Bronx Riverview Tenants Ask PSC to Halt Submetering

Tenants at 1600 Sedgwick Avenue in the Bronx, known as Riverview, a 25-story building containing 383 apartment owned by Starrett Corporation, have asked the PSC to halt submetering. According to the New York Times,

Claiming that electricity use is being measured incorrectly and that tenants are being evicted for not paying utility bills, residents of a Bronx apartment building filed a complaint with the New York Public Service Commission on Monday against their landlord's practice of billing residents based on their use of electricity.

The building, at 1600 Sedgwick Avenue, provides project-based Section 8 housing. Before last summer, tenants' rent included the cost of utilities. But in August, the building switched to electrical submetering, making the landlord a middleman between the tenants and Con Edison. The building's management pays bulk rates for electricity, then charges tenants for how much they use. The rent is supposed to be reduced in return.

Libby Nelson, Energy-Billing Practice Raises Tenants' Ire, NY Times City Room Blog, July 20, 2009. See also, NY1 News, Bronx Tenants Claim Faulty Meters Ran Up Massive Bills, July 20, 2009, including video clip.

The PSC issued its Order allowing submetering at Riverview on April 2, 2007. It appears, as is common, that the impact of submetering was not realized until much later, when it was actually implemented.

The Order indicates that NYSERDA would defray the cost of submetering with grants of System Benefits Charge funds. See PULP Network Jan. 16, 2009, PSC and NYSERDA Spend Millions for Submetering Projects Violating Residential Tenants' Rights.

Also, as is typical in such orders, the PSC recites that the owner promises to comply with HEFPA -- but then endorses clumsy evasions of the HEFPA customer protections. For example, the 1600 Sedgwick Order recites a representation of the petitioner that service will not be terminated for nonpayment.

The Applicant states that the building's management will not terminate electric service for non-payment of electric charges.

This sounds benign but is malicious and very dangerous to low-income tenants: the owner uses a court eviction route to displace a tenant who falls behind in paying electric bills. This practice is promoted by the consultant who was petitioner for Sedgwick's submetering order, who also wrote a NYSERDA Submetering Manual for landlords, and the PSC order winks at it. See NYSERDA Residential Electrical Submetering Manual (Oct. 2001). The NYSERDA manual suggests to owners that they just evict tenants for nonpayment of electric bills rather than provide the "burdensome" protections of HEFPA, some of which kick in when advance notice of intent to terminate service for nonpayment is issued:

New York State has extensive regulations in place to protect residents against their electric service being shut off. An owner seeking to continue the tenancy while discontinuing the service will most likely be required to comply with all tenant-protection regulations applicable to utilities for discontinuing the service. These include various notice and payout [Deferred Payment Agreement] requirements and protections for the elderly and disabled, which are time-consuming, burdensome to the owner, and inconsistent with continuation of the rental tenancy. Moreover, special arrangements with respect to electric charges are likely to cause confusion in billing and collection procedures. As a result, owners may want to consider legal action for eviction of the resident or recovery of unpaid amounts as the primary enforcement mechanism for nonpayment of submetered electric charges.

Thus, the NYSERDA manual - written by a consultant to submetering landlords - suggests that HEFPA consumer protections, such as the duty to offer negotiated repayment agreements to customers in arrears can be circumvented by evicting them or suing them in court for unpaid charges. Also, aid may be available for utility bills that is not available in summary eviction proceedings for nonpayment of rent.

It is appalling that the PSC and NYSERDA use System Benefit Charge money -- which they tout as being used to aid the poor -- to help landlords install submeters and add new costs and hardships, and to counsel owners to displace the tenants who cannot afford to pay the new charges. Also, in situations where the owner has an obligation to renew Section 8 leases at reasonable rents to low-income tenants, eviction for nonpayment of electric charges can displace the subsidized tenant and allow the landlord to re-rent the apartment at higher, market rate rents to new tenants. Tenants of another Starrett Corporation Project, Claremont Gardens in Ossining, have alleged in a pending petition that the advent of submetering there has led to displacement of low-income tenants through higher costs they cannot afford and eviction proceedings. See Submetering Challenged at Claremont Gardens in Ossining, PULP Network, May 15, 2009.

The PSC's Riverview Submetering Order also allows the landlord to include outside arbitration of disputes in its complaint handling procedures. Under HEFPA, when a customer's complaint to the provider of utility service is not resolved promptly to his satisfaction, he has a right to have the dispute decided by the PSC complaint adjudication system that can be invoked by customers with a phone call, letter, office visit, or an email or online complaint. There is no room for hired gun arbitrators in the statutory system. See Under HEFPA, the New York PSC Must Decide Complaints of Submetered Customers; Assembly Passes Bill to Correct Diversion of Complaints Regarding Submetered Electric Service.

For further information, see PULP's webpage on submetering.