Savings Potential &13,724,945.00
I have heard there are an enormous amount of meter cans handed out each year. I have also heard the actual number of new services is only about 2/3 of the total number of meter cans handed out. Research shows an average of nearly 71,000 meter cans were handed during 2002, 2003 and 2004. I don't know exact figures for new constructions and/or replacements each year, but I have heard they number around 45-50 thousand annually.
The problem is, anything that's handed free of charge, such as the meter cans, (from
Monroeto Cass Cityfrom to Howell), always seems to generate abuses. I haven't devoted a lot of time thinking about, investigating or discussing this problem and related issues, but I'm sure a quick inquiry around the Company would uncover many other abuses that have not come to my attention. East Detroit
Below are the abuses that have come to my attention, which are also some reasons why I think the excessive number of cans we hand out may be so high and some possible solutions.
The meter cans are handed out at no charge and few installation addresses are collected to verify validity or need. The
method by which they are handed out isn't conducive to collection and verify addresses.
Our western boundary is in close proximity to Consumers Power and it's likely their contractors may come into our area, acquire our meter cans and install them in consumers service area. Even if they gave us a correct address, many wouldn't wouldn't know whether or not it's in our service area, and fewer still would check, and fewer still would be able to check.
The same is true in the south where we share borders with
utility. We probably have numerous meter cans end up south of the state line in installations there. Ohio
The same is true in our northern fringes, where contractors of utilities in close proximity to us may be tapping into our meter can program and using our meter cans for installations elsewhere.
Additional DTE meter cans may be ending up on the shelves of local construction and electrical suppliers. All a contractor
has to do is have a need for some cash, and an unscrupulous electrical supplier in need of stock. As a general rule we
hand out as many boxes of meter cans as our customers say they need, and the rest is history.
I was discussing this problem at
on April 3rd. and was told of a gentleman who came by the Service Center with a pick up truck load of meter cans. He said he recently bought an abandoned house from the city and the meter cans were inside. He said his initial thoughts were to take them to the scrap yard, but considering they were new in boxes they likely belonged to somebody and his first thought was DTE, so he brought them to our door. Pontiac Service Center
I personally talked to a DTE Stores employee who had a contractor install a meter can at his house and then tried to
charge him for the can. This is an employee who hands out meter cans to the contractors and knows the process. If they're trying to charge DTE employees for the cans they get free, they're definitely charging the unsuspecting public. If the
Contractor is charging the public for the same can DTE is providing free of charge maybe we should explore methods to
end this charade.
While discussing the above with another Union member she told me she heard heard a rumor the meters/meter cans have
also ended up on Ebay along with DTE logo.
One thing is certain, we need to try and get better control of the situation and do all we can to control abuse and rein in costs. There may be some limitations imposed by the MPSC, regarding meters cans being considered included in the rate base, and if so, maybe someone at DTE needs to try and change DTE’s awkward relationship with the MPSC and attempt to get them to understand the current system and it's inherent problems and abuses, as well as face the fact that many DTE customers are likely being charged anyway.
The $23.67 average cost of the meter cans are minimal in relation to the high cost of new homes. It's likely some contractors are charging this or more for meter cans they get free. Below I have outlined some ideas we might be able implement and control the costs & abuse and make a difference to our bottom line.
First, we need control who gets meter cans, how many they get and establish more stringent criteria for contractors to acquire them.
Second, we need develop legal methodology for charging the customer at least minimally for the cost of the meter cans in order to eliminate abuse ($23.67 average). As I mentioned earlier, the full cost of the meter cans are small when compared to the high costs of new homes.
Most meter cans range in price from less than $15.00 to just under $160.00 dollars. From 2002 through 2004 there were over 212,000 cans handed out, or an average of 70,700 a year. The average annual cost was $1,547,116.33, or 21.85 per unit a year plus $128,317.22 for jumpers & service bolts adding another $1.81 per unit. This doesn't include the other hardware like knockouts and locks etc. The known total average for the cans, jumpers & service bolts for that time period was $1,675,433.55. Add a low estimate figure for locks, knockouts and other hardware of $4,566.45 to round out the figures, we have an estimate of $1,680,000.00 annually.
By establishing a charge for the actual to the cost of the meter cans, we could eliminate a lot of the waste and abuse and bring the actual number of cans back into sync with actual number of new constructions and replacements. (45-50 thousand?) We would still provide replacements free of charge.
We could avoid spending an un-returnable $1,680,000.00 annually. We would have the potential to generate $1,064,989.09 in return for actual costs for an estimated 45,000 cans.
By eliminating the $1,680,000.00 in lost annual expenditures associated with purchase of the meter cans, and generate $1,064,989.09 in return, it could make a difference of $2,744.989.00 annually to DTE’s bottom line, or $13,724,945.00 over 5 years. The cost of the unaccounted hardware items should drop in relation to cessation of abuse, thus making the difference to the bottom line even greater than the above figure indicates.
The prices used to estimate costs may be outdated as they appear to be the same prices we’ve been using for years. If the actual prices are higher, that will increase all figures and costs.
The biggest stumbling block here seems to be the MPSC and DTE's willingness to put an end to the abuse. Armed with the right information, in the hands of the right DTE representative, and a renewed interest in developing a good working relationship with the MPSC, we might be able to solve this multi-million dollar problem.
This page originally uploaded 05/03/06. Last revised on 07/08/06
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