Several months ago, Puget Sound Energy (PSE) sent a letter to its large commercial customers across its service area, including the City of Mercer Island. The letter was to announce a reorganization at the utility that would improve customer service for its major accounts customers.

Those at the city who have worked with PSE on a faulty meter installation and the back bill that resulted, might be hard-pressed to see a difference in such a move.

Two years ago, City of Mercer Island employee Fred Gu, discovered what appeared to be a major a glitch in the metering installed in the 43,000 s.f. Mercer Island Community and Event Center. Now after months of hand-wringing, PSE is impatient to collect more than $35,000 on a back bill that is based on an what some consider, a crude estimate.

Some say, the city might be getting off easy. The first back bill sent by PSE to the city was for over $216,000.

The first sign of trouble occurred in July 2010, when Gu, looking at graphs of hourly energy use, noticed a dramatic dip in the load for the building at around 10:30 one morning recorded a few days earlier.

Data collected by the meter, which sends out an electric pulse every 15 minutes to measure demand for energy, shows how much energy is used through out the day. The data is used by PSE to bill the city.

A public records request by the Reporter to the city for emails and correspondence with PSE regarding this issue generated hundreds of internal and external emails between the parties, involving more than 15 people. Most concerned the difficulty and delays of setting up meeting times between the parties.

After Gu sent his first email regarding the matter to PSE in August of 2010, emails were exchanged for nearly two years, until last month when the city finally decided to pay the back bill of $35,874.

Gu set about trying to find out what had happened on that July day. He contacted Jana Raasch and Marcie Olson, community center administrators. They both offered ideas, but could not explain such a steep drop at that time interval.

Gu called PSE, which told him that according to their data, the meter was working correctly.

Both Gu and other city employees who he spoke with were glad to note that overall, the energy use at the center, which opened in December 2005, was less. But each knew it was too good to be true.

After the drop, the amount of energy usage remained at about 30 percent less than normal — a stiuation that continued for several months, despite calls and emails from Gu and the city.

After several weeks of looking into the matter, Gu contacted PSE again with the data about the meter. PSE’s Ben Rupert, who worked with Gu on energy management, responded, saying, “The graph you sent me is quite interesting.”

Yet, weeks went by without a definitive answer about the cause of the problem.

Gu had been trained by PSE through a grant program to monitor hourly energy use and identify ways to save energy. Through his work, the city received rebates for meeting conservation goals.

After many emails and calls, PSE recognized the error. The wiring for the meter had not been right since it was first placed in 2005, Gu told others at the city in an April 2011 email after meeting with PSE. Three meters had been installed at different times since 2005, he explained. It was not clear, however, if a fourth meter had been installed in 2006 after vandalism occurred at the MICEC.

PSE made plans to fix the metering and set about to collect the lost revenue from the city.

PSE sent the city a $216,153.38 back bill for the account on Dec. 23, 2010. PSE quickly recalled the bill, saying it was an error, and pulled it from their system. The city retained copies.

Utility companies including PSE are regulated by the Washington State Utilities and Transportation Commission (WUTC), whose rules and procedures are state law. According to those laws, regulated companies such as PSE must charge the rates that have been approved in their tariff for any uncollected energy use. A broken or malfunctioning meter does not excuse payment — the utility, in fairness to its other customers, must collect unpaid usage charges. The company is allowed to estimate the amount of usage during the period when the meter was broken.

Sharon Wallace, the Assistant Director for Consumer Protection and Communications at the WUTC, said that she did not believe that the City of Mercer Island had contacted the commission for assistance in the matter by filing an official complaint or otherwise. She confirmed that the computations for back-billing are not specified in the law beyond being “reasonable.”

PSE notified the city that it would correct the amount owed and send calculations for the city’s review. If the city had another method to compute the bill, they would review it. In March 2012, a bill arrived in the amount of $35,874.

The city hesitated, wanting more information, and later sought to negotiate a deal with PSE.

On July 6, 2012, the city received a letter and spreadsheets from Brent Frimodig of PSE. A letter explained that “the back bill was calculated using over one year of accurate data [December 2010 to January 2012] as a baseline.”

After looking at the spreadsheets used to compute the bill, Gu emailed city Parks and Recreation Director Bruce Fletcher, who oversees the community center.

“I think what they did was [add] 30 percent on top of the past invoices that were under the old meter,” he wrote to Fletcher. “I, however, did not come up with an ‘accurate’ number. I think at best, one can only make estimation based on comparing the old with the current meter reading. But here is the problem: how much energy did we really use under the old meter? And is the current meter really accurate?”

A letter to PSE from Fletcher illustrates the city’s frustration. It said in part, “It is puzzling to see such a discrepancy in your billing process. The first figure certainly did not make sense, and I could not see any justification or formula application to come up with this [new] number.”

Fletcher tried to strike a bargain with the utility, offering that the city would pay half of the $35,874 bill, or $17,937.

PSE refused and offered a way to spread out payments.

The city is to pay PSE the full amount this month.