National Grid Refunds Buffalo $1 Million

December 5, 2017

National Grid Refunds Buffalo $1 Million as a Result of Comptroller Schroeder's Street Light Audit. Additional refunds are expected from remaining claims spurred by audit.

The City of Buffalo has been refunded more than $1 million by National Grid as a result of an audit of street light and electricity costs by Buffalo Comptroller Mark J.F. Schroeder.

"The city was being charged for street light fixtures that did not exist," said Schroeder. "Because of our audit, we were able to recoup those funds for taxpayers - with interest."

Interest represented about 40% of the $1 million refund.

"National Grid has to pay the same rate of interest that it charges its customers for late payments - 1.5% a month," said Schroeder.

Schroeder said the city has filed more than a dozen additional claims as a result of his audit, and he expects those claims to yield refunds as well.

"There were other significant overcharges that the audit identified, and we are pursuing refunds for those as well," said Schroeder. "National Grid just completed its own field audit, so we will compare the two and come to an agreement on how much more the city is owed."

With roughly 32,000 street lights, electric bills totaling more than $16 million per year, and a complex set of laws and regulations governing utilities, Buffalo Comptroller Mark J.F. Schroeder knew that the audit would require some outside help.

"With the manpower and expertise required for this type of audit, we knew we needed a firm with extensive experience a solid track record for getting refunds for its clients," said Schroeder.

After a competitive bidding process that resulted in proposals from across the nation, Schroeder found the winning bid in his own backyard. Buffalo-based Troy and Banks, a national leader in utility audits, has performed more than 10,000 utility audits in all 50 states. But it was the company's experience in Buffalo that really impressed Schroeder.

"Troy and Banks efforts in the 1990s led to a $1.5 million settlement with the city's electricity provider," said Schroeder. "This company knows the city's electrical infrastructure and the laws governing it."

Equally impressive as its experience was Troy and Banks price.

"We didn't pay a dime until we got a refund from National Grid," said Schroeder.

According to the agreement, the city pays 33% of refunds up to $100,000 and 25% of refunds from $100,001 and above.

"Troy and Banks usually charges its clients 50% of refunds, but our competitive bidding process resulted in the company offering an even better deal for taxpayers," said Schroeder.

The comptroller said that he will work with the Common Council to ensure these types of audits are performed periodically in the future, as there is six-year statute of limitations on over-billings.

"We don't want to miss out on refunds down the road, so we are looking to draft legislation to ensure this type of audit is done at least every six years," said Schroeder.