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Reprise from August 2008: Big City Bills for a Small Business
Kenny Howell is cook and co-owner of the Kountry Cafe with his mother, Cathy and his wife, Peggy.

Editor's Note: We ran this story in August 2008 about local issues with the water company's new billing system. The issues have never gone away and now, the company is back. WSCK is asking the PSC for 21.9% increase (in addition to the last increase) to pay for Kentucky's share of the massively expensive software and management lyrically but inaptly named Project Phoenix.

Peggy Howell opened her water bill last week and was shocked. She now had two water bills for the month of August. Howell has been a small business owner of Kountry Cafe in Clinton Kentucky for over 12 years. In all that time, she has never been more upset and mad at the water company as she is now.

Her water company is Utilities, Inc. and according to Peggy Howell, “we are paying large city water bills for small town businesses!” Kountry Cafe is located in the small town of Clinton, Kentucky with 1,000 population. The town has one stoplight, several hair salons, one barbershop, two drug stores, two banks, one flower shop, one printing shop, one hardware store, 

According to Howell, the facts are that her restaurant received a water bill due August 5, reflecting an estimated past water usage over 20 days. Two weeks later, she received a new water bill for 35 days water usage period and was charged a late fee on the August 5th bill. 

Earlier in the billing cycle of 2008, the water company had been having trouble in getting correct bills out to its customers in Clinton. The February bill was for two months for some customers, others had no bills until later in the spring. For some customers, they received 3 bills in a 35-day period in March and April.

Project Phoenix from OracleIn June of 2008, Utilities, Inc. launched its version of Oracle’s Customer Care and Billing System. Oracle is one of the largest business software developers in America. Utilities, Inc. announced the implementation of this new system as a way to get control over their vast water systems billing problems.  

The new system went live on-line June 2, 2008. The Oracle Customer Care and Billing System was the culmination of a 2-year, multi-million-dollar project. This included their special implementation of Oracle’s JDE Enterprise in December 2007. This new system from Oracle replaced the old billing system by combining both the customer service and field operations systems with the new billing system.

According to Larry Schumacher, President and C.E.O. of Utilities, Inc. this management strategy allowed them to “standardize rate schedules maintained across operations and augment its reporting capabilities.”

Schumacher further stated "that we are excited to have this long awaited new tool in service. This system will allow us improved access to information, further enhance UI's customer focus and improve the customer experience overall."

Utilities, Inc. (www.uiwater.com) was formed in 1965 to provide developers with an alternative method to obtain water and wastewater utility service. Today, Utilities, Inc. is a portfolio company of American Insurance Group (AIG) Highstar Capital, and through its approximately 90 subsidiaries, operates over 500 utility systems in 15 states and serves over 300,000customers.

In Kentucky, Utilities, Inc. owns Water Service Corp. of Kentucky, with 7,000 customers in Middlesboro and Clinton. It is estimated, that some 700 customers make up the Clinton water system.

On August 8, 2008 AIG reported a worse than expected $5.36 billion loss on more mortgage related write-downs after close of trading. It was AIG’s third consecutive multi billion dollar quarterly loss, underscoring its continuing problem withholding large amounts of questionable securities tied to the crumbling housing market.

Four days earlier, on August 4, 2008, the Clinton City Council voiced its displeasures with AIG’s agent in Clinton, Utilities, Inc.

The Hickman County Gazette titled its August 6th account of the August Clinton City Council Meeting “Clinton Council Tired of Sloppy Water Bills“ The paper reported that “The Clinton City Council was losing its patience with the water company’s billing method. Billing errors on business and residential bills were horror stories. One woman had a $4,000 bill for the month and the City of Clinton’s business office was bill $6,500 for its water use.”

Recently, Clinton’s Mayor, City Clerk, Water Manager, and Utilities, Inc. Regional Manager held a conference call. No outcome of that meeting has been announced by either side.    

Speculation in Kountry Cafe is that the city cut a deal with the water company to waive the large water billing for city hall.

When reached by phone, James Leonard, Regional Manager for Utilities, Inc. said that “The conference call was made to allow Utilities, Inc to explain how they were addressing the concerns of the City Council for a better water billing program.”

 Mr. Leonard told this reporter that all efforts were being made to correct the problems in Clinton’s water billing statements. He also voiced hope that with their new and revised management strategies, that the software problems would soon be history. 

The company implemented a new program on June 2, 2008 optimistically called “Customer Care and Billing System” produced by software giant Oracle. In an email, Leonard admits that some customers may experience delayed bills or bills for two periods at the same time or a greater number of estimated bills. He promises, “If any of the system start up issues have caused a late fee to be assessed to your account, they will be automatically waived.”

Meanwhile, back at the Kountry Cafe, news has just arrived that TVA (Tennessee Valley Authority) will be increasing their base charge for electric power by 20%.

Setting a table, Peggy Howell said in a frustrated voice, “All I want to do is run a small town restaurant for the working men and women of Clinton. I don’t have time to fight the water company each month over what my bill is!”

 AIG lost 5 billion dollars last quarter. The owners of Kountry Cafe are worried about a $50 dollar difference in their water bill. AIG will write their loss off their taxes. There is no write off for the time, aggravation and wasted effort that small business owners experience when billing problems arise. The bottom line for the Kountry Cafes of the world is that they have to have the product that Utilities, Inc. sells and there is nowhere else they can get it.

James Leonard, Regional Manager of Utilities, Inc., subdivision of AIG, says they are looking forward to establishing a better way of doing business in Clinton. Maybe in the middle of conflict and problems, smart organizations and people will find new opportunities for solving conflict.

Despite her first moments of shock and anger, Peggy Howell hopes that Clinton and Utilities, Inc. will resolve this problem and show the world how a small town’s leadership can move a community into the 21st century.    Only time will tell if she is right.

UPDATE:   Utilities Inc./Water Service Corp. of Kentucky filed for a rate increase request with the Kentucky Public Service Commission in December 2008 asking for a 50% increase. They settled with the PSC and Attorney General for 30% in 2009. In late 2010, a new rate increase request was filed for 21.9%.

Peggy Howell opened her water bill last week and was shocked. She now had two water bills for the month of August. Howell has been a small business owner of Kountry Cafe in Clinton Kentucky for over 12 years. In all that time, she has never been more upset and mad at the water company as she is now.

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