Cannabis cultivators or distributors often use large amounts of electricity, water and/or natural gas. Like other commercial or industrial customers, cannabis businesses may occasionally receive large utility “backbills,” which can total tens or even hundreds of thousands of dollars.
A “backbill” is any bill for electricity, water or gas delivered before the current monthly billing cycle. In the most common scenario, a utility fails to take a monthly meter reading and issues an “estimated” bill. A customer may receive and pay estimated bills for months, or even years, without realizing it. When the utility finally performs an actual meter reading, it may conclude its prior estimated bills were too low and issue backbills to correct the months or years of purported underbilling.
In addition to correction of prior estimated bills, utilities also issue backbills when they conclude a customer was previously underbilled as a result of a meter malfunction.
Receipt of a large utility backbill can be very disruptive. Most businesses that regularly pay monthly utility bills do not expect to receive massive backbills for electricity, water or gas supposedly consumed months or years ago.
Utility backbilling is permissible in New York but subject to very specific legal restrictions on timing and amount. The energy regulatory attorneys at Harris Beach Murtha have extensive experience with these legal restrictions and in successfully representing clients in utility backbilling disputes. We’ve saved our clients millions of dollars in reduced costs.
If a cannabis client receives a backbill, we can review it and the surrounding factual circumstances to determine if it is subject to total or partial cancellation under the relevant regulations. In appropriate circumstances, flexible fee structures are available so a client will not incur any legal costs unless the backbill is reduced or cancelled.
