Florida Power & Light sent customers in North Miami a letter earlier this month saying they'd be credited for years of overbilling.
Florida Power & Light sent customers in North Miami a letter earlier this month saying they'd be credited for years of overbilling.

FPL Customers in North Miami Were Overtaxed $2 Million for Nearly 20 Years

When North Miami residents received their power bills earlier this month, their statements came with a welcome surprise: Florida Power & Light was issuing a special credit to all households within city limits.

But the news isn't all good. It turns out the utility company has been accidentally overcharging customers in Miami-Dade's sixth largest city for nearly 20 years. Because of a billing error, residents of the working-class, largely Haitian city have been overtaxed by an estimated $2 million since 1998. The bulk of that money will never be repaid to account holders thanks to the state's statute of limitations.

One customer says she was stunned when she received a letter from FPL earlier this month explaining the overbilling.

"FPL is very sketchy," says Diane, who asked New Times to withhold her last name because she fears retaliation. "How many years have you guys been overcharging us?"

The company says the error was discovered in a "routine review" of its billing system before Hurricane Irma hit Florida. Because of a change in the city's tax code, auditors noticed an extra 1 cent to 41 cents had been inadvertently tacked onto customers' monthly statements for almost two decades.

"We do realize it was a mistake, and we want to correct it as soon as possible," says Florencia Contesse, an FPL spokesperson.

The overbilling — which is freakishly reminiscent of the penny scheme in the 1999 film Office Space — was apparently due to miscommunication between the city and FPL over something called a municipal tax. When utilities bill customers, the state allows local governments to add a sales tax. The utility collects that money and returns it to local governments.

In North Miami, the tax on residents' utility bills has long been 10 percent, but in 1997, the city commission voted to give residents a small break. Commissioners approved lifting the tax on the first 50 kilowatt hours of energy used per month.

For the average customer, that should have cut about 50 cents from a monthly power bill. But when the ordinance went into effect in 1998, no one from the city told FPL the tax had been reduced, the company says, so it continued charging customers the same amount.

"As part of how we work with the municipalities, they're responsible for getting us their updated tax ordinance," Contesse says. "We were sort of operating in collections, if you will, based on what we had on file."

FPL says its internal review revealed the same issue occurred in Palm Beach. More than 11,000 customers in the upscale waterfront community were overcharged for nearly 40 years because, the company contends, it wasn't made aware that the town's tax code had been amended in 1978. (Palm Beach Town Manager Thomas Bradford was not available to discuss the issue with New Times this week.)

North Miami spokeswoman Eunicia Baker says it's difficult to know whether city staff sent a copy of the updated tax code to FPL in 1998, although more recent records show correspondence with FPL about the tax roughly every two years. Contesse says ensuring customers in each city are billed correctly is a "shared responsibility," but city Councilman Scott Galvin says it would have been difficult for the city to know residents were being overcharged without access to FPL's financial statements.

"We never realized it was happening because we don't have insight into their books," Galvin says.

Neither the city nor FPL was able to provide the total amount that was erroneously collected in North Miami, but based on an average of 20 cents per month that was mistakenly charged to the city's 45,000 customers, it can be estimated residents were overtaxed by a total of $2.13 million since 1998.

Florida's statute of limitations limits liability in such cases to three years, though. So only an estimated $324,000 will be paid back. The city will hold onto 85 percent of the money — $1.8 million for employee salaries and other city operating costs.

Though the credits on October's bill can be difficult to decipher, FPL says the average customer in North Miami received about $13.

For some residents, the gesture is too little, too late. "I don't want any credit," says Diane, a longtime customer who says she pays her bills on time every month. "Just cut me a check like I've been cutting you a check this whole time."

Customers who would rather have a refund than a credit to their accounts can call FPL at 800-226-3545 weekdays from 9 a.m. to 5 p.m. Customers who have closed their accounts or moved out of North Miami without opening another FPL account should also call to make sure their refund checks are sent to the correct address. Here's a full copy of the letter sent to account holders:

FPL Customers in North Miami Were Overtaxed $2 Million for Nearly 20 Years
Courtesy photo

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