Thursday, July 23, 2009

Parker Towers Tenants Still Waiting for PSC Action on Petition to Halt Submetering

Background - The Tenants' April 20, 2009 Petition to the PSC
On April 20, 2009, the Parker Towers Tenants Association (PTTA) filed a Petition with the PSC seeking investigation of submetering at Parker Towers and a stay to halt submetering of electricity pending the outcome of the investigation. The PTTA Petition, signed by 349 tenants, asks for the following relief:
PTTA believes that Owner's Petition for submetering approval did not fully inform the Commission of the facts, that the Commission misinterpreted or misapprehended or failed to consider issues relevant to the feasibility of submetering at Parker Towers, and that since submetering approval, there has been substantial Owner noncompliance with the Submetering Order. We request that this matter be opened for rehearing and the Submetering Order be stayed or vacated pending an investigation into the reasonableness of submetering at Parker Towers, and if the Commission finds submetering to be reasonable, then an order that it be conditioned upon the following:
a. proper notice to tenants affording them an opportunity to submit comments to the Commission on implementation of any submetering plan;
b. remediation of building-wide energy inefficiencies that are not controlled by
tenants but for which they will bear the cost burden;
c. correction of any double-billing resulting from pre-existing electricity surcharges
embedded into base rents;
d. provision of adequate and timely shadow billing periods prior to actual billing;
e. prohibition of the deeming of electricity charges to be "additional rent",
f. disclosure of and incorporation into the leases the method of rate calculation, the
rate cap, complaint procedures, tenant protections and enforcement mechanisms;
Owner implementation of complaint procedures that comply with HEFPA, and
adequate notice to tenants of these procedures, and of their right to avail
themselves of the Commission's complaint procedures and to receive a written
determination from the Commission on their complaints;
h. Owner disclosure of the rate cap and compliance therewith, together with
disclosure to tenants on each monthly bill the comparable Con Edison SC-1 price
for electric service;
i. Elimination of different rates for different tenants;
j. Elimination of any shared meter conditions;
k. any and all other relief that the Commission deems appropriate under the
For more details, see PULP Network, Parker Towers Residents Petition PSC to Vacate Prior Submetering Order, April 22, 2009.

When the PTTA Petition to the PSC was filed, Parker Towers was temporarily barred from collecting charges under a court order in an unrelated proceeding against the State Division of Housing and Community Renewal, but that order has since been lifted. Parker Towers and its billing agent then began to charge tenants for electric service back to March, 2009, even though it had not provided two months "shadow bills" before then, as required by DHCR bills, and had not created any new agreements with tenants for electric service containing any rates, terms and conditions approved by the PSC.

Referral of the Case to the PSC's Office of Consumer Services (OCS)
The PTTA received no answering papers from the owner of Parker Towers, and the PSC's online electronic docket for PSC Case 07-E-0865 does not indicate any written response from the owner of Parker Towers was filed in answer to the PTTA Petition.

PTTA, now represented by PULP, wrote to the Commission on June 26, 2009 asking for action on the PTTA Petition for a stay of submetering:
The Commission has not yet issued a Notice Establishing Comment Period or taken other action on the Petition. Emergency circumstances have arisen warranting Commission review.

As noted in the Petition, Parker Towers contains 1,327 residential apartments, more than 60 percent of them are rent stabilized, and many of the tenants are elderly, disabled and living on fixed incomes. Under the submetering plan, tenants were to be charged for electricity commencing in April 2009. However, a Temporary Restraining Order was issued on April 14, 2009, which effectively stayed implementation of the New York Division of Housing and Community Renewal ("DHCR") Order Granting Permission to Terminate Rent Inclusion of Electricity and Change from Master metering to Submetering. On June 16, 2009, the Temporary Restraining Order was lifted. Parker Management New York, LLC ("Parker Management"), the management company for Parker Towers, advised tenants on June 22, 2009 that "Parker Towers will immediately proceed with the implementation of its submeter plans and you will be receiving the electric consumption invoices directly from AMPS, our third-party administrator."

