A local electric utility is claiming that the Craftsbury School District owes it nearly $145,000 in charges that have piled up over the last decade.
The Town of Hardwick Electric Department, which serves over 4,300 customers in 11 towns, says faulty equipment led to Craftsbury Schools being undercharged for power beginning in 2010. The unpaid bill reached $144,000 before the snafu was noticed last year. On March 2 the utility delivered a disconnection notice to the school district, threatening to turn off the lights if the money wasn’t paid within two weeks or a long-term payment plan wasn’t implemented.
“This is a matter of fairness,” Hardwick Electric General Manager Mike Sullivan said. “Hardwick Electric is simply asking Craftsbury Academy to pay for the electricity they used for nearly 10 years.”
Craftsbury school officials say they paid their bill on time, every time, and any problem with power not being paid for lies with the utility.
“It pisses me off. It’s not right, we didn’t make any mistakes and it’s not our fault,” Craftsbury School Board Chair Harry Miller said. “They’ve been reading the meter for nine years. Reading it wrong, not catching it, to me that means mismanagement.”
“We thought we were paying on time,” said Adam Rosenberg, Orleans Southwest superintendent. “It’s unreasonable to get hit with such a big bill for an oversight on the company’s part when we did nothing wrong.”
Since the error was discovered, Craftsbury has been paying the proper amount on its monthly bills, Rosenberg said, but an offer in January by the school district to settle the matter for $20,000 was rejected by the utility.
On March 11, 10 days after receiving the disconnection notice from Hardwick Electric, the school district filed a complaint about the matter with the Vermont Public Utility Commission, which oversees and supervises electric rates and financial management for utilities in the state. The commission has since held a status conference on the matter on June 10; Craftsbury school officials were not invited to that conference, Rosenberg said.
Now, the school district and utility await a final decision by the Public Utility Commission.
A decade-old problem
The decade-old issue with measuring electricity at Craftsbury Academy was discovered last year, according to the school’s facilities director, Ryan Bjerke. Last May, he began looking in to getting a generator for the school, which is also the local emergency management shelter, and while determining what size generator to get he asked for input from Hardwick Electric on electricity usage at the school. That’s when utility staff discovered the issue.
Bjerke explained that in 2010, as the major rebuild of the older portion of the Craftsbury Academy building was wrapping up, equipment that monitored electricity usage in that building was installed improperly.
“It was installed backwards,” Bjerke said.
Hardwick Electric said that from 2010 to 2019, Craftsbury Academy was paying for only 15-percent of the electricity it used.
“We were shocked,” Miller said about the discovery.
Bjerke’s only been at Craftsbury since 2018, but he did some digging into who installed the faulty equipment.
“Everyone’s recollection was Hardwick Electric was the one who put it in wrong,” he said.
After discovering the error the utility came back to the school and sought $200,000 in back electric bills, Bjerke said. He reached out to the Vermont Public Service Board soon after, which recommended installing a new meter on the building to get an accurate read on how much electricity is being used.
After a few months of collecting data from the new meter, utility staff told the school between $139,000 and $145,000 was owed.
“We still thought that was crazy,” Miller said. “We paid our bill every month just like we’re supposed to. We’re not just sitting on $145,000. If we were we would be using it for other things. We don’t have that money.”
Bjerke said the current electric bill for that recently-renovated Academy building — the school has a second building on a different meter at Craftsbury Academy as well as an elementary school on another campus — is roughly $1,800 a month. Before the error was discovered the bill for the building averaged about $800.
“We want to pay them for what we are using,” Bjerke said, even though that extra $1,000 a month wasn’t budgeted for the fiscal year that just ended.
No middle ground
Hardwick Electric says its requests for Craftsbury to repay the money are in line with both state law and similar situations that have happened in Vermont. In a June 29 letter, the Hardwick Electric Board of Commissioners said that “we have been disappointed by Craftsbury Academy’s response to our requests that they pay for the electricity they used.”
Hardwick is not a for-profit utility, its board of directors wrote, and it does not have shareholders to cover unforeseen or additional costs. Its regular ratepayers have “been covering the cost of Craftsbury Academy’s electric use for almost 10 years. That is not fair to our ratepayers.”
The utility has offered a repayment plan that included no interest over a 10-year period, which the school rejected.
Rosenberg said that even a repayment plan like that spread out over a decade could put a serious strain on the school budget.
Rosenberg said he thinks the school board’s January offer to pay back $20,000 over three months “was an equitable figure given the circumstances.”
The school board’s legal team claims that any fault in measuring the amount of electricity used at Craftsbury Academy lies completely with Hardwick Electric.
“Apparently, the mistake in establishing the service was compounded when nobody at HED (Hardwick Electric Department) ever realized the defective installation, despite the fact that month after month the amounts paid were far less than comparable customers,” the January letter from the school to the utility stated.
The school district also cites Vermont’s statute of limitations, which they think could limit Hardwick’s ability to seek the lost revenue because the installation error was made so many years ago and went unnoticed for so long.
Miller said that after Hardwick Electric rejected the school’s offer to pay $20,000 it also rejected the idea of meeting with a mediator.
“We made them an offer, they could have taken it and been done with it,” Miller said. “I just find it hard to believe they can do what they are doing.”
The March 2 disconnection notice sent to the school by the utility stated that $143,928 had to be paid no later than March 16, or the power to the school would be cut.
Last month, the school board released a letter explaining the situation to the public.
“The Craftsbury School Board is deeply disappointed by HED’s actions,” the letter states. “The taxpayers in Craftsbury should not be held financially responsible for HED’s errors.”
Taking the matter public drew the June 29 response from the electric utility’s own board.
“Unfortunately, rather than coming to an agreement on a reasonable and fair payment plan to cover the cost of the electricity used, after the Department of Public Service agreed with Hardwick Electric’s position in this matter, Craftsbury Academy instead chose to ignore Hardwick Electric’s further communications and spread misinformation on social media and in the press,” the letter stated.
“While we understand that having to begin to pay for such a large amount of electricity is not something anyone wants to do, it is a matter of fairness,” the Hardwick board wrote. “It is our hope that Craftsbury Academy will now do the right thing and pay for the electricity they used for nearly a decade.”