Under proposed “reform” legislation to revise the structure and operations of the Long Island Power Authority (LIPA), it appears that LIPA consumers will not have the full benefits of the protections and complaint adjudication process available to other utility customers of public and investor-owned utilities across New York state.
To understand the latest twist in the loss of full customer protection benefits under HEFPA to residents of Long Island we need to lay out some history.
First, what is HEFPA?
Background – HEFPA
The Home Energy Fair Practices Act (HEFPA) is New York’s utility consumer “bill of rights.” It was adopted in 1981 both to establish new rights and to consolidate existing customer rights that had been judicially declared in court cases over the years. Codified as Article 2 of the Public Service Law (PSL) Section 30, et seq., HEFPA remains one of the strongest utility consumer protection statutes in the nation, and is a cornerstone of New York State’s universal service policy. PSL Section 30 states
It is hereby declared to be the policy of this state that the continued provision of all or any part of such gas, electric and steam service to all residential customers without unreasonable qualifications or lengthy delays is necessary for the preservation of the health and general welfare and is in the public interest.
Over the years it was clarified to apply to all electric service, whether provided by utilities, ESCOs, or submeterers, it was extended to address shared meter situations and customers of large private water companies, and by regulation, with some modification, its principal features were made applicable to telephone service.
HEFPA addresses matters such as the duties of utilities with respect to the commencement and continuation of service, it limits the use of deposits, it requires budget billing options, it limits the use of back bills and estimated bills, it requires plain language bills, it provides for third-party notices for elderly and other vulnerable customers, it requires utilities to proffer deferred payment agreements before service termination, it creates a hotline remedy for customers at risk of losing service, it limits the interruption of service for bill collection purposes for households experiencing medical emergencies and where the loss of service would aggravate existing serious medical conditions, it provides remedies for tenants whose landlords have not paid for utility service, it gives added protections for households with elderly, blind or disabled customers, increases protections during the cold weather season, and it requires information and referral of customers in arrears who are subject to service termination to departments of social services to obtain assistance.
As can be imagined, all the rights and remedies of HEFPA are not self enforcing. The procedural backbone needed to secure HEFPA rights is he complaint handing function of the Department of Public Service and the Public Service Commission. HEFPA gives speedy recourse into the evening hours to the DPS Emergency hotline (800-343-3377) to aid in negotiation of payment agreements and to halt terminations or require utilities to provide service where appropriate, and the complaint adjudication process of the Public Service Commission, accessible by phone, email, mail, or in person. Public Service Law Section 43.2 requires the PSC to issue a written decision upon the request of a complaining customer regarding nearly any aspect of service, including bill disputes and denials or terminations of service. A customer can lodge a complaint with the PSC without a lawyer by phone or file e-mail complaints involving electric, gas, telephone , water and cable TV service. The PSC has toll free telephone complaint lines available at 1-(800-342-3377). The PSC does not entertain a complaint until the customer has first complained, without satisfaction, to the utility, and in recent years has adopted a policy that requires customers to complain twice before a complaint is counted and a decision is issued, because in the first instance the complaint is kicked back to the utility, even though it has already taken adverse action and has not responded to the customer. Though far from perfect, the complaint handling process helps enforce customer rights and remedies every day, corrects mistaken or wrongful utility actions, can be an aid in monitoring practices of the utilities, and advances the state’s goal of safe, continuous residential utility service.
What happened when LILCO was replaced by LIPA?
The Implementation of HEFPA by LIPA Weakened Complaint Adjudication Rights
LILCO customers on Long Island had available all the substantive and procedural protections of HEFPA, before the advent of LIPA. LILCO was an “electric corporation” subject to HEFPA because Section 30 makes HEFPA applicable to residential service provided by municipalities and electric and gas corporations. That was altered, however, when to reduce rates by 20% through more economical public ownership, LIPA purchased the assets of LILCO. LIPA, however, is an “authority,” and applicability of HEFPA to authorities was not contemplated when HEFPA was adopted in 1981.
