Under HEFPA, the New York PSC Must Decide Complaints of Submetered Customers

After its 1979 order expanding the scope of submetering from cooperatives and condominiums to rental housing, the New York Public Service Commission (PSC) over the years approved a variety of confusing complaint resolution procedures in its submetering orders, which waive the general ban on resale of electric service. The 1979 PSC order expanding submetering to rental housing predated the 1981 enactment of the Home Energy Fair Practices Act (“HEFPA”).

HEFPA includes section 43 of the Public Service Law, which requires the PSC to adjudicate complaints of residential utility customers.

Official regulations of the PSC (Part 96) for many years required submetering landlords to provide consumer protections “consistent” with HEFPA. Inexplicably, many post-HEFPA submetering orders contain reference to complaint adjudication by entities other than the PSC.

Often the complaint procedures and information given by landlords to tenants will mention that HEFPA applies and that the customer can “contact” the PSC. The materials do not, however, clearly advise the customer that they have a right under the HEFPA statutes to have their complaint about electric service decided administratively by the PSC. Inexplicably, despite the applicability of the PSC complaint handling procedures, over the years the PSC has approved

  • Binding arbitration by the American Arbitration Association, 2000 Hazel Towers Submetering Order (“Upon receipt of the protest, the matter shall be turned over to a grievance arbitrator. The arbitrator, to be selected from the American Arbitration Association or equivalent. . . .“); 1998 Ruppert/Yorkville Towers Submetering Order (“The arbitrator, to be selected from the American Arbitration Association or equivalent, is to take action within a reasonable period of time….and the decision of the arbitrator will be binding to all parties”);
  • Non-binding arbitration, 2001 Ebbetts Field Apartments Submetering Order (“the submetering plan does not provide for binding arbitration, only arbitration”);
  • Arbitration followed by PSC complaint process, 2008 1 Alexander Street, Yonkers Submetering Order (“The property manager will submit the grievance to an independent arbitrator selected from the American Arbitration Association or equivalent, at no cost to the tenant. The decision of the arbitrator w ill be provided to the tenant promptly with notice of the arbitration procedures. If the tenant is dissatisfied with the decision of the arbitrator, either party may file a complaint with the Commission pursuant to the Home Energy Fair Practices Act (HEFPA)).
  • New York City Landlord-tenant court proceedings in the 2008 City of New York,Roosevelt Landings (Eastwood) Submetering Order, (“If a resident remains dissatisfied, the resident, within fifteen (15) days of management’s response, may request in writing that the grievance be submitted to the New York City Civil Court Housing, Landlord/Tenant Court”);
  • The New York City Department of Housing Development and Preservation, 1997 North Waterside Plaza Submetering Order (“If the complainant is dissatisfied with the managing agent’s response, he or she may request a review of said determination by filing a written protest within fourteen days from the date of the response to HPD”).
The alternative venues for complaint adjudication mentioned in some submeterers’ documents all involve time consuming formal proceedings that may also be expensive and risky, for example, if an eviction case is the forum for resolution. When all of the above orders – and many other similar orders -were issued, the PSC had on the books an official regulation saying that all submeterers must provide protections consistent with HEFPA. Even after the 2002 ECPA amendments clarified that the PSC cannot waive any HEFPA requirements for any providers of utility service, the PSC continues to grant submetering applications that refer complaints to third parties prior to or in lieu of the statutory PSC complaint procedure.

The cost, time, and formality of these alternative complaint resolution systems probably serves to intimidate and deter tenants from seeking redress from the PSC regarding common disputes over submetered electric service. The orders with alternative grievance procedures often refer, rather cryptically, to the applicabiilty of HEFPA (which includes PSl Section 43, the PSC complaint handling duties) or the to PSC complaint handling process. But when tenants with grievances over submetered service look at the actual information given them by their landlords or in their leases, the emphasis is on the alternative procedures, with little or no disclosure of the availability of the PSC complaint adjudication process. In some landlord-provided information, the only disclosure is that the tenant may “contact” the PSC.

