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    State Senate issues report on utility pricing failures

    January 6, 2023 - Lana Bellamy, Times Union, Albany, N.Y.


      Jan. 6—ALBANY — Jane, a Newburgh resident, hadn't received a utility bill in six months. After pleading with her power company to send one, she was shocked to receive a one-month tab showing a dramatic increase in electric usage — 2000 kilowatt hours of electricity compared to her typical 300 kilowatt hours.

      Jane's was among a handful of customer stories (their last names withheld) included in the state Senate Investigations and Government Operations Committee's final report, released earlier this week following a nine-month investigation into utility pricing practices in New York.

      The probe examined the state's six major, investor-owned utilities and its largest public-private utility — Central Hudson, Con Edison, Orange and Rockland Utilities, National Grid, NYSEG, Rochester Gas & Electric and PSEG Long Island — based on the way most New Yorkers purchase and are provided with power and heating. The utilities serve an estimated 4.4 million natural gas customers and 8.1 million electric customers.

      Another customer claimed he hadn't received a correct billing statement in nine months and was not properly credited for three months of payments, despite having confirmations from his utility. Another customer saw his electric bill double compared to the same timeframe in 2021, despite having used a similar amount of power.

      A spokeswoman for state Sen. James Skoufis's office said the three customers' stories were sampled from the most egregious utility billing cases fielded by the senator's constituent services team. She said of the more than 1,250 cases they handled last year, 440 cases regarded utility billing and pricing.

      Skoufis, a Cornwall Democrat who leads the Senate's Investigations and Government Operations Committee, said that the findings of the investigation, which was conducted with the Senate's Energy Committee, revealed several regulatory gaps.

      "As we've known from the beginning, righting the ship on utility pricing isn't just a matter of New Yorkers needing to tighten their belts and unplug the coffee maker once in a while," Skoufis said in a statement. "Our investigation uncovered a number of regulatory gaps that, if properly addressed, would save utility consumers money, heartache, and time."

      The report found issues with energy supply hedging practices and billing reconciliations; a lack of competition and accountability; flawed customer notices and utility communications; and systemic billing issues. Portions of the report bolster another report released about three weeks ago by the state Public Service Commission, which investigated issues surrounding Central Hudson's billing practices.

      The Public Service Commission's investigation accused Central Hudson of negligence for rolling out a new billing system knowing it had critical issues. More than 8,050 customers were overcharged, according to the report, and more than 30,000 customers who pay monthly had suddenly seen multiple months of bills automatically withdrawn from their bank accounts. Those alleged billing problems are highlighted in the introduction of the Senate report and given their own subsection.

      In a statement to the Times Union, Central Hudson said that supply prices are market-based and influenced by a number of regional, national and global factors — which the Senate report notes.

      "Central Hudson will continue to work with our regulators and lawmakers to find ways to mitigate the impacts energy supply market volatility has on our customers and to alleviate customer concerns," the utility's spokesman Joe Jenkins said in the statement.

      Jenkins said Central Hudson has devoted a "tremendous amount of resources to stabilizing our new customer information system" and has made "significant progress." The utility plans to soon submit a formal response to the Public Service Commission's report.

      "We understand the concerns and stress this has caused our customers and for that, we are deeply apologetic," Jenkins said in the statement.

      Lawmakers have become increasingly critical of New York utility companies in recent years for inconsistent billing practices and for their ability to restore power after major storms, such as 2020's Tropical Storm Isaias, which left thousands without power for more than a week.

      The utilities have paid millions in various settlements for allegedly failing to adequately prepare for and respond to emergencies, including Isaias. One of those was an $86.2 million settlement for alleged violations by Con Edison, Orange & Rockland Utilities, Central Hudson and Frontier Communications, of which Con Edison and O&R paid a vast majority ($82 million). Money from the settlements was intended to be used to offset costs that would have been otherwise borne by customers," according to a news release from then-Gov. Andrew M. Cuomo's office.

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      The report recommended a number of solutions to fix the problems the investigation uncovered, including strengthening oversight of utility hedging practices; standardizing customer communications; limiting retroactive billing; conducting new annual audits; increasing transparency of energy supply purchases by utilities; and prohibiting service shutoffs when monthly volatility reaches a certain threshold.

      The report also recommended passing these bills:

      The Build Public Renewables Act;

      Legislation sponsored by state Sen. Michelle Hinchey that would limit estimated billing and require utilities to reimburse customers, with interest, for overestimates that result in overpayments;

      Two Senate bills sponsored by Sens. John W. Mannion and Kevin S. Parker that seek to ensure low-income and vulnerable populations are appropriately enrolled in customer assistance.

      "All utility companies must be held accountable to the New Yorkers they are bound to serve, and through my legislation to ban estimated billing coupled with the recommendations from the Investigation Committee's thorough report, we will keep holding utilities' feet to the fire to protect families while fighting to ensure they are only paying what they owe," Hinchey said in a statement.

      A spokeswoman for Hinchey confirmed the senator plans to reintroduce her bill next week.

      "Utility bill surges add stress on the budgets of already struggling New York households," Laurie Wheelock, executive director and counsel of the Public Utility Law Project, said in a statement. "As we enter another winter with high energy supply bills, we applaud Sen. Skoufis and the Senate Investigations Committee for concluding their inquiry into the pricing practices of electric and gas utilities around the state."

      Phillip Pantuso contributed reporting.


      (c)2023 the Times Union (Albany, N.Y.)

      Visit the Times Union (Albany, N.Y.) at

      Distributed by Tribune Content Agency, LLC.


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