Hi, Bill, sorry you guys are having so much trouble. You're talking about the opportunity cost of money here...what your relative could have earned if she simply invested the overpayment/overcharges. These "opportunity costs" are usually set on a very secure investment parameter.

I'd make things as simple and as above reproach as possible. Instead of asking for something like prime plus 2% or whatever and having to calculate it as a function of accumulation of overpayments, taking periodic rate changes into consideration, I'd just ask for compensation as a function of the rate the utility would have to pay for funds today. They probably have a line of credit for revenue shortfalls in place. Or, you could simply contact a local bank to get current line of credit rates, assuming top tier credit. Factor that percentage into your calculator. I don't think any court or the utility could argue with the logic. Rates have been less in the past few years, but much more through the early 90's. It's as fair and as easily understood a request as is possible. As far as a request for compensation for your time, you could include it in your first demand letter and negotiate from there, but you generally have to file suit for that kind of compensation. Many states (30+)have adopted the Uniform Commercial Code, which, in some cases, sets guidelines for interest rates. The 1.5% per month penalty rate for past due accounts, where legal(Uniform Commercial Code states), includes compensation for rebilling/staffing for the collection process, so I wouldn't think of asking for that kind of compensation, unless you go to court.

I know your relative dosen't want to get into protracted legal issues, and I know the utility dosen't want the adverse publicity.

As an accountant, and taking into consideration the issues of age and frustration, this is my suggestion of the simplest and easiset to resolve approach.
As a loan officer for a Credit Union and two bank holding companies, I could get you a rate for an open line of credit for a utility, if you'd like, and send it to you in the form of an official letter, as an "expert" for presentation as a support/rationalization document with your request. Just let me know...

Good luck!


Russ

[This message has been edited by captain Russ (edited 08-28-2006).]