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City of Buffalo overcharged $1 million by power company

The City of Buffalo was overcharged at least $1 million by National Grid, and more disputed charges are being examined.

An audit by local firm Troy & Banks, on behalf of Buffalo Comptroller Mark Schroeder, found roughly 15 disputed charges to the city’s utility bills over the past several years.

The first and largest claim involves 3,500 street lights the city was billed for that did not exist. National Grid said that overcharge was atypical, and that it was the result of a data entry error that has since been corrected. The mistake resulted in a $578,000 overcharge, which has been accruing interest at 18 percent annually since August 2011 and now totals $1 million.

So far, the city has received a payment of $300,000, and Schroeder’s executive assistant Patrick Curry said the city is “optimistic” the final payment will be made in full “soon.”

National Grid is now completing its own field audit to verify the city’s other disputed claims, which it expects to wrap up in March.

“Recent audits we’ve done elsewhere have shown that, typically, the identified errors represent a very small percentage of billed components,” said Stephen F. Brady, a National Grid spokesman. “We have no reason to believe this audit will be any different.”

National Grid said it does not perform field audits on a regular schedule, but will perform them to address specific billing issues.

According to the terms of Troy & Banks’ proposal, the auditing firm receives 33 percent of the first $100,000 recovered, and 25 percent of everything collected beyond that. The statute of limitations on recovering overcharged funds is six years.