LUSI accused of grossly overcharging

In a presentation to Council on Monday August 12, Drew Macklin of William Street Brewery Co. (WSBC) plans to say that LUSI accepted their water meter’s reading despite strong evidence that it was giving faulty readings.  The cost to the fledgling craft brewery was $8,050 (plus interest which brings the total to $10,101)  – but the business has also suffered.  The overbilling started when a new water meter was installed in December 2017 and only stopped in April 2018 when the meter was replaced.  WSBC tracks water usage separately and their measurements now agree but during the 5 months of alleged overbilling they were wildly different. No leaks were found and LUSI cannot explain where the extra water went but point to a change from a water cooled condenser to an air-cooled one as the possible reason despite strong evidence from Drew to the contrary.

William Street Brewery
William Street Brewery

In the end, it’s a case of a customer providing evidence and the Utility refusing to accept that and simply saying, in effect, that their meters are never wrong.  But other cities have experienced meter errors and there is a U.S. Class action suit in the matter.  One of the possible reasons for errors was that since the meter is digital, its proximity to electrical equipment could be a problem but that idea was dismissed. Along the way, Drew brought the matter to the attention of the LUSI board and Mayor Gil Brocanier but was told that they are following policy and refused to respond to his evidence.

Evidence presented

  • In 133 days (December 18, 2017 to April 30th, 2018), WSBC was charged for 18.17 M3 of water per day – equivalent to 18 Vats of water per day;
  • Yet LUSI observed no leaks, a plumber’s inspection found no leaks, there was no evidence of a leak, no wet floor, no running water sound and LUSI can’t explain where the water went.
  • WSBC keeps detailed production records including water usage for quality & cost control.  CRA calibration is required for excise tax yet two CRA audits at this location passed with no issues
  • WSBC records match the meter readings when the LUSI meter works correctly.  See graph below.

Usage Comparison

According to Drew, LUSI’s position is:

WSBC must have changed the production process or there must have been a leak; the meter was correct; and “Pay the bill or be disconnected”. So why did it finally come good?  Since readings are currently correct, there’s no way to pin down exactly what the problem was.

Impact on the business

Drew said that because of the overcharging, there were some consequences:

  • Reduced cash needed to run the business
  • Planned products could not be produced
  • Plans were disrupted
  • Revenue decreased
  • Opportunities were lost
  • Management and employees were stressed
  • Business suffered

As a minimum, LUSI has a very unhappy customer and seems not to care.  I’d like to be proved wrong on this.

At worst, they have a problem they cannot explain and have taken advantage of that to the tune of $8,050 plus interest.

See the links below for Drew’s presentation.  He’s asking for Council to direct LUSI to reimburse him.

Links

These are the documents that Drew plans to use in his presentation to Council:

Addendum – 10 August – 10:10am

Update from Drew Macklin

The change from excessive billing to normal came about when the Condenser was changed (not when meter was changed). This meant that interference to the meter was no longer a problem so of course the readings normalized. The idea that the original condenser was using all the extra water was disproved since any water would have been visible: As Drew says: Drain line is exposed and flows to a floor drain. Water would have been spraying all over the place. Drew told me: “There were no floods”.

Additional Update – 12 August 10:12am

From Drew Macklin

To clarify, the Ombudsman has no mandate or authority to recommend a refund so his failure to do so is not relevant.
The Ombudsman’s comment about meter testing is flawed as he did not consider the nature of electrical interference nor understand the meter testing process.
The meter test only tests the meter’s mechanics, not the electronics.
There was no on-site meter testing. The meter was tested after the condenser replacement and the readings had already returned to normal.

Update – Decision 13 August 2019

Drew Macklin
Drew Macklin

At the Council meeting last night, Drew made his presentation and Deputy Mayor Suzanne Seguin moved that LUSI be directed to refund William Street Brewery including interest and within 15 business days as Drew requested.  The motion was approved.