The PSC has jurisdiction to decide complaints of submetered customers regarding electric service, including, without limitation, for example, when landlords or their submetering agents

  • threaten or impose a charge to investigate and check a possibly malfunctioning meter,
  • threaten or impose a charge to check and determine if one’s meter measures service to a neighboring apartment or to common areas outside the tenant’s apartment,
  • threaten or impose late charges in excess of those allowed by the PSC,
  • say nothing can be done about wide variations in monthly charges or usage that cannot be attributed to or explained by the tenant’s actual use of electricty
  • refuse to allow tenants questioning bills to review the landlord’s electricity costs, the basis for charges, or the method of bill calculation,
  • deem disputed charges for electric service not paid by the customer to be “additional rent” and threaten eviction if the disputed charge is not paid,
  • fail to credit payments or make billing mistakes.

In a March 23, 2009 Memorandum, PSC Adjudication of Submetered Customer Complaints, PULP reviewed the alternative complaint resolution procedures adopted in the past by landlords with PSC approval. We concluded that the PSC is the body required by law to decide residential utility customer disputes, it has no authority to require submetered customers to have their disputes decided by other bodies, and cannot waive any requirements of utilities (submeterers) including the duty of the service provider to have a prompt complaint resolution process within the utility and to notify the customer of the availability of the PSC complaint handling procedures. None of the alternative, external venues often mentioned in leases or PSC submetering orders is appropriate for prompt resolution by the utility service provider itself of a dispute over electric bills or service.

Landlords who submeter are “utilities” within the meaning of the Home Energy Fair Practices Act that submetered service must be provided in accordand with HEFPA. In their role as utilities, they must obey consumer protection requirements placed upon utilities by the law. This was finally recognized by the PSC after the Legislature clarified the law in 2002role of submeterers is now embodied in PSC regulations. In a December 5, 2003 decision, the PSC acknowledged: Those who submeter electricity for sale to residential end-users are utilities within the meaning of Article 2 of the PSL. Accordingly, those entities must provide all HEFPA protections.”

Utilities (including submeterers) must have their own internal grievance procedures for residential customers. When that does not suffice to resolve the issue to the satisfaction of the customer, the customer must be notified of the availability of the PSC complaint handling and determination procedures. HEFPA requirements cannot be waived. Just telling customers they can “contact” the PSC, as some landlords do in their explanations to tenants of the complaint process, simply is not enough to satisfy their duty to inform the customer of the availability of the complaint handling procedures required by HEFPA.

The PSC complaint handling procedure

  • can be accessed by mail, telephone, or internet.
  • Typically, the PSC will buck the issue back to the provider of electric service for a review and reconsideration of the issue, thus requiring the customer to complain again to the PSC if that does not satisfactorily resolve the problem. When the customer again complains to the PSC, the complaint is finally “escalated” to the point that PSC staff then investigates and issues an initial decision.
  • If the initial decision does not provide a resolution satisfactory to the customer, an informal hearing or informal review can be requested.
  • If the informal hearing or informal review does not resolve the problem, the decision of the reviewer or hearing officer can be reviewed in an appeal to the PSC for a final agency decision.
  • If the final PSC decision does not resolve the problem, the complainant can file an Article 78 proceeding for judicial review of the decision in Albany County Supreme Court, within four months of the PSC decision.

In sum, submetered electric customers should not be deterred or misled by misleading or erroneous language in their leases or other materials provided by their landlords into thinking that they must pursue remedies in costly, overly formal, and time consuming proceedings in other forums.

For more information about the PSC complaint process, follow the links at the PSC webpage on Filing a Complaint with the PSC. Also, see PULP’s webpage on the PSC complaint process. The PULP Law Manual chapter on PSC complaint procedures is under revision and is expected to be completed later this year.

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