Gas meters: Xcel billings get a review

Thousands of Minnesotans who might have marveled at their low heating bills last winter are getting a late jolt of cold winter.

Xcel Energy Inc. started sending out catch-up bills to customers last month -- mostly in the St. Cloud area -- after noticing that malfunctioning meters registered zero gas consumption for at least 9,000 homes. The failures ran as long as January through March, and past-due amounts ran from $200 to $800, according to Xcel and energy regulators.

The utility last week agreed to suspend the collections for 60 days, after the Minnesota Public Utilities Commission (PUC) sent Xcel six pages of questions -- asking among other things how the power company failed to notice all those zero readings for so long, how it's estimating what each homeowner owes for the unmetered months and how widespread the problem is. Minnesota regulators also were concerned that Xcel had started its rebilling -- with about 1,300 notices already sent out -- before telling the commission there was any problem in mid-July.

"There is no explicit requirement that Xcel has to inform the commission before it rebills a customer for an inaccurate meter," said Janet Gonzalez, energy unit manager at the Minnesota PUC.

"However, it is the scope of this that's concerning. And it's our expectation they [Xcel] would have been in contact with our consumer staff earlier to work out any concerns our staff would have."

Xcel declined to comment about the Minnesota regulators' concerns, except to say that it is gathering the information they requested and replacing faulty meters as quickly as possible. Xcel must file its answers to the PUC by Aug. 21.

A similar flap is going on in North Dakota, where regulators said about 4,400 Xcel customers in the Fargo area -- including several hundred just across the state line in Minnesota -- also had nonfunctioning meters.

Gonzalez and regulatory documents lay out this chronology: Xcel installed new modules in some customers' gas meters late last year. About 10 percent of those -- 4,400 in the Fargo area and 8,700 in the St. Cloud area -- are known to have malfunctioned, showing the zero consumption.

Some of the new modules -- which showed about a 10 percent failure rate in Fargo and St. Cloud -- also have been installed in the Twin Cities area.

After Xcel discovered the error, it calculated the unpaid balances based on the gas bills to those addresses for the same months going back two years, then billed the homeowners for the lower of the two.

Customers in both states called regulators, complaining they didn't understand the bills; some said they got two or three of them on one day, all showing different amounts. Regulators in both states asked Xcel to suspend the billings and collections for 60 days until the situation can be clarified. Xcel agreed.

Among the other questions Minnesota regulators have for Xcel: Has the utility identified customers who did report questions with their bills? (Under Minnesota law, those customers cannot now be charged.)

"It appears to me that Xcel followed the rules," he said. "But when we think of those rules, we think of them for isolated meters, not 4,400 of them.

"So it appears they've satisfied the rule, but this has sparked a debate here whether the rule is OK."