Report says employees warned of ‘major’ billing issues
New York’s utility regulator is considering a civil penalty against Central Hudson in the wake of a six-month investigation into an $88 million upgrade of the company’s billing system that caused widespread errors for customers.
In a report released on Thursday (Dec. 15), the Public Service Commission (PSC) said Central Hudson’s quest to improve its customer information and billing system to “handle complex billing scenarios” instead caused nightmares for customers and apparent violations of commission orders and state laws.
Some employees warned of “deficiencies in testing, training and readiness” for the system but the company pressed them to have it ready to go live on Sept. 1, 2021, according to the PSC, which is part of the state Department of Public Service.
The problems, including programming errors, caused delays in issuing statements that lasted more than three months for some customers and overcharges that affected more than 8,000 customers, many of whom began filing complaints with the PSC and airing their frustrations on social media and to reporters.
With the system erroneously blocking bills from being sent for prolonged periods, the company began sending out invoices based on estimates, in violation of approved procedures for using them instead of actual meter reads, said the report.
Some of the billing errors were enormous. One customer who typically paid $500 a month had two bank accounts debited by Central Hudson for $12,107.52 and $16,212.74. The company eventually refunded the money. A customer with automatic billing had a bank account debited for $30,534.27, according to the PSC.
In addition to a civil penalty, the state intends to investigate the propriety of Central Hudson’s expenditures for the system, the PSC said on Thursday. A day earlier J.D. Power rated Central Hudson next to last among midsize companies in its annual customer-satisfaction study of utility companies in the East Region.
“Ensuring customer bills are accurate is the singular responsibility of the utility,” said Rory Christian, the PSC chair. “Given the scope and seriousness of the utility billing problems at Central Hudson, the department will now determine the level of commission action required to address these issues.”
Joe Jenkins, a representative for Central Hudson, said in January that the company had more than doubled its customer service staff and expanded operating hours to reduce the time account holders spent on hold as problems surged.
He said on Thursday that Central Hudson has “fully cooperated” with the PSC and will “continue to dedicate significant resources” to fixing problems.
“Technical challenges associated with the implementation of this system have caused undue stress and confusion to some of our customers,” said Jenkins. “For that, we are deeply apologetic.”
Central Hudson has 30 days to show why the PSC should not penalize the company and investigate its spending on the systems upgrade. The PSC also said it ordered the company to create a plan for eliminating bimonthly billing estimates.
More than 4,300 people have submitted comments during the PSC’s investigation, with the agency posting additional ones as recently as Friday (Dec. 16). Jonathan Jacobson, whose state Assembly district includes Beacon, said on Thursday that his office has also been receiving complaints from angry customers.
Legislation he introduced in May limits when utility companies can send bills based on estimated usage. “Central Hudson owes its affected customers more than an apology,” he said. “It owes them financial compensation for months of uncertainty and frustration.”