Stealing electricity & legal recourse

[goldstar]

I service a medical building here in town (built some time in the late 70's early 80's) that is occupied by several doctors, two of whom have owned the building since 1983. The POCO recently advised them that they have been stealing electricity and owe them upward of $ 16,000.00 ( the difference between actual and measured usage) for the past 6 years (statute of limitations). After meeting with them yesterday it became obvious that POCO was correct.

The building is supplied with a 400 amp, 120/208, 3-phase service. The service enters the building into a disconnect switch and then down into a trough where it feeds 3 CT cabinets (the trough is a standard screw cover trough with no means of locking). The first cabinet has a demand rate meter and the other two don't. As far as I can tell it appears that the first occupants were metered and the other two CT cabinets were provided in anticipation of new tennants. Over the years, whoever the electrical contractors were provided power for the new tennants and set up their equipment in sections provided above the two spare CT cabinets. The CT cabinets did not have locks on them but did have POCO tags. The tags were cut off, terminals were jumpered out where the meter connections would have been landed and the power tapped off these terminals. The installations were inspected (there are stickers on the panels) and the cabinets re-tagged.

It is POCO's contention that whoever installed these panels knew that they were stealing electricity. It is my contention that it was not done maliciously and that it was inspected by an AHJ and passed. Someone other than the building owners are responsible for this error.

There is no argument by my customer that he owes POCO for these charges. However, I would like some opinions as to what might be done to seek legal recourse for damages. Can we seek restitution from the installing contractors ? The township or inspecting authority ?

Thanks in advance.

[ January 23, 2004, 06:08 AM: Message edited by: goldstar ]

 

[charlie]

Re: Stealing electricity & legal recourse

When current diversion is found, we go after the entities that are using the power. If others are brought into the case, that is up to the entities that are being sued for theft. If we go after the building owner, the court will sustain and the building owner will then have to eat the costs or go after the leasers.

This may not seem fair but we have no record of the ones who were leasing the spaces. We have to go after the ones who have the ultimate responsibility.

 

[pierre]

Re: Stealing electricity & legal recourse

I also have recently been involved where the owner was charged for the tenant space that was using the neighbor's panel for power. The owner had no idea of this and was pissed off that someone else (they do not know who) performed the work and he has to pay. He also had to pay me to rewire to proper wiring. OUCH!!!

Pierre

 

[racraft]

Re: Stealing electricity & legal recourse

What damages? Is the POCO trying to impose a fine of some sort or file charges, or are they only trying to recover charges for electricity?

Since the owners of the building have been there since 1983, they should be on the hook for the full $16,000.00. Since they don't dispute their responsibility, I say correct the problem, pay the charges and move on.

 

[jimwalker]

Re: Stealing electricity & legal recourse

Most likely they only expect to get paid for the electric.Just how they intend to be accurate on this i don't know.Would seem that who ever was the tenant at the time should get the bill.Was the electric included in the rent ?If not then they had to know they were stealing if they didn't get a bill.My thinking says the poco probably would settle out of court for a reduced amount ?
Does the poco have some responsibility here ? It is there job to meter usage.Had someone been on the ball they would have caught it well before 20 years.
If they checked my meter and found it off by 10 % and went back 6 years and wanted additional money i think they would have a hard time getting it.
This should and could have been caught in early years.Not to sure if a court would rule for them as they were negligent.

[ January 23, 2004, 12:11 PM: Message edited by: jimwalker ]

 

[goldstar]

Re: Stealing electricity & legal recourse

Thanks for the opinions guys. Had another meeting with a POCO engineer today. While the building owner and I openly admit to POCO that there has been a violation and we are aware and accept the fact that there should be back-charges for the theft of electricity, it's POCO's position that this is "theft of service" pure and simple and that we are solely responsible for making restitution and correcting this as soon as possible.

It is also POCO's position that the entire installation was not done in an approved manner because there is a disconnect switch ahead of the meters. I agree. However, in order for this building to have obtained a certificate of occupancy (way back in the late 70's) someone from POCO, the AHJ representing the township and the engineer who designed the electrical layout would have had to approve this installation. Shouldn't POCO and these others have to share some of the burden of responsibility for this installation ?

POCO has temporarily installed a meter to measure the total amount of electricity used. They have only measured for this month but based on their findings they have determined that there has been a 40% increase in usage. We still have to determine how much the summer usage would be.

As far as what "damages" there might be I would say that there is the cost of correcting this mess, down time, loss of business, etc.

Any other opinions would be appreciated.

