Wednesday, May 06, 2009

Hazel Towers Tenants Ask PSC to Act on Submetering Complaints

The Hazel Towers Tenants Association on May 6, 2009 requested the PSC to halt submetering at Hazel Towers, a former Mitchell Lama project in the Bronx. In 2000, the PSC allowed the owner of Hazel Towers to submeter electricity, normally prohibited by regulations and tariffs, on condition that the owner provide certain tenant protections. These protections include a price cap, HEFPA protection, and incorporation of the terms and conditions of service, including the method of rate calculations and complaint procedures, in the leases. The submetering was implemented seven years later, with the aid of NYSERDA grants using PSC-directed System Benefit Charge revenue. See PSC and NYSERDA Spend Millions for Submetering Projects Violating Residential Tenants’ Rights

Individual tenants living in Hazel Towers complained about a year ago to the PSC Office of Consumer Services (OCS) about implementation of the submetering, violation of the conditions of the PSC submetering order, overcharges, erroneous billing, and noncompliance with HEFPA. They also cited a case where the owner's metering agent brought a lawsuit in state supreme court against a tenant who had protested high submetered charges. PULP successfully defended that tenant. See AMPS, a Submetering Company, Withdraws Request for Court Injunction to Shut off Tenant's Electricity. See also, Under HEFPA, the New York PSC Must Decide Complaints of Submetered Customers.

Hazel Towers then retained Harris Beach, the law firm of a former PSC Chairman.

According to notes in the OCS case file obtained by PULP, the former attorney for Hazel Towers said the new law firm would be brought in because one of its partners, former PSC Chairman William Flynn, had greater familiarity with "our inner workings."

At the time Flynn was barred from appearing before the PSC during a two-year period. Another Harris Beach partner, Joseph Amicone, appeared for the owner, in at least one case making an ex parte submission to OCS without providing a copy to PULP (until after PULP learned of it and demanded a copy). Amicone formerly worked as an attorney in the Governor Pataki's Office of Counsel on energy matters while Flynn was PSC Chairman.

Flynn was appointed by former Governor Pataki to head NYSERDA and later was appointed to head the PSC. While Flynn was at NYSERDA, that agency funded a Submetering Manual written by a consultant from the submetering industry which coaches landlords to avoid the "bothersome" requirements of the Home Energy Fair Practices Act (HEFPA) by evicting tenants rather than terminating service for nonpayment. (A notice of service termination triggers many HEFPA protections such as deferred payment plans and may trigger financial assistance for the needy). During the Pataki administration the PSC attempted to deregulate by exempting ESCOs from HEFPA, allowing submeterers to avoid HEFPA complaint resolution procedures and replace them with arbitrators hired by the landlord, the OCS greenlighted harsh practices of National Grid regarding deposits and service applications, and OCS allowed National Grid to train its complaint case handlers. The majority of the PSC, three members, were appointed by former Governor Pataki.

The OCS did not promptly decide the complaints of the individual Hazel Towers tenants or the June 2008 complaint of the tenants association. OCS is headed by Sandra Sloane, an appointee of Flynn who worked for former Governor Pataki when he was a state senator and for other agencies during the Pataki administration. OCS took no action on Hazel Towers' violations of the rent cap, failure to timely implement the required lease provisions regarding HEFPA protection, complaint resolution, and method of rate calculation. See A Year Passes with No PSC Decision on Submetered Tenant Complaints of HEFPA Violations and Overcharges.

The petition filed today alleges that the stasis in handling of the submetering complaints and failure to fully enforce protections for submetered tenants is due to regulatory capture of the OCS. It asks the PSC Commissioners to find that its submetering order has been violated, to refund charges made in violation of the order, to order a halt in submetering at Hazel Towers, to correct any violations and overcharges before any future submetering is allowed, and to consider bringing a penalty proceeding against the owner.

See Hazel Towers Tenants Association’s Petition for Investigation and Remediation of Noncompliance with Prior Order for Vacatur or Modification of Order Establishing Terms and Conditions of Submetered Electric Service at Hazel Towers and for a Stay .

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

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

In a July 24, 2009 letter, the Secretary to the PSC, who is its ethics officer, reviewed the history of handling of the Hazel Towers complaint by the Office of Consumer Services (OCS) and concluded that "there was no evidence to suggest that the processing of these complaints was purposely delayed by and OCS manager or staff. ... [T]he delays experienced in the processing of the Hazel Towers complaints is attributable to factors such as the overall case load assigned to individual OCS staff members and the prioritization assigned to, and resources and expertise available for, particular types of cases."

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