Churches and businesses seek refunds from Duke Energy

Duke Energy Florida acknowledges that some business customers — including churches — have been paying higher rates than necessary for years.

However, the electric company has refused to refund the amount those customers over-paid.

Duke's resistance has prompted almost two-dozen complaints to the state Public Service Commission within the last week as small businesses and churches fight to reclaim tens of thousands of dollars they say are due them.

Leaders at First Baptist Church of St. Petersburg on Gandy Boulevard realized Duke charged them a higher rate than necessary nine months ago after reading reports in the Tampa Bay Times about how the utility kept churches and other businesses on high rates when there were less expensive options.

First Baptist, with a 1,500-seat sanctuary and 105,000 square feet of facilities, contacted Duke about the rate and the utility changed it. The change lowered the church's electric bill — which runs about $170,000 a year — by 15 percent.

But First Baptist filed a complaint last week after Duke refused to refund more than $20,000 that the church says it is owed in overpayments. The church also says Duke owes an additional $17,000 for a second account, and the church plans to file a complaint for that one as well.

"This is money that has come from families in the community who come here to worship," said the Rev. Philip Lilly, executive pastor at First Baptist. "It's sad and disappointing that a company does this."

JC Ryan, a partner and chief operating officer at Berstein Ryan, LLC, which operates Image First laundry in Pinellas Park, also filed a complaint last week over a refund of almost $2,400 after months of being charged the wrong rate. Ryan told the Times that after Image First was put on the correct rate, the company saw its electric bill drop $700 to $800 a month, a 10 percent savings.

But now Image First wants a refund.

Ryan pointed to e-mail exchanges with Duke in which the utility acknowledged changing to a lower rate but refused to refund him.

In one e-mail, the utility stated:

We honored your 06/20/14 email request to change the rate from 70 to rate 50.

No other adjustments will be made to this account.

"I have over 1,000 customers who depend on me to bill them correctly," Ryan said. "It's frustrating that I can't be treated the way I treat my own customers."

The list of complainants also includes the Poynter Institute, owner of the Times, which is seeking almost $9,000 in refunds.

The refunds sought in the complaints total $71,150.

Suzanne Grant, a Duke Energy spokeswoman, said the utility sends out annual notices to business and commercial customers to notify them of all the rates and encourages those that want a change to request a rate review.

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"The bottom line is we want our customers to be on the rate plan that best meets their unique business needs," Grant said. "We will do a review of any business account if the customer feels their electricity usage and needs have changed or will change.

"It is necessary for the customer to contact us to switch to a different rate plan," she said. "We do not switch customers to different discretionary rate plans without their authorization."

State lawmakers passed a measure in the last legislative session that requires utilities to notify each customer of all available rates and to make a good faith effort to find the best rate. It is awaiting the governor's signature.

That legislation followed reports in the Times that showed that Duke did not give business customers the most advantageous rate. Unlike residential customers, businesses have multiple rate tiers.

The legislation specifically targeted Duke Energy because other large investor-owned utilities have worked to find customers the best rate.

Tampa Electric, for instance, automatically switches its commercial customers to their best rate. And for churches in particular, the utility ensures the religious institutions get an appropriate rate for facilities that might operate just one or two days a week.

After learning that Duke is not refunding money from the higher charges, Rep. Dwight Dudley, D-St. Petersburg, said the utility needs to reconsider its public relations strategies.

"I think it's despicable," Dudley said. "I think it highlights the single-mindedness of their pursuit of money from consumers, especially when you're considering who these people are. You're talking about churches. You're talking about the backbone of our community."

Nine of the 13 complainants are churches.

After reading the reports about the difference in rates, several churches began reviewing their electric bills, including First Baptist Church of St. Petersburg, only to discover that they were paying thousands of dollars more than they should.

Mike Handley, a former Florida Power employee who now runs his own business as an electric utility bill analyst, reviews bills for businesses to help them determine whether they could save money.

He only charges the businesses if he finds a savings. Then he splits the savings or refund 50/50 with the company.

Handley said until March or April of 2014, Duke had been refunding customers the difference.

"Then they stopped," said Handley, who has been filing the complaints to the PSC through his business. "That led me to let it go until I had enough for the PSC to see a pattern. When you file 20 or 25 at once, the PSC can see a pattern because it's clear."

Lilly, the executive pastor at First Baptist Church of St. Petersburg, said Duke should do right by its customers.

"They literally and figuratively need to bite the bullet on this one," he said.

Contact Ivan Penn at ipenn@tampabay.com or (727) 892-2332. Follow @Consumers_Edge.