Errors in utility bills

Instead of wasting time and energy arguing about the revised water and electricity tariffs, as the trade unions seem to be doing, one would do better to keep a lookout for some serious errors in the utilities bills.

Recently I received a bill for €477.90, based on actual readings, this being the balance due for a period of 252 days after I had already paid €184.25 for the same period on the basis of estimated consumption. This means that the utility bills for this period amounted to €662.15 and it may be pertinent to point out that these bills concern a house that I use only occasionally.

To my surprise I noticed that of these €662.15, no less than €423.97 (64 per cent) was due for water consumption only!

On investigating these figures I discovered that the last water reading but one was taken in November 2006, more than three years before the last reading of January 2010, and that all water charges billed in the intervening period were based on estimated consumption. I discovered further that the water consumption between November 2006 and May 2009, when the average cost of water was approximately €0.74 per cubic metre, was estimated at only 28 litres per day. However, between May 2009 to January 2010, when the average cost of water shot up to approximately €4.42 per cubic metre, water consumption was estimated to have shot up to 381 litres per day - an increase of almost 1,400 per cent!

What happened here was that, since the house in question is not used regularly, the meter reader often had no access to the water and electricity meters so that the utilities bills had to rely on estimated consumption for well over three years. Unfortunately, during this period there was a gross underestimation of consumption that over the years accumulated to a considerable discrepancy. This discrepancy came to light only when the actual reading was eventually taken earlier this year, after more than three years. However, instead of correcting the underestimation in the previous bills, ARMS Ltd levelled out the total consumption by accruing this underestimation to the last bill.

The problem is that, on average, the water rates in the last bill were six times the applicable rates when the underestimation had occurred!

While the prices of utilities remain constant, sending out bills based on estimates and then reconciling everything on the basis of actual readings would be a very practical approach to billing because it is conducive to better cash flow. However, when the prices of utilities fluctuate, it is essential to ensure that an actual reading is taken at the exact moment when the price changes, otherwise the consumer would be exposed to risk for which he/she is not responsible, as the case described above amply demonstrates.