Those Pennies Can Really Add Up

DALLAS (CN) - A recycler overcharged an electric company by 2 cents a pound for scrap metal - netting more than $1 million by it, the utility company claims in court.

Oncor Electric Delivery Co. sued GLM DFW, of Plano, in Dallas County Court.

Oncor claims that from 2006 to 2010 it paid GLM to recycle metal industrial waste generated by Oncor's 117,000 miles of electricity lines in Texas. The parties were to split the proceeds.

In 2010, Oncor invoked its right to audit GLM's records regarding the contract. A third party, CMC Recycling, had been contracted to do the actual disposal and recycling - its records were audited too, according to the complaint.

"When Oncor compared the rates for CMC's processing fees to the processing fees that GLM had reported, Oncor discovered that GLM had been inflating CMC's processing fees by $.02 per pound across every category of waste," the complaint states. "For some materials, this additional charge by GLM was more than a 100 percent markup of the actual rates charged by CMC."

Oncor claims that in a March 2011 settlement agreement, GLM agreed to pay more than $876,000. But it says GLM refused to honor the agreement to retaliate for Oncor's refusing to renew the parties' 5-year contract.

"First, GLM withheld the full amount of its initial settlement payment from the sales proceeds payable to Oncor for its scrap metal," the complaint states. "Second, GLM failed to pay the second installment of the settlement payment that was due June 1, 2012."

Oncor seeks damages for breach of contract.

It is represented by James Walker with Walker Sewell of Dallas.

Follow @davejourno

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