PTTA requests the Commission to take immediate action to stay implementation of the submetering plan....
The above letter crossed in the mail with a June 25 letter from the Commission Secretary finding that the Petition was not timely (though the Commission has power under PSL § 22 to extend the time for good cause) and referring the matter to the PSC Office of Consumer Services to be treated as a complaint under HEFPA:
your petition for rehearing is untimely as it was not filed within 30 days of issuance of the above-referenced Order. The issues raised in the petition are more appropriately handled through the Home Energy Fair Practices Act (HEFPA) complaint procedures through our Office of Consumer Services. I am transferring this matter to our Office of Consumer Services Complaint Division for appropriate handling and follow-up.
PTTA responded, making the following points:
Some of the claims in this case involve PTTA's request to revise terms of the Commission's original submetering order issued by the Commission, which, for example, allowed complaint procedures at variance with those required by the Home Energy Fair Practices Act. OCS has no power to revise prior Commission orders. Also, OCS has taken more than one year to make initial determinations in other recent submetering cases; Parker Towers tenants in nearly 1,400 apartments would be substantially aggrieved by such delays.Therefore, we are again requesting that the Commission consider the request to stay submetering, if possible before July 1st, when payment will be demanded by the owner of Parker Towers for disputed charges for electric service. These charges will be deemed to be additional rent subjecting tenants to risks of eviction proceedings when they withhold payment of the charges in dispute.
The Commission has not acted on PTTA's renewed request for a stay, and no written response from the owner of Parker Towers is in the online PSC docket for the Parker Towers Submetering Case. The current posture of the case is that the Petition to reopen the Commission's rulemaking order allowing submetering is not under active consideration by the PSC Commissioners, and instead, the matter is being handled as an adjudicatory complaint proceeding by OCS under HEFPA rules.

Assemblyman Hevesi Asks PSC to Rule on Stay Request
On July 21, 2009, Assemblyman Andrew Hevesi - who resides as a tenant at Parker Towers - wrote to the Commission asking for action:
[I]t is my responsibility to inform you of a conflict of interest I have regarding this petition. I am a resident of Parker Towers and will be personally affected by the ruling of the commission in this matter. With that noted, there are hundreds of my constituents in this apartment complex who have the right to expect their elected official to advocate on their behalf. In this particular matter, the procedures and regulations established by the Commission and the Division of Housing and Community Renewal, which must be followed in all cases of submetering, have not been observed. For that reason, I file this letter in support of the Parker Towers Tenants’ Association’s request for a stay and rehearing, based on the following facts.

The Parker Towers Tenant’s Association has amassed evidence that the building management did not comply with the Commission’s regulations regarding the procedure through which to apply for submetering.... The tenants of Parker Towers were not afforded notice of a timely comment period by the submeterer.... Parker Towers Management ... informational meetings on their submetering plan ... were not held until after the closure of the comment period, shutting tenants out of their ability to comment on these proceedings. This willful exclusion of tenant input violates the intent and purpose of section 16NYCRR § 96.2(b)(5) of the Commission’s regulations.

****Jack Parker Corporation did send three informational notices to residents.... These notices, while within the comment period, did not inform tenants of the timeline for the comment period, the case number that identified their submetering petition to the Public Service Commission, or any information detailing how and where to submit written comments.....

In addition to structuring their notices and meetings so as to shut tenants out of the comment period with respect to their submetering petition, the Jack Parker Corporation also failed to conduct their shadow billing period in a timely and effective manner.... The bills were not provided to the tenants of Parker Towers until long after both of the shadow billing periods had concluded. The shadow billing executed by the Jack Parker Corporation clearly violated the intent of the shadow billing period, thus robbing tenants of the ability to learn about their electricity usage in a timely and effective manner.

As a result of these clear violations of both the letter and intent of the Commission’s submetering regulations, I respectfully request that the Commission stay the implementation of their order to submeter at Parker Towers to consider this evidence, as well as the petition filed by the Parker Towers Tenants’ Association.... The Commission should rehear this case in light of the facts presented here, as well as in the other aforementioned petitions, and then affect a ruling
Assemblyman Hevesi's letter is here.

Summary of Current Situation

As of this writing, as far as we know, the owner of Parker Towers has not filed any written response with the PSC or with OCS regarding the April 20, 2009 petition. (We surmise that Parker Towers management or their counsel or lobbyists have made ex parte contacts with the PSC or its staff, which are not barred under PSC rules). The PSC has not taken action on the merits of the April 20, 2009 Petition, beyond the Secretary's referral of the matter more than two months later, on June 25 , to be handled as a complaint under HEFPA through complaint handling procedures that can take up a year or more for OCS to issue even an initial decision.

