Thursday, November 06, 2008

Lax PSC Enforcement of Submetering Orders Allows Landlords to Overcharge for Electricity Sold to Tenants and to Circumvent HEFPA Protections

The PSC's Submetering Regime
Today PULP filed yet another complaint with the Office of Consumer Services of the Public Service Commission (PSC) on behalf of a tenant who must buy electricity from her landlord who was authorized to do so by a PSC submetering order. Ordinarily, only an electric company can sell or provide electricity, but the PSC allows landlords to remeter electricity and sell it to tenants on a case by case basis. See PULP's Web Page on Residential Submetering.

Typically, every PSC submetering order is designed so that, on paper at least, customers will not be disadvantaged and thus would not be aggrieved from this otherwise questionable practice. This is achieved by routine provisions in the PSC orders forbidding the landlord from charging more than the traditional utility would charge, requiring compliance with the Home Energy Fair Practices Act, and requiring lease amendments incorporating the landlord’s obligations into the landlord-tenant relationship. See Residential Submetering Update; Landlords Charging Tenants for Utility Service?

The Bronx Cases- HEFPA, Price Cap, and Lease Violations
Earlier this year, PULP successfully defended a submetered electricity customer when the landlord’s metering agent sued in Bronx County Supreme Court for an injunction to enable a shutoff of her power. The metering agent did not disclose the existence or requirements of the PSC submetering order. After PULP moved to dismiss the case with affidavits and a brief showing the illegalities, the landlord's submetering company withdrew the case. See AMPS, a Submetering Company, Withdraws Request for Court Injunction to Shut off Tenant's Electricity.

Other tenants in the same low-and-moderate income 285-unit building also complained of irregular and high charges, We discovered flagrant violations of the PSC submetering order: the price cap and HEFPA protections had not been incorporated into any of the tenants’ leases, tenants had been overcharged in violation of the price cap, and they had not been notified properly of their right to PSC adjudication of their complaints, which is required by HEFPA Section 43(2). They were also being denied deferred payment agreements, budget billing arrangements, medical emergency protections, and they had not received annual notifications of their rights under HEFPA. We filed complaints on behalf of several tenants and the tenants' association.

Even though the violations of the PSC submetering order can be determined from the face of documents, leases and by comparing the bills with tariffed utility charges, the PSC has not decided the cases. The landlord retained a lawyer from a law firm where a former PSC Chairman now practices law. The lawyer neglected to serve PULP with the papers he submitted to the PSC until PULP reminded him of his ethical duties. The landlord still has not filed a response the complaint of the tenant association on behalf of its members, which was filed in early June, five months ago. The PSC has done nothing to stop the stalling and has not required a response to be filed.

The White Plains Case - Submetering with No Order
In another case, a White Plains landlord has submetered electricity to 312 tenants since 2004 without any PSC submetering order. A tenant represented by PULP complained. The landlord admitted he had been submetering without an order -- a blatant violation of PSC regulations and Con Edison tariffs -- and filed a petition to regularize the practice. That case too has now been pending for months. The submetering continues with no PSC authorization.

No Precedents Enforcing Tenant Rights Under Submetering Orders
PULP's review of PSC complaint determinations has not disclosed the existence of any PSC opinion that decides the complaint of a submetered tenant or enforces the customer protection requirements of its submetering orders. It would appear that the consumer protections written into the orders may have been intended more to ward off legal attacks on submetering and are not really enforced.

The Albany Case
Today's complaint was filed on behalf of a submetered tenant living in a 308 unit low-and-nmoderate income Albany building. Despite the usual PSC verbiage in its submetering order requiring a price cap, HEFPA protections, and lease modifications, the complaint asserts that the landlord is overcharging, has not provided HEFPA notices and protections, and has not modified the tenant’s lease to incorporate these provisions in the landlord-tenant relationship.

Landlord Compliance with PSC Orders Must be Audited
The PSC is failing to enforce critical consumer protections for tenants who under PSC orders must buy electricity from their landlords who are acting as monopoly providers of essential utility service. This system needs to be audited, not only to see if landlords have complied with their utility duties, but also to review the PSC's compliance program, or lack thereof. Future PSC submetering orders need to include a required compliance filing by the landlord which demonstrates actual provision to tenants of their rights under the orders and under the Public Service Law.

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