published Tuesday, June 3rd, 2014

After audit, Chattanooga Mayor Andy Berke wants EPB to publicly release billing data

Chattanooga Mayor Andy Berke
Chattanooga Mayor Andy Berke
Photo by Tim Barber /Chattanooga Times Free Press.
Berke Letter To EPB
Berke Letter To EPB
Global Green Audit
Global Green Audit

Chattanooga Mayor Andy Berke has moved to get ahead of an ongoing investigation by city auditor Stan Sewell into billing mistakes at city-owned EPB, pushing the utility to publicly release the information sought by the city's internal watchdog.

Berke fired off a letter on Saturday to the utility's board -- which he appoints -- asking for details about the specific amount that taxpayers have overpaid or underpaid as a result of EPB's difficulty keeping track of more than 6,000 streetlights, though Berke acknowledged that the city has known of mistakes since 2011.

"I urge you and the management at EPB to address these issues in a clear and financially responsible manner," Berke wrote in his first public appeal for EPB to provide specific details to account for its streetlights.

EPB's board will hold a news conference at noon today to address what Berke called "confusion and controversy."

The controversy stems from a previous report by the office of internal audit which found that under the city's streetlight replacement program, taxpayers would have overpaid about $250,000 per year to EPB because of charges for thousands of lights that don't exist.

The utility also admitted that it overbilled the Emerald Valley neighborhood for lights that didn't exist, though when neighbors discovered the problem, EPB immediately drove a refund check with interest to the neighborhood association to compensate them for years of overbilling.

Any audit or analysis of these discrepancies is made challenging because EPB, like many utilities, employs a "composite" billing system to manage more than 20,000 streetlights for the city, rather than tracking the lights individually. Individual lights don't have meters, but instead are tallied on a spreadsheet and multiplied by the number of night hours.

If an EPB fieldworker makes a mistake and marks down the wrong light during a replacement job, then the numbers fed into the spreadsheet are faulty. In this case, even a correctly calculated bill will erroneously charge the city.

EPB has said that though it may have technically overbilled taxpayers for electricity, it also underbilled the city for the cost of buying the lights that were actually on the poles. Those errors canceled each other out, according to EPB's own internal audit.

Sewell is in the midst of verifying EPB's claims. The utility provided him with an initial set of documents on Friday.

In Berke's letter to the board, the mayor urged the utility to continue cooperating with Sewell, but requested that the board "take this work a step further." He asked the utility's board to do its own calculations of any undercharges or overcharges for all EPB customers, and recommend what steps to take if any extra charges are uncovered.

"Please undertake these steps and respond as quickly as possible," Berke said. "We will pay for the energy we consume -- no more and no less."

This will be Sewell's second audit covering EPB' classification of streetlights. It will be at least the the third time that EPB has reported the issue to the city, including an internal audit presented to the City Council in May.

Harold DePriest, president and CEO of EPB, acknowledged that the utility misclassified thousands of its lights, but said it discovered and corrected the issue last summer, then informed the city.

It remains unclear when those corrections made it over to the Mayor's office, as his streetlight team continued through April to use EPB's flawed figures in its streetlight replacement analysis. Don Lepard, founder of streetlight vendor Global Green Lighting says it was he, and not EPB, who discovered the problem in the course of calculating the return on investment for his new LED lights.

"I met with the city and they said we'll take it from here. There weren't any adjustments based on what I had pointed out to them, they kept adding these charges to the cost," Lepard said.

Lacie Stone, director of communications for the city, said the Mayor's staff adjusted for "known issues."

Despite continued questions over the city's streetlight bill, Berke decided on May 10 to increase EPB's role in the streetlight replacement program and diminish the role of Global Green Lighting.

Contact staff writer Ellis Smith at 423-757-6315 or esmith@timesfreepress.com with tips and documents.

about Ellis Smith...

Ellis Smith joined the Chattanooga Times Free Press in January 2010 as a business reporter. His beat includes the flooring industry, Chattem, Unum, Krystal, the automobile market, real estate and technology. Ellis is from Marietta, Ga., and has a bachelor’s degree in mass communication at the University of West Georgia. He previously worked at UTV-13 News, Carrollton, Ga., as a producer; at the The West Georgian, Carrollton, Ga., as editor; and at the Times-Georgian, Carrollton, ...

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