Rate misclassification
Rate misclassification is billing a utility account under a rate schedule that does not match its actual load, usage pattern, service voltage or facility type. It is the most common source of large recoveries in Discovery's audits, because the error repeats on every bill until someone reclassifies the account.
How it happens
- A plant expands, adds equipment or changes shifts, and its load outgrows its original class.
- A site is acquired and its accounts are never reviewed.
- The utility restructures its rates and maps accounts to new schedules imperfectly.
- A commercial class is applied where an industrial or large-volume class is available.
How to spot it
Find the rate code on the bill, look up that schedule's eligibility criteria in the utility's tariff, and compare them with the account's demand, usage and service voltage. Then check whether another schedule the account qualifies for would cost less across a full year of usage.
What it looks like in practice
At a national steel company, 17 accounts in 7 states were on the wrong class. A San Antonio gas account moved from Schedule G to large-volume Schedule LVG saves $33,553.97 a year. Total refunds: $374,326.20. At an agribusiness, reclassifying two sites cut their rates by an average of 38% and 31%.
Questions buyers ask
What is utility rate-class verification?
Confirming that a commercial or industrial account is billed under the correct rate schedule for its actual load profile, usage pattern and facility type, using the eligibility criteria in the utility's own tariff.
Will the utility move us automatically when our load changes?
Usually not. Utilities rarely reclassify accounts proactively, so classes set years ago persist after expansions, equipment changes or shifts in operating hours.
Is a misclassification refundable?
Often, for the recoverable period the state and utility allow, plus lower bills from the corrected class going forward. Eligibility and savings depend on the account's actual usage and the tariff's rules.
Find out what your bills should have cost.
Send one recent bill per site, or a list of accounts. We tell you where we expect findings before you sign anything. No upfront audit fee.