Application Corner: Flowmeter billing errors

Large legal cases are usually more complex, more challenging and more interesting than small and medium cases because large cases often involve multiple issues across multiple disciplines that need to be considered in a legal environment where access to information can be limited. All of this can be made more difficult because the potential monetary awards can reach tens of millions of dollars. In this environment, one oversight can cost millions of dollars.

Some years ago, there was a case where a plant purchased process steam from the boiler house located in an adjacent plant. Flowmeters were installed when the boiler house was new (approximately 50 years prior) to measure the steam leaving each boiler. The measurements from these flowmeters were used in calculations to determine the steam bill for the smaller plant. My recollection is that a total of approximately $200 million per year of steam was produced in the boiler house — a portion of which was consumed by the smaller plant.

Let’s stop for a minute to examine the potential magnitude of the issue. A 1% flow measurement error could represent a total potential billing error of approximately $2 million per year. If the smaller plant consumed 15% of the total steam, billing errors could be as high as approximately $300,000 per year. Flowmeter errors of (say) 5% could result in errors of approximately $1.5 million per year. In addition, these potential billing errors can add up to many millions of dollars over years of operation. 

These large potential billing errors made it reasonable to seek legal counsel and have an expert examine the steam flowmeters. 

David W. Spitzer is a principal at Spitzer and Boyes, LLC, which offers engineering, focused market research, writing/editing white papers, strategic marketing consulting, distribution consulting, seminars and expert witness services for manufacturing and automation companies. Spitzer has written more than 400 technical articles and 10 books about flow measurement, instrumentation and process control. He can be reached at 845-623-1830 or via spitzerandboyes.com.