The great laundry fiasco

One of the items that surfaced in Enstar’s new tariff filing was a request by the company to recover $5.7 million it paid the Department of Defense to reimburse the department for overpayment for natural gas used at the Fort Richardson laundry.

Daniel Dieckgraeff, Enstar’s manager of rates and regulatory affairs, said in pre-filed direct testimony dated July 17 that Enstar replaced a meter at the laundry in July 2002 because natural gas usage was expected to increase after Fort Richardson shut down a power plant which had been providing steam for space heating and water heating to the laundry and other buildings.

He said the new meter recorded the laundry’s gas usage correctly, in hundreds of cubic feet, but the readings were incorrectly entered into Enstar’s meter reading subsystem, which generates bills for service, as thousands of cubic feet, resulting in billings for 10 times the volume of gas actually used.

Enstar discovered the error in November 2007 when it installed additional equipment at the laundry to transmit usage information directly to Enstar’s gas control operations center.

The new electronic equipment transmitted volume readings in the correct scale and when Enstar reconciled volume information from the new equipment to historic volumes it discovered the billing error and corrected it.

The laundry got its natural gas from third-party suppliers and neither the Department of Defense nor the third-party suppliers noticed the problem until Enstar notified them in early 2008.

Dieckgraeff said Enstar has checked all of its large meters since the laundry error was discovered and now has a procedure in place for double checking such new installations.

Enstar has reimbursed the Department of Defense directly $5,710,270 — a combination of the estimated $3,309,008 in gas supplied to the department by Aurora Power and the $2,401,262 estimated cost of gas supplied by Mangco.

Earlier refunds made by Enstar to Aurora Power and Mangco were returned; Enstar subsequently paid the Department of Defense directly.

Dieckgraeff said it was his understanding that Aurora Power and Mangco refused payment “because they were asserting claims for ‘in-kind’ reimbursement, as opposed to the ‘in-value’ reimbursement Enstar was willing to make.”

Enstar is asking for reimbursement of the $5.7 million from its other gas customers through its tariff because the gas incorrectly billed to the Department of Defense was actually used by Enstar’s other customers.

—Kristen Nelson