 

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David Macintosh

This is what really happened: Someone at WSBC noticed the high water, checked all the areas where they could hear or see the leak, noticed the drain line, stopped the leak, pulled the drain line out out of the floor (Drew has a picture in his slide showing this floor drain hole), and then WSBC started the process of blaming the utility by getting them to investigate, change or do whatever he claims they did to the meter, after the fact.

Cobourg Person

I suggest you contact councillors with this information.

Canuck Patriot

Your statement is libelous. Hope you’ve got a good lawyer.

David Macintosh

Okay, I’ll correct myself and say this is what could have happened and we will never know.

Heaven forbid if the accusation was reversed. I guess only customers have a voice. This seems like a very one sided presentation. Where’s the utility’s presentation?

Fact Checker

David,
LUSI had every opportunity to present its case and chose not to do so. Perhaps its because LUSI’s own data supports WSBC’s claim. I leave it to you to figure out why they chose this path.

Cobourg Person

How do you know they chose not to do so? The Ombudsman’s report was released in April and Drew Macklin didn’t present until requested by council. Couldn’t Council have done the same for LUSI? I leave it with you to figure out why Council didn’t ask LUSI to present.

Jason Beatty

I had a similar situation when they replaced ours. My residential water bill increased $150 that next month. At first they denied there was any problem but thankfully relented and admitted it was a clerical error. My bills have been fine since.

Damit

I worked as an inspector/technician with Toronto water for over 12 years. I have investigated many high consumption bills. I have seen a family lose their homes over a $7000 dollar bill in East York. In Toronto at least if you don’t pay your water bill it gets added to your property tax. We all know what happens if you don’t pay that. I can only remember one instance that the City refunded money. The determination at that time through the Ombudsman was that the water usage could not be determined. 99% of the time high consumption bills were caused due to a washroom problem. A leaking toilet can cost anywhere from $20 a week to $300-400 a week depending on the type of leak. Now, in the City we switched over a few years ago to AMR (automatic meter reading). Programmed into the system is a red flag alert. If we notice that someone is using 3 times normal consumption we notify them. Now we record every business and home in Toronto every single hour, day and night. I wonder if such a recording device was used in this case. I am assuming it was. Overall meters typically don’t… Read more »

Fact Checker

Damit, WSBC won their appeal to Council and Council directed LUSI to repay WSBC $8K plus $2K in interest: total $10K. I suggest that you read WSBC’s presentation and also the numerous media articles regarding smart meter high readings. The issue is widespread and In many cases the utilities act as a law unto themselve and hold their customers for ransom: pay or be disconnected. You mention that the meters typically fail in the customer’s favour. Based on my reading, this is true. The mechanics of the meter “slow down”: In WSBC’s case, LUSI did have the meter bench tested and found it to be working correctly. The problem is that a bench test only tests the mechanics, not the electronics. You note that 99% of the time the high reading is due to some form of customer fault. I agree that customer fault is frequently the cause. However, Toronto’s data don’t support 99%. The Toronto Star article referenced by WSBC indicates that about 300 out of 1000 complaints are settled in the customer’s favour. As with all things mechanical and electronic, they do fail. The water and electrical utilities have to recognize this fact or governments will act to… Read more »

Damit

The reason why bills increased when smart meters were introduced was due to the meter recording correctly. Hence a massive surge in billing complaints. Old inaccurate meter removed new accurate installed bills increase due to correct volume of water being measured, meter gets the blame. However 300 out of 1000 they must have all been from west of Yonge st. Our dept ran east of Yonge. Trying to get Revenue Services to issue a refund was next to impossible. Even if my report found no error on customer side or reason for spike. Yes we don’t test the electronic side of the meter, however most of the meters in use in Toronto are still analog that are hardwired to a Meter Transmitter unit that simply records what is on the analog dial. I am glad that the business has been paid with interest. However I can assure you that in the dark corners of LUSI they are not in agreement that the meter was at fault. That the payment was made to get heat off of them. I have worked too long with utilities either as a contractor or directly not to know what they are thinking. Lol.

