Using Models to Estimate Unbilled Energy

Overview

Section 404 of the Sarbanes-Oxley act implies that management is responsible for internal controls and procedures related to financial reporting and estimating and reporting unbilled revenue is one of these procedures. As a result, the methods used to estimate unbilled energy are being examined closely at many utilities. This paper summarizes alternative approaches to estimating unbilled energy. Two methods, one based on analysis on the monthly level and one based on analysis at the daily level are covered. Either method, if applied consistently to data that are aligned appropriately, will provide accurate and defensible estimates.