Audit calls for monthly meter reading
Under fire for more than a year over its mistake-prone billing system, Central Hudson said earlier this month it plans to return to reading meters monthly.
An auditor hired by the Public Service Commission (PSC) agreed, saying that one of its more than 40 recommendations for the utility was to stop reading meters every other month but billing monthly, which the utility has been doing since 2016.
Overland Consulting, which completed an examination of Central Hudson’s management and operations that is required every five years under state law, said that the practice of reading meters every other month aggravated widespread billing problems that began in September 2021 when the company switched to a new, $88 million customer-information system.
About 20,000 of Central Hudson’s 309,000 electricity customers experienced problems such as delayed bills and double billing, and calls to customer service rose nearly tenfold in a year. The wave of complaints triggered long hold times and a high rate of abandoned calls, according to the audit.
Some customers received estimated bills for consecutive months, partly because the new system would not accept data from meter reads, according to the audit.
The auditor cited the case of a customer who, after months of estimates during which energy prices had spiked, submitted his own meter reading. Central Hudson’s system applied the higher rate in effect when the customer submitted the reading instead of the lower prices from previous months. As a result, he was charged $2,625 instead of $450, said Overland.
In other cases, according to the report, Central Hudson underestimated usage, leaving customers with higher balances when the utility read the meters the following month.
As of June 2022, 53 percent of Central Hudson customers had meters with radio transmitters that could be read remotely by utility workers walking or driving by, according to the PSC, which approved the audit report on April 20.
But progress has been slow, according to the audit, which estimated the number of remote meters had only grown by 4 percent in four years. Central Hudson’s installation rate of 5,000 transmission-capable meters per year is “slightly above customer growth,” the report said. Overland estimated Central Hudson will have to invest an additional $1.8 million for every customer to get monthly readings.
Central Hudson’s response will be part of a plan it must submit, by May 30, detailing how it will address Overland’s recommendations. The state Department of Public Service, which provides support to the PSC, will review the plan and receive comments from the public. The PSC must approve the revised version.
Joseph Hally, vice president of regulatory affairs for Central Hudson, said the key findings “generally seem reasonable” and that the company will examine “the feasibility, effective execution and anticipated costs and benefits” to implement each one.
“To the extent that Central Hudson believes a recommendation cannot be effectively addressed with existing resources, it will provide rationale supporting any future request for cost recovery,” said Hally. Cost recovery means the utility would pay for projects and programs through charges on customer bills.
While Central Hudson’s billing problems have drawn widespread attention, and the PSC is considering fining the company, the audit was comprehensive, covering governance and management; information systems; electric and gas operations; budgeting and finance; project and work management; performance management; and customer operations.
Overland found that the company improved its strategic planning process and is doing well at modernizing its grid and replacing pipes prone to leaking. But it also said the utility has failed to identify business opportunities linked with climate-change initiatives.
Central Hudson should designate someone to ensure that the company identifies every low-income customer eligible for energy-assistance programs and benchmark the performance of its customer-service operations to other utilities, the report said.
Earlier this month, Central Hudson said it was adding 36 people to its customer contact center, nine to customer billing and four to consumer outreach.
