Townhouse West Tenants Win Three-Month Reprieve from Submetering Charges

Tenants at Town House West in Manhattan won a three-month reprieve from submetering charges after they filed a Petition with the Public Service Commission seeking to halt the implementation of submetered electric service. See Town House West Tenants Ask PSC to Halt Submetering, PULP Network, July 21. 2009. The Petition seeks relief for several reasons, including

  • Failure of the owner to provide adequate notification to tenants of the application for permission to submeter,
  • Absence of filed contracts or tariffs approved by the PSC, and
  • Failure to provide “shadow” billing in advance of implementation of submetering to give tenants better knowledge of the impact before, in most cases, being required to pay more in total monthly charges for rent and electricity,
  • Complaint procedures out of compliance with the Home Energy Fair Practices Act,
  • Deeming of charges for electric service to be added “rent,” and
  • Noncompliance with nearly every putative consumer protection condition contained in the PSC order which granted permission to the owner to submeter and provide electric service to tenants.

On July 27, 2009,the PSC Secretary referred the case to the PSC’s Office of Consumer Services (OCS) for treatment as a complaint under the PSC complaint handling procedures, with no action taken on the tenants’ request for a stay of the submetering. The Town House West Tenants Association, represented by PULP, then requested interlocutory review by the PSC of the Secretary’s decision to shunt the case to the OCS without acting on the stay request. The tenants pointed out that in granting the petition for submetering approval, the PSC staff wrote that no one had commented. While that was literally true, the owner had given a notice required by PSC submetering regulations with only four business days remaining in the 45-day SAPA comment period (encompassing a Christmas weekend), and even that short notice was deficient in substance, because it only said tenants could “contact” the Commission, without advising them of the opportunity to comment on whether the owner should be allowed by the PSC to submeter, and without advising enants of the date comments were due. The tenants’ request to the PSC for a copy of the owner’s petition was not promptly acted upon by PSC staff, and was not sent until one day after the PSC had voted to approve the petition. See Town House West Tenants Association Interlocutory Appeal of Secretary’s Referral of Stay Application to Office of Consumer Services, August 7, 2009.

Yesterday, Town House West tenants received notice that the owner, Stellar Management, is crediting back to tenants all charges for submetered electricity that have been collected to date. The bills previously sent for three months’ service (May, June and July) will now be treated only as informational “shadow bills” to reveal the eventual financial impact of submetering, but will not actually be collected. Payments for electricity bills previously made by tenants are being “credited against your September rent.” The owner’s letter dated August 24 states, in part

Recently, as part of your August 2009 rental statement, you received a “bill” for electricity usage for your apartment for the period 5/5/09 – 6/4/09. At the same time you received another “bill” for the same period for the same amount from our outside vendor, Quadlogic or QLC. These “electric bills,” however, should have been labeled as a “shadow electric bill.”**** [Y]ou do not need to pay this “bill;” it is simply for educational purposes.

The owner’s letter goes on to say that the electric bills received by tenants for the periods 6/4/09 – 7/4/09 and 7/4/09 – 8/4/09 were “purely for educational purposes, and you do not need to pay these shadow bills either.”

The owner indicates that it will seek to collect charges for service beginning August 4, 2009, and that those charges will show up with rent bills for October, due to a two-month billing lag. The owner’s letter to tenants advising them of the newly characterized “shadow bills” also included a revised proposed lease rider and information about HEFPA rights, including the right to have billing complaints adjudicated by the OCS. The lease rider has not been approved by order of the PSC.

Market rate tenants at Town House West whose leases do not now have valid submetering provisions may be able to avoid submetering charges until they negotiate a renewal lease. According to the owner’s August 24 letter, tenants whose leases are subject to rent stabilization laws will receive rent reductions beginning in August, under a DHCR order requiring rent reductions when bills for electricity are shifted to tenants.

The Townhouse West Tenant Association Petition, and the individual complaints of Townhouse West tenants, are still pending at the OCS. The Tenants’ Association has not received a copy of any answer to the Petition or other papers submitted to OCS by the owner or its counsel, Harris Beach.

For further information see PULP’s website page on submetering.

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