In other cases where tenants have challenged submetering, owners appear to have slowed the cases down at OCS, and used the time to correct some of their policies and practices in an effort to avoid decisions on the merits by mooting some of the claims. See PULP Network, Lax PSC Enforcement of Submetering Orders Allows Landlords to Overcharge for Electricity Sold to Tenants and to Circumvent HEFPA Protections, November 6, 2008.

Customers can appeal initial PSC decisions if dissatisfied, by requesting informal administrative reviews or hearings (which can be conducted by telephone), and eventually they can seek decisions of the PSC itself on their complaints, and after that they may seek court relief under CPLR Article 78. Thus, eventually, claims and objections to submetering raised in the PTTA petition and by individuals can be decided by the PSC, and reviewed in State Supreme Court.

PULP has written to the PSC Office of Consumer Services on behalf of PTTA, emphasizing that in addition to other instances of noncompliance with the PSC submetering order, all the charges for submetered electricity are unlawful because the owner has not implemented an essential condition of the PSC submetering order, which required the owner to establish written agreements with the tenants which include PSC-approved terms and conditions for electric service. Without a filed tariff or contracts containing rates, terms and conditions approved by the PSC, PTTA argues, there is no lawful, enforceable contract for electric service to any Parker Towers tenant.

Are All Parker Towers Tenants Protected Against Late Charges and Service Termination if they Withhold Payment for Submetered Electricity Charges Pending Resolution of the PTTA Petition?
It is unclear at this juncture whether the treatment of the tenants' association Petition as a complaint under HEFPA, as directed by the Secretary, now prevents the owner from assessing any late charges or taking adverse action such as service termination against any Parker Towers tenant who withholds payment of the disputed charges for submetered electric service, under Commission Rule 11.20. A utility (including a submeterer, which is defined as a "utility" under HEFPA regulations) may not terminate, disconnect or suspend service for nonpayment based on disputed charges while a complaint is pending, nor impose late charges for any disputed charges, for 15 days after the complaint is resolved by either the utility or the PSC. l6 NYCRR §11.20.

Unlike other agencies, for example, the State Education Department (under 8 NYCRR § 275.2), the PSC has no rules allowing for class action procedures in its administrative hearing procedures. Whether the PTTA complaint confers HEFPA protections over all tenants at Parker Towers, including those who have not signed in support of the petition or made individual complaints, is unclear. A PSC representative indicated at the Submetering Summit held in May 2009 that the Office of Consumer Services might not treat a tenant association complaint as representing claims of any tenants who did not in writing support the association's complaint.

If so, as a result of the referral of the case to OCS as a HEFPA complaint, at a minimum, the 349 people who signed on to the PTTA petition when it was filed do have a group complaint pending under HEFPA which squarely puts into dispute all the charges being demanded from them for electric service.

Tenants who have not signed the PTTA Petition may want to take a cautious "belt and suspenders" approach, file individual complaints, first with the owner, and then with the PSC, to guarantee without any possible doubt that they will be protected under HEFPA against adverse action while their cases are being considered and that they will get the benefit of any favorable decision on the PTTA petition. A sample complaint form regarding submetered service is available from PTTA.

Can the Owner Evict Tenants or Bring Other Court Proceedings Against Tenants who Resist Payment of Disputed Charges for Electric Service?
A possible concern for tenants who withhold payment of the disputed charges for submetered electric service is that while the administrative complaints about submetering are pending at the PSC the owner might attempt an "end run" around the PSC proceedings, and seek to evict tenants in landlord tenant court or sue in court, under a questionable lease provision "deeming" any charges for electric service to be "added rent," before the PSC acts on the PTTA complaint.

Tenants represented by PULP have been successful to date in defending several court actions brought by other submeterers to collect charges for electric service in eviction cases and other court proceedings while those disputed charges are the subject of pending PSC complaints. When PULP has appeared for the tenant and interposed defenses in answers and motions to dismiss, demonstrating that the PSC has primary jurisdiction over the subject matter of disputed charges for electric service, and that the owner has no lawful filed rate or contract for electric service containing rates terms and conditions approved by the PSC, landlords have discontinued the court proceedings in every case. Of course, if tenants do not answer a court case a default judgment may be issued, so it is imperative that they seek counsel promptly if court papers are received and defend the case.

For further information see PULP's webpage on submetering.

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