Tuesday, July 21, 2009

Town House West Tenants Ask PSC to Halt Submetering

Tenants at Town House West, a former Mitchell-Lama project in Manhattan, petitioned the New York Public Service Commission on July 15, 2009 to vacate or modify its prior order allowing the landlord, Stellar Management, to resell electricity to the tenants. The petition alleges
  • Tenants were not properly or timely informed of the submetering plan and of the opportunity and ways to comment to the PSC prior to issuance of the submetering order
  • No charges are due because there is no valid filed tariff or agreed-upon contract for service containing the rates, terms and conditions of electric service, which were required to have been incorporated into THWA Tenants' leases by the PSC's submetering order
  • Complaint procedures required by the PSC submetering order do not comply with HEFPA
  • Proper Notice of Complaint Procedures was Not Provided to Tenants
  • The "No Termination" policy circumvents HEFPA protections
  • Violation of the Rate Cap
  • The owner's scheme for allocation of rent and electric payments, coupled with no complaint procedures and the "deeming" of electric charges as additional rent are a method to displace low income tenants
  • Energy inefficiencies of owner owned and controlled property increase tenants' costs for electricity
  • Tenants received no "shadow billing" prior to implementation of submetering
The DHCR schedule of rent reductions for apartments converted to submetering underestimates usage and price of electricity. As a result, when a landlord sheds responsibility for electric bills and shifts the cost to rent stabilized tenants, the DHCR rent reductions do not come close to offsetting the new charges. Rent stabilized tenants thus suffer out of pocket injury, and those with low or fixed incomes who lack savings or income sufficient to absorb the higher costs may face significant hardship and possible eviction proceedings. See PULP's Analysis of DHCR Rent Reductions for Conversion to Submetering, and PULP Analyzes DHCR Submetering Rent Adjustments.

The PSC has allowed owners to "deem" charges for electricity to be "rent" -- while DHCR does not consider electricity charges to be rent. In effect, the agencies have allowed "rent" increases in excess of the limits of the rent stabilization laws and enabled landlords to threaten eviction to collect unpaid or disputed charges, circumventing the procedures and utility customer protections of the Home Energy Fair Practices Act (HEFPA). This strategy to avoid the "bothersome" utility consumer protection laws and complaint procedures by "deeming" electric charges to be rent and evicting tenants for nonpayment is suggested to landlords in a NYSERDA manual for submeterers.

Tenants are represented by PULP. For more information see PULP's webpage on submetering.

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