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Doesn’t Houston Want the $100 Million?

HOUSTON (CN) - Houston may be owed as much as $100 million in refunds for electric bills, but it won't give its auditor the records it needs to do its job, the auditor claims in court.

Tri-Stem Ltd. sued Houston in Harris County Court.

Tri-Stem has been "conducting audits for federal and state agencies, cities and other large consumers of electricity" for more than 30 years, it says in the lawsuit.

Based on its preliminary investigation, Tri-Stem says, the city is due a refund of more than $100 million on its electric bills, but Tri-Stem isn't sure because the city is being uncooperative.

Houston hired Tri-Stem in late 2009 and agreed to pay it 45 percent of any cash refunds it gets from Tri-Stem's work, according to the lawsuit.

Tri-Stem says it suspects the city kept it around long enough "to learn its processes" and is cutting ties to avoid paying a percentage of any refund.

The contract set out Tri-Stem's audit in two phases: a survey of the city's unmetered street lights, and a review of all other electric and natural gas bills paid by the city.

Under the contract, the city must provide Tri-Stem with a map showing where its street lights are and copies of its service contracts with its utility providers, but the city has not been forthcoming with the records, Tri-Stem says.

Nonetheless, Tri-Stem, says it has determined the City of Houston, called COH in the complaint, has 4,000 metered electric accounts and 45 unmetered street light accounts.

"COH has presented Tri-Stem with a street light inventory from the utility company, but it was found to be outdated and inaccurate," the complaint states. "Regrettably, COH has never provided to Tri-Stem an accurate street light inventory. Without such an inventory, it is impossible for Tri-Stem to fully assess the extent to which COH is being overcharged."

Tri-Stem claims that Houston's electricity provider, CenterPoint Energy, has been just as tight-fisted with its records.

For its due diligence, Tri-Stem says, it asked CenterPoint for all its service contracts with the city and in July CenterPoint's rates manager promised to mail them.

"Soon thereafter, Tri-Stem received a package of 24 different versions of blank agreements," the complaint states. "CenterPoint obviously was requested to provide actual executed agreements between CenterPoint ... and COH - not blank forms."

Tri-Stem says it followed up with CenterPoint's manager who emailed in response: "We are in continuing discussions with the City's lawyers to address the street light billing dispute. At this time we do not believe it is necessary to provide any further information."

Tri-Stem adds: "This email was forwarded by Tri-Stem to COH with a question: 'Is this true?' Tri-Stem never received a response from COH, which would appear to indicate an agreement by COH with CenterPoint's position."

Tri-Stem says Houston's obstruction "is unfathomable," given that its job is to save the city money.

The auditor says that "based on the limited data it has been provided" the city is due a refund of more than $100 million.

City officials sent Tri-Stem a letter in September stating that they don't want to extend the contract to let Tri-Stem finish the audit, according to the lawsuit.

Tri-Stem wants damages for breach of contract.

It is represented by Michael Cosby with Pakis, Giotes, Page and Burleson of Waco.

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