and plans to create a task force to protect against future errors and overpayments,” said Comptroller Maragos. “The error prone LIPA electronic billing system however, and the poor customer service to billing inquiries by large commercial customers like the County, is incomprehensible.”

LIPA’s billing system for the County’s 1857 accounts was found to be error prone and lacks customer protection features against unauthorized service installations and unauthorized changes to customer account settings. Typical billing errors include:

• The County was erroneously charged sales tax.
• The County continues to receive paper bills for some of its accounts already on the electronic bill.
• Payments were erroneously applied to the County instead of other customer accounts that had made the payment. Two such noted errors were a $140,000 payment and a $3.9 million payment.
• The budget payment indicator flag was turned off for a County account which caused the typical detail account calculations not to be applied to this account, resulting in incorrect computations in the electronic billing system reports.
• County accounts had incorrect facility code numbers which made it more cumbersome for the County to allocate costs.
• LIPA added an unauthorized duplicate traffic signal to the County’s traffic signal accounts.
• LIPA created new accounts without any authorizing signature.

LIPA’s electronic billing system did not facilitate a large customer like the County to effectively manage its electric usage or to verify its ownership of the meters being charged. Debit and credit adjustments were insufficiently explained and meters could not be matched to addresses or lacked addresses altogether. Too often LIPA did not promptly respond to billing error inquiries in order to ensure a timely and accurate resolution.

LIPA Report