Even though LIPA was generally exempted from Public Service Law provisions for PSC regulation of electric companies and municipalities, a special provision addressed the issue of customer protections when LIPA took over LILCO. The Public Authorities Law states
§ 1020-cc. Authority subject to certain provisions contained in the state finance law, the public service law, the social services law and the general municipal law. * * * * The authority shall also establish rules and regulations with respect to providing to its residential gas, electric and steam utility customers those rights and protections provided in article two and sections one hundred seventeen and one hundred eighteen of the public service law and section one hundred thirty-one-s of the social services law.
This language indicates no intent on the part of the Legislature to erode or impair Long Island utility customer rights under “article two,” which is HEFPA, when ownership of the utility shifted to the authority. Indeed, Long Island natural gas customers who receive gas service from National Grid retain the full panoply of HEFPA protection and the right to pursue complaints through the PSC.
When LIPA wrote the regulations required under PAL § 1020-cc, however, it did not give its customers exactly the same rights that HEFPA provides under the PSC complaint handling procedures, which include an initial DPS determination of the complaint and then the opportunity for either an informal review or an in-person informal hearing and decision, and subsequent opportunity to seek PSC review and a final PSC decision. Here is what HEFPA requires in Section 43 of the Public Service Law regarding complaint adjudication:
§ 43. Complaint handling procedures. 1. The commission shall maintain regulations for the handling of residential customer complaints, which at a minimum shall require that each utility or municipality: (a) maintain procedures for prompt investigation of any complaint on a bill for gas or electric service rendered or a deposit required and for prompt reporting to the complainant of the result of such investigation. If such report is made orally, the utility corporation or municipality shall offer the complainant upon a written request the opportunity to receive the report in writing; (b) inform any complainant whose complaint is resolved in favor of the utility corporation or municipality, in whole or in part, of the availability of the commission’s complaint handling procedures; (c) refrain from terminating service for nonpayment so long as a complaint is pending before a utility, municipality or the commission and for fifteen days thereafter, or for such period as the commission for good cause shall establish; provided however, that as a condition of continued service during the pendency of any such dispute, a customer shall pay the undisputed portions of any bill for service including bills for current usage, or such amounts as the commission determines reasonably reflect the cost of usage to such customer; and (d) refrain from treating the disputed portion of any bill as late during the pendency of any complaint before the utility or municipality.
2. The commission shall maintain regulations for complaint handling procedures including complaints with respect to the negotiation of a deferred payment agreement which shall include, at a minimum: (a) provision for investigation and informal review and for appeal to the commission in its discretion; (b) that the burden of proof in all proceedings shall be on the utility corporation or municipality, except as otherwise provided by the commission for good cause; and (c) provision for parties to receive a written determination of any complaint, upon request, in plain and simple English, which determination shall set forth the relevant facts established, the reasons for the determination, what actions must be taken and what further procedures are available to a complainant.
3. The commission shall use its best efforts to complete its investigation and review and to issue, within ninety days, its final written determination of any appeal to it pursuant to this section.
Instead of arranging for PSC adjudication of its customers’ complaints, LIPA adopted rules that created its own complaint handling procedure. Unlike HEFPA, the LIPA rules have no provision for a face to face informal hearing for customers aggrieved by its operating company contractor (National Grid, and soon to be PSEG), Rather, LIPA’s complaint handling procedure provides for written reviews by LIPA only. The LIPA tariff containing the complaint procedures is here.
Last year, when the subject of PSC oversight of LIPA rates was under consideration, LIPA was not put under the complaint adjudication jurisdiction of the PSC. Instead, a new provision was added to the Executive Law §94-A(4) which created a new “mediation” role for the Department of State Utility Intervention Unit. The provision, applicable only to LIPA customer complaints, states:
(b) The utility intervention unit shall have the power and duty to: ****
(iii) accept and investigate complaints of any kind from Long Island power authority consumers, attempt to mediate such complaints where appropriate directly with such authority and refer complaints to the appropriate state or local agency authorized by law to take action with respect to such complaints.
Note that this language does not empower DOS UIU to decide a complaint or take any binding action against LIPA. Rather, if an “attempt to mediate” is not successful, DOS UIU can only refer the LIPA customer complaint “to the appropriate state or local agency authorized by law to take action with respect to such complaints.”