Rationale

I do not believe Factchecker provides value to these discussion as every posting merely repeats information that is already posted or in the material provided.

Frenchy

You might be mixed up as to who is the dupee and who is the duper?
And… are you saying LUSI’s money is taxpayers’ money?

Cobourg Person

I believe what Walter is saying is that the refund to WSB will be adjusted through future water rates. That is, all taxpayers will eventually pay for this adjustment.

Fact Checker

CP,
Why will the refund be adjusted through future water rates? LUSI has been paid for the water that it actually delivered. The refund is on behalf of overbilling for product not delivered but paid for by WSBC under duress

Cobourg Person

The amount billed was based on water that went through the meter. LUSI will now be paid (after the adjustment) for water that WSB “claims they used”. The difference will be made up through future water rates increases to all ratepayers.

Fact Checker

Walter,
How exactly did the Cobourg taxpayers get duped? LUSI did not deliver any product, therefore why should they get paid for it. The interest charged is at the same rate as LUSI charged the WSBC

Damit

In my experience the water was always delivered just not used for intended purpose. It other words it was a leak. Business or home owners never fess up to having a leak. Because what happens normally is client receives a high bill. Checks system, finds leak fixes it then claims there never was a leak. Tenants however were always forthcoming with leak information. “Oh that toilet always made noise, I told the landlord but they never fixed it”. Without seeing all the info and timelines on this case I can’t say what happened. However I can say that almost all electronic meter registers used in Toronto are in large commercial buildings, all of which are in either mechanical or pump rooms. I have never come across a case claiming electronic interference.

Cobourg Person

I don’t understand why Council wouldn’t request Lakefront to present their position and the rationale for not adjusting the account. LUSI management seemed confident with their decision and they were supported by their Board of Directors.

Daisy

Your experience with the Neptune installer might have been good but ours wasn’t. We have an outdoor meter in a “well pit” that LUSI required to be changed. The Neptune man refused to change it, saying “I’m not going down in there”. We never requested our meters to be changed and neither did you or anyone else in this town, so if they want it changed, LUSI should be the one to do it. They are refusing and demand that we rip out our well pit and replace it with a larger one that one of their people can comfortably get into. That cost of close to 9000.00 would be paid not by LUSI but by the condo corporation. The meter worked perfectly but because we refused to spend that kind of money foolishly, LUSI cut off our outdoor water supply and now for the last 2 years we have had to carry water from our units to try and save our plants each summer. The employee from LUSI threatened to increase our monthly bill by 300 % if we didn’t comply, so we came to agreement with them to pay the required monthly service charge of approx. 29.00 but… Read more »

Merry Mary

Aah! When companies and contractors see “condo corporations” they see huge dollar signs of which they attempt to “take advantage.”

Miriam Mutton

Was this meter installed by LUSI or their contractor? On the LUSI web site there is mention of residential and small business customers having water meters replaced by a LUSI contractor. When my home water meter was replaced with a new device I had a period of time to note if there were any irregularities and report it. My experience was that the installer was very professional in their work but the LUSI contractor (Neptune) did provide a review period for the new meter, just in case something went wrong. Why LUSI seems to be acting against their customer WSBC seems odd.

perplexed

Nothing new to some business owners we have several businesses in town over the years – some space we have leased to a Business tenant 1 complaint all of us have was the billing policies –envelopes never had a post mark / date of issue on them and the very next day we would receive a notice of Over due with another charge for late payment and additional interest again no postmark on the envelope yes some of this can be over come if you use E billing and automatic withdrawals . In another situation a commercial tenant from Toronto ran a successful business in town for approx 4 yrs they sold it lock stock and all equipment to a long standing employee & local family subletting the space after operating it for 2 months their business has grown since the 1 st 4 months of take over and they added more equipment to expand and continue to use the existing equipment more than ever and actually added 3000 more sq ft to the operation They have always complained about the Taxes and Utility cost here compared to their operation in Bowmanville The.funny and unexplainable thing though is that since… Read more »

Dave Hughes

Given the Ombudsmen’s report, the utilities positio¦ and that of the brewery, I think the fair thing to do is for the brewery and the utility to accept equal responsibility. Therefore, the utility should credit the brewery for 50 percent of the amount.

