Looking to get the state's financial house in order, Gov. David A. Paterson mandated in 2009 that every New York State agency have its gas and electric bills audited to be sure they were being billed correctly. The state chose Troy & Banks to get the job done.

So far, the 20-year-old Buffalo auditing company has found plenty of mistakes and has recouped hundreds of thousands of dollars in overcharges for state agencies.

"In my experience, three out of four accounts have some kind of erroneous billing issue," said Justin Raybeck, vice president of utility auditing and energy services for the company.

Earlier this year, the company's audit found National Grid had been billing the University at Buffalo at the wrong rate -- and had been since the account was established. Since the statute of limitations for overcharge refunds is six years, it sent a letter to the electric company requesting a $66,571 refund for six years of back payment, including interest.

National Grid responded saying it had done some homework of its own.

It agreed it had billed the university incorrectly, but insisted it had charged the school at a more favorable rate than it deserved. Since UB made out in the deal, National Grid maintained, it wouldn't be issuing a refund.

"I went back and looked further, because I knew that couldn't be the case," said Raybeck, who conducted that audit. "I went back and it turned out there was no way the rate they had been charged was better. The rate was incorrect and it was costing them money."

Eventually, National Grid agreed and, about a month and a half later, the auditor got a refund notification for the full amount. The company also recovered another $17,000 for UB from the utility company -- $5,000 of it for an incorrect meter reading, the other $12,000 was for a separate line set at an incorrect rate, which National Grid caught and corrected on its own a short time later without issuing a refund.

The Western New York District of the New York State Office for People with Developmental Disabilities was overcharged to the tune of $11,338 by National Fuel and another roughly $10,000 by National Grid. Under the state's mental hygiene law, the OPWDD qualified for residential rate billing but was instead charged at the higher commercial rate.

"That actually happens a lot," said Raybeck.

In fact, there is a lot that can go wrong when it comes to utility billing.

Numbers get transposed. Taxes get misapplied. Exemptions are missed. Rates and rules change. Meters malfunction. Accounts get set at the wrong rate.

"It's not uncommon for customers to be charged for accounts they canceled years ago. I've seen customers charged for lines that don't even exist anymore," said Thomas Ranallo, the consulting firm's president.

And without a lot of research, access and knowledge about things such as utility tariffs, overcharges can be hard to spot. "We do in fact conduct our own physical and paper audits of our billing practices as well as our customer accounts, both billing and residential," said Stephen F. Brady, a spokesman for National Grid. "But we have 1.6 million electric customers in upstate New York. It's just not practical to audit every single customer every single time."

National Fuel said it conducts ongoing internal audits as well. "As a result of this internal review process, National Fuel representatives have identified and corrected billings in which the customer paid more than the most beneficial rate based on incomplete or inaccurate customer information," said Karen Merkel, a spokeswoman for National Fuel.

Under the state's contract, the auditing firm receives sliding scale fees from 39 percent for $20,000 of monetary refunds to 25 percent for $100,001 and above. As with all of the company's clients, there is no fee if overcharges aren't found.

Outside of the state mandates, individual municipalities also contract Troy & Banks to audit streetlight usage and the payment of franchise fees from cable companies. Streetlight usage can account for up to 40 percent of a town's utility bill. Auditors reconcile bills and usage and do physical inventories of things such as wattage settings.

It found $2.1 million in streetlight overages for the City of Buffalo, $150,000 for the Town of Cheektowaga and $215,000 for the Town of Amherst.

The franchise fee audits check to make sure municipalities are paid full franchise fees by cable companies who use and occupy public property. The audits have shown cable companies regularly underpay franchise fees. One example is Time Warner Cable, which underpaid Ithaca by $50,000.

Telecommunication providers often get it wrong, too. Monroe's BOCES program was overcharged $20,000 by Frontier Communications. Batavia City School District overpaid $7,000 to One Communications.

And overbilling doesn't just happen to schools and government agencies. The company has more than 7,000 clients, including the New York Stock Exchange (for which it recovered $100,000), Amtrak (it caught $1.1 million), M&T Bank (another $1.1 million) and the U.S. Postal Service ($400,000).

Catholic Charities of Syracuse overpaid $190,884.33 to National Grid; Upstate New York Transplant Services paid them $30,000.

schristmann@buffnews.comnull