To our knowledge, there is no “appropriate agency” that decides LIPA customer complaints.
The logical agency to do so is he PSC, which has a robust complaint handling system and decades of expertise from continuous interpretation and administration of the relevant law. But under current practice, the PSC does not decide LIPA customer complaints and the benefits of its complaint handling procedures and toll-free emergency Hotline in situations involving imminent or recent shutoff of utility service are simply not available to LIPA customers.
As a consequence, LIPA customers currently lack the full measure of HEFPA protection — what they have have is an internal LIPA process by which LIPA itself reviews contested actions of its operating company agent.
It could be worse…
The Current Proposals for LIPA Reform Do Not Clearly Provide for Complaint Adjudication Under HEFPA
A current proposal for LIPA reorganization has surfaced that again gives short shrift to proteciton of Long Island utility customers:
The governor laid out a proposal Monday that would shift the embattled utility company’s day-to-day operation to PSEG, the New Jersey-based company slated to replace National Grid next year, and would freeze rates for three years, slash LIPA’s staff considerably and reduce LIPA’s debt load.
Essentially, LIPA would become a holding company, but would remain under government ownership for tax purposes and to ensure reimbursement from the Federal Emergency Management Agency (FEMA), the governor said.
The proposal would also impact LIPA’s staff, cutting it from 90 to 20, the governor said, and would slash the number of board members from 15 to five.Cuomo is looking to push the proposal through this legislative session, which ends at the end of June. The top leaders in the state Senate and Assembly gave no indication that they would pass the bill through their respective chambers.
Rashed Mian, Cuomo Announces Proposal For LIPA’s Future, Long Island Press.com, May 13, 2013. WIth the slashing of LIPA staff from 90 to 20, one must question whether sufficient resources will be left for investigation and adjudication of customer complaints from actions of its operating agent.
Looking to the language of the draft LIPA “reform” bill it appears that it would make a dog’s breakfast of utility consumer protection. First, it sets out provisions which completely exempt the operating company hired by LIPA from all Public Service Law requirements of electric companies:
The service provider, however, shall not be considered an electric corporation under this chapter.
The omission of HEFPA rights could have been very easily cured: the LIPA operating agent could be exempted from the obligations of an electric corporation under the Public Service Law, except for those in Article 2 (HEFPA).
Instead, the bill would continue the murky provision contained in existing Section 1020-cc of the existing Public Authorities Law which required LIPA to adopt regulations to provide “its residential gas, electric and steam utility customers those rights and protections provided in article two.” which is the Home Energy Fair Practices Act (HEFPA). As discussed above, any current LIPA staff handling the complaints of its more than one million customers may be decimated, and in any event, the current process is defective, and there is no recourse to binding PSC complaint adjudication and emergency hotline remedies.
But there is more.
The bill would repeal the odd provision recently added to the Executive Law that charges the Department of State Utility Intervention Unit with complaint mediation and referral services with respect to LIPA customers, but then adds an equally strange provision to the Public Service Law, creating a new role for the staff of the Department of Public Service (but not for the Public Service Commission) regarding LIPA customer complaints:
3. General powers. In undertaking the requirements of this section, the department shall be empowered and authorized to:
(e) Accept, investigate, mediate to resolve and make recommendations to the Long Island power authority and/or the service provider regarding the resolution of complaints from consumers in the authority’s service territory relating to, among other things, the provision of electric service provided by the service provider.
DPS would take over the role — currently with the UIU — of investigating and mediating customer complaints, consistent with the role it plays in resolving complaints made by customers of investor-owned utilities.
(a) When necessary information has been obtained, a staff member will make an initial decision on the complaint, based on his or her findings, applicable State laws, commission rules, regulations, orders and opinions, and utility tariffs.(b) Staff shall call or write the customer or his or her representative to inform him or her of the decision, the reasons for the decision, and what actions must be, or may be, taken by the customer or the utility. The utility will be notified of the disposition of the complaint and of any action which it must take. A customer or utility may request a written copy of the initial decision. If the decision is communicated orally, the customer will be informed that he or she may receive the decision in written form.
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