Fact Checker

Dave,
I would agree if there was no reasonable explanation as is the case with many of the sudden high reading situations. They are simply “unexplained” as outlined in numerous media articles. In this case there is a reasonable technically sound explanation for the meter’s failure to work correctly in the installed location. As such, LUSI’s can’t provide good “proof of delivery” and therefore is fully responsible.

RATIONALE

If WSBC’s financial records (sales, inventory levels, ingredient purchases) do not support water usage of the high levels shown, then LUSI should drop this matter. The $10M has an enormous impact on small businesses, yet to LUSI it would have no impact.

Fact Checker

Rationale,
Agree that the impact on a small business is significant. However, the amount is $10K not $10M ……Huge difference

RATIONALE

M is the Roman numeral for 1,000. This was the context it was used.

Fact Checker

Agree. However, the financial nomenclature for 1,000 is “K”

Cobourg Person

Hi John,

It might be beneficial to include a link to the Ombudsman report on the William Street Beer issue that was included in the April 23, 2019 COW meeting.

https://cobourg.civicweb.net/Portal/MeetingInformation.aspx?Id=1866

It seems relevant because the Ombudsman does not recommend a credit to William Street Beer. Further, the Ombudsman’s report states ” The fact that the meter was checked to determine accuracy in May2018 and re-installed in June 2018 in the exact same location resulting in accurate meter readings is persuasive evidence in favour of the position taken by Lakefront Utility Services Inc.”

Fact Checker

Cobourg Person,
Several points:
The ombudsman didn’t direct a refund because the Ombudsman didn’t have a mandate or the authority to do so, as stated in the report.
As noted on slide 10: LUSI did not test the meter on site
It is quite possible for electronics to malfunction when in proximity to a strong electrical interference field and yet perform well when removed from that site as noted on slide 12.
As indicated on slides 15 & 20, the meter was tested in May, after the cooler was upgraded and the meter readings had “normalized”
I also suggest that you do some research on how water meters are tested. You will find that only the mechanics of the meter are tested, not the electronics. As the issue is electrical interference affecting the meter, LUSI’s test provides no proof of proper operation.

Cobourg Person

But the meter was removed, tested, and then reinstalled in the exact same location. Therefore wouldn’t the meter continue to have high readings?

Fact Checker

Your missing the electrical interference effect on the meter due to proximity to the old cooler equipment. This equipment was upgraded in late April. Shortly thereafter, the meter readings normalized as shown in slide 15. LUSI tested the meter in May after the cooler equipment was upgraded and meter operation had returned to “normal”

Cobourg Person

What’s the definition of “proximity”? Sounds like a weasel word.

Fact Checker

CP,
From the slide 13 picture, it appears to be about 5 ft. Generally, it likely depends on the size/power of the motor and the nature/construction of the electronic equipment

george taylor

Great way to drive yet another small business out of Cobourg?

Doug Lawrence

Anyone, but the utility, can reason that something is wrong with this situaton. But the utility has the upperhand and can choose to do nothing. Be nice if the town could act to come to come to a reasonable solution, maybe stick up for small business.

gerinator

Same old, same old – Guilty until proven innocent; oh and that’s only if you don’t go bankrupt in the meantime.

Merry Mary

This tragedy is suspiciously familiar to a period of unexplained excessive hydro usage that we and our residential neighbours experienced in January and February 2016!