Thanks,

Phil - Gold Star Electric

[ January 23, 2004, 05:47 PM: Message edited by: goldstar ]

 

[jimwalker]

Re: Stealing electricity & legal recourse

The poco is acting about the way i would expect,deny they had any part in this.Some how this system did pass there ok back when it was built or the first meter would never been set.Thinking maybe i would wait and see if they go for criminal charges first.And who would they get,the EC that might not even be in buisness.They would lack intent unless someone was paid to bypass the meter.A lawyer is in need here.Not so sure its the owner that should pay.Owner is just the easy way out for poco.
If i rent my house to someone and they bypass the meter ,who would they collect from ?
My thinking is they need to go after the person that USED the electric.Sounds like a tenant moved in and electric was on,so they never called for service.When no bill came in they had to know something was wrong.They knew they were taking a free ride and just kept quite.

 

[charlie tuna]

Re: Stealing electricity & legal recourse

jimwalker,
if you rented your house and your name was assigned to that power company account-you would be responsible, on the other hand, if the tenant's name was assigned to that account- they would be responsible. since there were no meters involved with the original problem the property owner is responsible for the power usage on his property. it would be his problem to determine who bypassed the power directly to his tenant and prosicute them. the power company will get payed-thats for sure! i know of an instance where two meters (these were submeters installed by the building owner) were reversed so that one tenant was getting the other's bill. one tenant found this out when he moved out after a ten year lease. it went to court and they ruled that the owner was responsible for the accuracy and correctness of the meter equipment - therefore he was required to refund both tenants all the moneys collected from these two meters. he sued the installing contractor who was required to pay the first years usage. the meter manufacturer suggested that the meters be calibrated after the first year of useage - they were never calibrated. the building owner would have found the problem at that point-so the court ruled the balance of nine years back to him...be very careful on btu meters in this reguard!!!

 

[jimwalker]

Re: Stealing electricity & legal recourse

The tenant had to know he owed for electric.Will agree that someone owes the bill.

 

[tom baker]

Re: Stealing electricity & legal recourse

This matter will most likely be settled in the courts.
A building my employeer owned had 50 year old switch gear in the basement, and the POCO was converting from overhead to underground feed. During the outage we were going to open up the gear and trace out the circuits. Most of the feeder breakers were not marked as to the load, there were 3 meters that had been added to the orginal gear. The POCO was certain that some loads were not metered, they had a meter man come in on OT to observe as we worked on Sunday AM.
What we found was that two of the three meters that had been installed were downstream of the main POCO meter. They sold the same power twice.
I don't know who if anyone got a rebate.

 

[brian john]

Re: Stealing electricity & legal recourse

We were involved in a utility outage several years ago, after the utility had pulled the CT?s to disconnect power, we found one service still energized. Upon closer inspection, we found the installing electrical contractor had tapped the emergency service ahead of the CT?s.

This was brought to the attention of the owner and local utility. Several years passed and nothing happened. Did a second outage and again pointed this out to the utility representative. This time they acted.

The wanted the owner to pay for usage from day of the first connection (12 years) this owner had only owned the building 4 years. The total yearly charges were very high.

It was agreed that we would connect a KWHR meter approved by both parties for a 90 day period and the bill would be adjusted (up or down) to reflect that amount. This usage day to day was very similar, as this was emergeny lighting and elevators therefore there would be no seasonal changes. During the 90 day period I met with a utility rep on another project regarding a different subject, I asked him about this project and he said he had filed a report regarding this problem, the day the service was first energized. His bosses had never acted upon his field report, oops.

The new owners paid the amount they owed based upon the 90 day monitoring for the period of time they owned the building. The 90-day monitoring resulted in a bill approximately 60% of the original bill.

The owner never disputed they owed the money, just the time frame of the bill and how the utility arrived at the amount.

The utility is no different than any other business, they hate to be taken advantage of (stealing electricity) and they want to maximize their profits, aim high and settle some where in the middle, still ahead of any loss.

We had the service properly wired, which required the utility cutting cables in the street, originally they wanted the owner to pay $12,500.00 for this service, the utility waived this fee.

