Huntingburg to pay Farbest nearly $484,000

The City of Huntingburg will pay Farbest Foods $483,540.14 for overages the city billed the company for its natural gas usage.

The city determined they had been overcharging the company due to an issue with a meter and the protocol the city uses to determine customers’ bills.

According to John Rutepolher, energy superintendent, the meter to the Farbest Food plant was replaced and when it was replaced, the city mistakenly applied a multiplier. This occurred in March of 2011.

A multiplier is used to track usage for industrial customers when the meter’s tracker doesn’t have the capacity to record the correct amounts. According to Rutepholer, the meter will measure ten units of gas passing through the line as a single unit. So, the city adds a multiplier of ten to correct the reading.

In the case of Farbest Foods, the meter was upgraded but the original multiplier was reapplied to the account creating an average of 34 percent in overages each month.

The excessive charges weren’t caught by the company when the new meter was installed because it happened in the winter when gas usage was already escalated.

The city realized there was an issue as they tracked the gas sales compared to the gas the city purchased. According to city attorney Phil Schneider, each month the city sold about 1 to 2 percent more gas than it bought.  They thought it was a problem with the gas storage field.

With the storage field no longer being utilized, Rutepolher was able to track down the discrepancy with Farbest.

The common council approved paying Farbest Foods back the amount of overages it had collected.

According to Mayor Denny Spinner, the payment to Farbest does not affect the department’s budget and it will have no impact on customers’ gas rates. Through the process, the gas department developed a policy for dealing with the multipliers used for utility customers to ensure a similar mistake did not occur again.