September 29, 2014
A whistleblower lawsuit was recently filed against Tennessee’s energy utility EPB, accusing them of violating Tennessee’s False Claims Act. The suit claims the contractor intentionally overbilled Chattanooga and the city’s taxpayers for the cost of 46,000 streetlights.
The plaintiff is seeking more than $10 million in damages, claiming the city was overbilled at a rate of approximately 27%. The suit was filed on July 3, 2014 by Don Lepard on behalf of the city of Chattanooga and the state of Tennessee. Lepard is the owner of Global Green Lighting and is a former contractor for the city. In the past, he replaced a third of the lights with LED models. Lepard began to question the most recent arrangement when the city failed to renew his contract for the additional replacements.
Additionally, EPB admittedly has previous issues with billing and record keeping systems. In the past the problems caused the utility to erroneously charge city taxpayers to power thousands of lights they had removed and replaced with newer, more efficient lights. EPB defends its acts by claiming it overcharged the city for energy use, but it under-billed for some of the replacement costs of lights that were installed but not charged to the city.
Lepard claims to have told EPB about the problem in 2011 and believes the utility began altering its books instead of reimbursing the city for the error. He also states that it was not until media began to highlight the problems and the mayor of Chattanooga took action, ordering the utility to get things in order that they publicly admitted the error.
Once EPB acknowledge the overbilling had occurred, they commissioned an independent firm to audit their books and offered to pay for any overages that were found. Gradually the utility is admitting some of Lepard’s claims are true. In spite of these efforts, the utility has introduced its own claims they believe offset the price of overbilling.
Lepard Discovered the Billing Errors by Accident
Lepard’s relationship with EPB began in 2011 when he was hired to replace lights at the city’s CoolidgePark with more efficient LED lights. Lepard was then contacted again to replace 27,000 streetlights. He claimed the savings in power of the more efficient lights were based on EPBs existing light system, but found those lights were not the ones officially listed. His goal was to understand the billing and power consumption to show his system as superior when he stumbled into the realization EPB might be falsifying information. Lepard began storing the old lights, so he would later be able to prove his suspicions that EPB had been billing the city for higher wattage lights than what they were using.
He confronted the city and EPB officials with his findings and later claimed that EPB was discreetly changing the billing data. He believes they were reporting significant changes in the lights for which billing was made. The utility was questioned about their actions, but officials stated they were not aware of the extent of the issue when they originally denied that they were overbilling for the lights.
According to John Pless, spokesman for EPB, “Our original assertion was based on how our processes were supposed to be working. This is a very complex analysis with many variables. We are providing the city with the information they need to resolve this complex issue and we will comply with their determination.”
A second similar lawsuit, filed on behalf of the cities of Red Bank and East Ridge and their taxpayers was filed by Lepard on July 23, 2014. The second suit claims EPB overcharged the cities of Red Bank and East Ridge for energy charges on its monthly billing for the lighting systems due to bills reflecting charges for lights that had not existed for as long as two decades.