[ January 24, 2004, 08:32 AM: Message edited by: brian john ]

 

[charlie tuna]

Re: Stealing electricity & legal recourse

the tenant doesn't always know they are responsible for the electric bill -- i've seen it both ways. one customer who we convince to arrange his metering to buy it under one account, found out he had been paying many of his tenant's electric bills in error! some of their lease aggreements were near ten years old! the lease called for them to pay their own electrical bill, but nobody told the girl in the leasing office and the account was never changed to the tenant's name. and it was the local county police department who could well afford to pay for it! the owner contacted the county - they refused to pay and told the owner they would only pay the electric bill when the account had their name on it! there bill ran about $1600. a month--right out of the owner's pocket! but on the other hand the owner began to save about $12,000. a month by buying his power "at a bulk rate" on this project. we consolidated about fifty meters into one. years ago, some office buildings were engineered as though they were going to be like condo's. two meters per floor or four. but the way they expand and contract it never works out, but we have seen many times one tenant paying for another's power. most of the lease agreements concerning power costs are usually outdated in reality of today's power costs. like $.05 per square foot.(example only) when it might cost the owner $.075 a square. doesn't sound like alot of money but the little difference adds up "big time"! the smart owners are incoporating metering in their lease agreements and we see it really pays off for them. one building we installed a e-mon set up that prints out the tenant bills monthly - the owner told us that the money saved on that system pays the salaries of his engineering staff!!! and the tenants seem to turn things off at night too... for that reason, they maintain the metering system to be correct as tenants expand or change office layouts. motorola was a big tenant in this building years ago and had a squable about power and had us put the original system in - they found out they should have kept their mouths shut and the owner found out he was not charging enough for tenant power consumtion. this is the motorola branch that was developing the "nextel phone" and they were working around the clock on some of it! and when they nigotiate a lease agreement - the tenant has no problems with paying for the electricity he uses rather than a cost per square foot... electrical contractors should make their customers aware of these savings. another office building- the first one we got involved in- the savings was over $16,000. a month and our system installation cost was around $38,000.. we had estimated a cost of $68,000. to install, but half way into the job the power company offered to sell me the c.t.s for $50. each installed!!! the representative said "we will not reuse them and we normally sell them at $50. apiece. i passed the savings on to my customer which was a big job cost since this work would require overtime to disconnect the services to install the c.t.s... new tenants pay for their metering equipment in the tenant buildout costs. it's a win-win deal for the owner!!!!

 

[jimwalker]

Re: Stealing electricity & legal recourse

If i rented office space i think i would ask the amount of rent and what utilities are included.Yes some do include electric ,but im sure when you sign the lease you will know.

 

[electricmanscott]

Re: Stealing electricity & legal recourse

This is an odd place to seek legal advice.

 

[goldstar]

Re: Stealing electricity & legal recourse

Just askimg for opinions Scott. While I enjoy reading all the answers and opinions, when it comes time to go into court we'll have a lawyer with us.

 

[charlie tuna]

Re: Stealing electricity & legal recourse

scott,
i'm not giving legal advice - only issues that have occurred concerning metering problems is my past. i think it's important for electricians to realize what can happen and what large amounts of money can accumulate in utility bills. when a customer asks us to install a metering device it is very important that it is installed on the correct power feeder. as a contractor, you could be responsible for more money than your company's worth!
jim,
now lets say you signed a lease and you were responsible for your own electric, but you never got a bill. i'm sure you would call your management company and demand one? ya right!

 

[charlie tuna]

Re: Stealing electricity & legal recourse

i forgot to add--years ago a large ice cream company payed someone, with access to their power company's vault, to preform work to reduce their bill. this was proven in court, and they were charged the highest estimated bill the power company could render, plus interest on that money, plus a heafty fine. the bill was around 1.5 million..

 

[jimwalker]

Re: Stealing electricity & legal recourse

Wouldn't want to be standing in front of a judge explaining that as a defense action.Bill? here you are $16,000

 

[electricmanscott]

Re: Stealing electricity & legal recourse

now lets say you signed a lease and you were responsible for your own electric, but you never got a bill. i'm sure you would call your management company and demand one? ya right!
--------------------------------------------------------------------------------

Your damn right I would. I'm no theif.

 

[goldstar]

Re: Stealing electricity & legal recourse

We somehow got off on a tangent here regarding this topic. In my scenario the building owners purchased this building under the impression that there was only one meter for the entire building and that the electric bills were shared by all the tenants equally (I believe about 4 doctors and 2 other tenants). That's not to say that the original owners may or may not have known that additional meters were not installed. The more that I look at this installation the more I believe that someone knew full well what they were doing when they bypassed the metering cabinets.

In all probability POCO would never had questioned any of this had an electrician (on 2 separate occasions) not installed a breaker panel tapped directly into one of the metering cabinets instead of the wiring trough downstream of the metering cabinet. Talk about brilliance !!!