Oceangate Submetering on Hold Pending PSC Review of Tenant Petition for Stay and Impact Assessment

When submetering is proposed by owners, it is common that tenants are misinformed and misled to believe that submetering will be offset by rent reductions and will only affect adversely those who are energy wasters, which is not true. The PSC often approves submetering without reliable information about the eventual impact on tenants, and after sham notice from the owner to the tenants. Tenants often learn far too late in the game what the real impact will be. In several situations, tenant petitions to correct a bad situation after submetering has been implemented have been deemed by the PSC to have been filed too late, despite flagrant violations of law and the minimal, unenforced tenant protections ostensibly required by the PSC in its orders allowing submetering.

The process of submetering typically lasts years, from application of the landlord to the PSC for waiver of the general prohibition against submetering, to installation of meters with NYSERDA subsidies to landlords, approval by DHCR, and implementation after a “shadow billing” period required by DHCR and HUD. The stages of the process typically involve actions by several state agencies, e.g., the PSC, DHCR, and NYSERDA, and in some instances, the federal Department of Housing and Urban Development (HUD).

The North Bay Tenants Association filed a Petition with the PSC in January 2010 seeking to halt implementation of submetering of their electrically heated apartments at Oceangate, a large development in Coney Island, Brooklyn. The North Bay Tenants’ Association is represented by PULP.

Submetering at Oceangate was approved by the PSC in 2007 and was only now nearing implementation in 2010, but DHCR had not yet acted, tenant leases had not been modified to obtain informed tenant consent to rates, terms and conditions of the landlord’s electric service, and “shadow” electric bills for submetered service had not yet been issued. The owner is simultaneously seeking a rent increase from DHCR and approval by DHCR of its submetering plans, including waiver by DHCR of HUD submetering requirements that apply to the federal subsidy program for Oceangate. HUD requires its prior approval, amendment of regulatory documents, reasonable adjustment to rents and utility allowances so that tenants who use electricity reasonably will not be harmed, notice to tenants and tenant consent to new leases before submetering may begin and a six month shadow bill period before actual charges are made.

The tenants’ Petition filed with the PSC includes a claim that there must be an environmental assessment under SEQRA of the impacts of the project including possible displacement effects on low income households if there is a mismatch between rent adjustments and the utility bills, as is common. See Oceangate Tenants Ask PSC and DHCR to Halt Submetering and Conduct Environmental Impact Assessment Under SEQRA, PULP Network, January 28, 2010.

The PSC established a schedule for submission of papers and briefing, requiring the owner to respond to the tenants’ petition by Feb. 22.

On February 19, 2010, attorneys for Oceangate filed a letter with the PSC requesting more time to respond to the tenants’ Petition. The letter confirms an understanding — apparently reached in ex parte discussions with PSC staff — that in no event will the owner issue bills or expect payment for any charges for submetered electricity prior to June 1, 2010.

For more background information, see PULP’s webpage on submetering.

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