Back-Billing by PG&E—There are Limits!

Slammed by an unexpected huge electric bill? It could be a billing error, and electric companies can only bill residential customers for a period of three months.

Dear Consumer Advisor,
One year ago, I moved into a new apartment and opened an account with PG&E for electricity and gas service. I did not receive any bills from PG&E for the entire year, and thought that my landlord must be taking care of it. A couple weeks ago, I received a letter from PG&E claiming that I owe them $1200 for the entire year! I am willing to pay for energy that I used, but I don’t think it’s fair that due to a mistake by PG&E, I now have to pay such a large sum of money. If I had gotten billed monthly, as is supposed to happen, I could have monitored my electricity and gas usage more carefully and I would have known what I was spending. PG&E has given me 12 months—the same amount of time I did not get billed—to pay the $1200, but this would be on top of current charges. This would basically double my bill.I can’t afford this, and also think it’s simply not fair that I am being penalized for a mistake made by PG&E. HELP!

Innocent Ratepayer

Dear Innocent Ratepayer,
It looks like PG&E is trying to unfairly shake you down. Unfortunately, this happens all the time! Consumers are undercharged for weeks, months, or even years without their knowledge and then, all off a sudden, slapped with a bill demanding a huge amount of money that must be paid within a certain amount of time or service will be shut off.

How much you will have to pay depends on whether the mistake is a “billing error, “meter error” or “unauthorized use.” The distinction is an important one.

If a residential customer is undercharged due to a billing or meter error, the utility may bill the customer for the amount of the undercharge for a period of three months. (The rules are different for non-residential service, but TURN won similar protections for small businesses that we have defended for residential customers.)

“Billing error” can include incorrect meter reads, clerical errors, incorrect billing calculations and wrong daily billing factor, among other things. “Meter error” relates to non-registering or incorrectly registering meters, which result in a slow meter and, thus, undercharges to the residential customer.

It is common in situations like yours for the utility to claim that the undercharge was not due to a “billing error” or “meter error,” but to “unauthorized use,” in which case the utility may backbill for the full period for which the undercharging occurred. “Unauthorized use” includes unmetered use of electricity resulting from unauthorized connections and alterations to electric supply lines or electric and gas meters or installation of an unauthorized electric or gas meter in place of the meter assigned to the account, and other methods of obtaining unmetered electricity.

In your case, PG&E is backbilling you for 12 months despite your assertion that you were not billed for the 12 months, and this constitutes a “billing error”, which would mean you can only be back-billed for three months. Or, if PG&E is correct, you may have some issues to resolve with your landlord! If PG&E is not willing to negotiate with you, you will need to file an informal complaint at the CPUC, with which I can assist you.

As to repayment of whatever you owe, the repayment schedule is subject to negotiation. Don’t let them force you to pay back charges in an unreasonable time frame. Otherwise, you might just get behind and have to face another shut-off threat.

Download our fact sheet on back-billing:
Small Business Protections English
Small Business Protections Spanish