Under‑recovery and leakage in third‑party damage billing and collections
Definition
When excavators damage gas distribution facilities, utilities often have the right to bill the responsible party for repair and associated costs, but fragmented data, weak documentation from ticket management, and inconsistent follow‑up cause many repair costs to go only partially recovered or entirely unbilled. This creates a recurring leakage where ratepayers absorb costs that should be charged to third parties.
Key Findings
- Financial Impact: National Grid’s damage prevention paper explicitly lists ensuring that the ratepayer is fully reimbursed by following a consistent third‑party damage billing and collection process as a core objective, indicating that prior to standardization there was material under‑recovery of costs.[1] Given thousands of third‑party damage events per year for a large utility and typical individual repair bills in the thousands of dollars, even a 10–20% under‑billing or collection gap can translate into hundreds of thousands to low millions of dollars of annual lost recoveries for a single gas distribution company.
- Frequency: Monthly
- Root Cause: Disjointed workflow between field response, ticket systems, mapping, and claims/collections; missing or poor documentation of damages, unclear assignment of fault, and lack of standardized damage billing procedures; National Grid highlights the need to integrate IT, dispatch, mapping, and claims/collection and to standardize third‑party damage data summarization and trending, demonstrating that ad‑hoc approaches lead to under‑recovery.[1]
Why This Matters
This pain point represents a significant opportunity for B2B solutions targeting Natural Gas Distribution.
Affected Stakeholders
Claims and collections teams, Damage prevention managers, Field supervisors documenting third‑party damages, Regulatory and rate case teams (defending cost recovery), Finance and revenue assurance
Deep Analysis (Premium)
Financial Impact
$100K-$1M annual financial leakage per utility • $100K-$1M annual from 10-20% collection gap • $100K-$1M annual leakage from under-recovered repair costs
Current Workarounds
Ad-hoc documentation via field notes and email chains for damage claims • Ad-hoc invoicing and chase via email chains and shared drives. • Damage tickets logged in CMS (Complaint Management System) or one-call platform; field crews document damage via photos or written notes; data manually transferred to spreadsheets for damage trending; inconsistent time-stamping and cost capture
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Methodology & Sources
Data collected via OSINT from regulatory filings, industry audits, and verified case studies.
Related Business Risks
Recurring third‑party damage repair and emergency response costs from inadequate damage prevention
Cost of poor quality from mis‑locates and incomplete markouts leading to repeat tickets and rework
Lost crew productivity from manual one‑call ticket handling and non‑risk‑based interventions
Regulatory enforcement and civil penalties for inadequate excavation damage prevention programs
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