Coast Electric reversed a controversial decision on Thursday and will no longer force customers to pay hundreds of dollars after the cooperative mistakenly undercharged some bills , the co-op said.
Coast Electric mailed letters to about 4,500 customers this week that said the co-op had accidentally underbilled their accounts from January through August 23.
For nearly eight months, those customers were charged 41 cents per kWh when they should have been billed 87 cents per kWh, the letters said.
Customers reported the difference often totaled $400 or more. Coast Electric first said the amount would be added to October bills. But on Thursday, Coast Electric said its initial choice to charge customers for the error “was the wrong course of action.”
“We will not be adding these charges to our members’ bill,” April Lollar, the electric cooperative’s director of communications, said in a news release. “This was our mistake, so we will find other ways to reduce expenses to make up the difference.”
Coast Electric did not immediately specify how it would reduce other expenses to account for the cost. But Lollar said the decision “will not cause changes to rates, operations or reliability.”
Coast Electric and Public Service Commissioner Wayne Carr said the mistake was a human error on the back-end of the co-op’s billing system.
Coast Electric said it has since corrected the rate and customers are being billed correctly. Lollar also said Coast Electric added “checks and balances,” including extra reviews each time the co-op updates rates in its system, to prevent similar errors.
Coast Electric is a member-owner cooperative that serves 90,000 accounts across Harrison, Hancock and Pearl River counties. The co-op said it originally chose to collect the money only from impacted customers because it did not want thousands of other members to pay for an error that did not affect them.
The decision led to outcry. The Public Service Commission had received over 125 complaints from frustrated customers by Wednesday, said Caroline Tibbs, a public affairs representative for the Southern District Commissioner. She also said the impacted group included new members who began using Coast Electric in January.
Carr said it was was the first time he had heard of customers being billed for an internal error at large scale. He pointed to a 2019 Mississippi Supreme Court decision that ruled in favor of the Alcorn County Electric Power Association, which mistakenly undercharged a north Mississippi business for six years before it realized its mistake and sought to recover the money. The Court forced the business to pay back more than $25,000.
Coast Electric said Thursday it had listened to the concerns of its customers, who are members and owners in the cooperative. It apologized for the “inconvenience and hardship” it said the decision had caused.
“We have the best interest of our members at heart,” the co-op’s statement said. “When we make a mistake, we are willing to admit our mistake and change course. We have a strong record of being advocates for our members, and we hope the decision to forgive this debt will serve as proof.”
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