Note to readers: This story has been changed to reflect the correct rate that DeKalb electrical customers were supposed to be charged beginning July 1.
DeKALB – A power supplier plans to reimburse 5,800 residential and business customers in the city after overbilling them for electricity since July 1, officials said Tuesday.
Under an electrical aggregation contract City Council members approved in March 2014 with electric supplier Homefield Energy, power rates for customers in the DeKalb city limits were supposed to decrease by 12.9 percent beginning July 1.
However, the company did not enter the change into its billing system, and customers were billed at the previous rate of 7.237 cents a kilowatt hour, rather than the contractually required 6.307 cents a kilowatt hour.
Electric bills were issued by ComEd, which delivers electricity to customers, but Homefield is the supplier.
A spokesman for Houston-based Dynegy Inc., which owns Homefield, said the error was a mistake on the company’s part that would be corrected going forward.
“We take full responsibility for this error and sincerely regret any inconvenience this has caused the city of DeKalb and its program participants,” Dynegy spokesman David Onufer wrote in an email to the Daily Chronicle. “The billing issue has already been corrected as of [Tuesday] and residents will be billed properly going forward.
“We are in the process of calculating the refunds and determining the best way to issue (the refunds), either directly to residents or through bill credits.”
DeKalb Mayor John Rey said a couple of customers brought the issue to his attention over the Labor Day weekend, and Tuesday, Public Works Director Tim Holdeman set to work trying to address the problem.
“I’m disappointed that Homefield Energy wouldn’t be monitoring those rates more closely,” Rey said. “... We will certainly look into what legal recourse the contract will provide the city and our consumers.”
Holdeman said the amount that customers were overbilled would vary based on when their meter readings were taken, as not all customers are on identical billing cycles.
“That’s a complexity in the system because not everybody has their meter read at the same time,” he said, “So that’s something we have to work through.”
The city negotiated the agreement on behalf of residents and small-business customers in 2014.
The new prices marked a 55 percent increase over the rates that customers had paid under the first contract.
All residential and small-business customers were automatically covered by the agreement unless they specifically opted out, according to Dynegy’s website.
Holdeman said he was glad that residents were paying attention to their electric bills and notified local officials. The problem was in the process of being solved within hours of officials first learning of it Tuesday, he said.
He said that although the agreement was negotiated by the city on behalf of local customers, in the end it was an agreement between a company and its customers and there wasn’t an effective way for city officials to police it.
“We would not be able to monitor all 5,800 accounts that are going out as a ComEd bill,” Holdeman said. “I’m not sure that would even be legal.”
Rey said he agreed with Holdeman’s conclusion that the city would have a hard time ensuring Homefield’s compliance with the agreement.
As to whether electrical aggregation agreements are still a good deal for customers, Rey said the city’s role was to negotiate an aggregate agreement, with individual customers deciding whether it made financial sense for them.
“A consumer would have to make that judgment on their own,” Rey said.