Oceangate Tenants Ask PSC and DHCR to Halt Submetering and Conduct Environmental Impact Assessment Under SEQRA

The North Bay Tenants Association (NBTA) filed a Petition with the PSC on January 28, 2009 asking the PSC to halt implementation of electricity submetering at Oceangate, a 542 unit high rise Mitchell Lama housing project in Coney Island owned by a Starrett Corp. affiliate.

The Petition asks the PSC to conduct an environmental impact assessment of the submetering action upon the residents of Oceangate under the New York State Environmental Quality Review Act (SEQRA), before any submetering charges are imposed on tenants. A prior PSC Order, issued in 2007, waived the general prohibition against submetering, but the actual implementation has not yet occurred. The premises are heated with baseboard electric resistance heaters.

The PSC gave the owner (a Starrett Corp. affiliate) a waiver of the general rule prohibiting residential submetering in its 2007 Order. The Order was issued without the PSC having known or assessed

• the past cost of electricity at Oceangate
  
• the forecast cost of the portion of electricity bills to be shifted to tenants
• the use of baseboard electric heat without adequate thermostatic controls
  
• whether the structure, fixtures, and appliances of Oceangate are energy efficient,
• the amount of any offsetting adjustment to rents (which have not been set yet by DHCR),
• the amount of any adjustment to housing subsidy allowances received by some but not all of the tenants (which have not yet been set),
• the long term effects on tenants,
• the long term effects on the owner's incentive to upgrade energy efficiency of the premises.

The NBTA Petition to the PSC argues that the conversion to electricity submetering is an "action" covered by SEQRA affecting the human population at Oceangate of more than 1,000 persons, which may have displacement effects when the tenants costs are increased due to submetering. The owner is simultaneously seeking a rent increase from DHCR based on the assumption that the owner pays all electricity costs. Any adjustment of rents after submetering is implemented is undecided. In numerous other projects where the PSC has allowed submetering, rent adjustments and subsidy readjustments have not offset new charges for electricity, creating new financial burdens even for tenants who do their best to conserve, resulting in eviction proceedings of those unable to afford the higher combined costs for rent and electricity. These include at least two other projects owned by Starrett. See Submetering Challenged at Claremont Gardens in Ossining, PULP Network, May 15, 2009; Bronx Riverview Tenants Ask PSC to Halt Submetering, PULP Network, July 21, 2009

In a letter to Brian Lawlor, the Acting Commissioner of the New York State Division of Housing and Community Renewal (DHCR), NBTA asked DHCR not to go any further with its review process of a November, 2009 application by Starrett which asks DHCR to "confirm" submetering at Oceangate. Starrett is also asking DHCRto waive HUD requirements relating to submetering in Section 236 housing projects like Oceangate. DHCR has not yet noticed the Starrett request for a change in the DHCR rules applicable to Oceangate in the State Register. for public comment under the State Administrative Procedure Act.

One of the claimed justifications for submetering is environmental. The tenants argue in their Petition that it should not go forward until the impact on their community has been ascertained under SEQRA. In Chinese Staff & Workers Association v. City of New York, 68 N.Y.2d 359 (1986) the New York Court of Appeals held that displacement of low-income persons as a result of a proposed project is an impact requiring assessment under the SEQRA procedures. The tenants have also asked the PSC to assess the long term environmental effects of shifting financial responsibility for landlord-owned and controlled structures, fixtures, appliances and controls to tenants who lack the power, ability, and funds to make the premises more energy efficient in the future.

SEQRA covers segmented actions like submetering, where multiple agencies are involved, and where a project proceeds in steps that may take several years, without a prior assessment of the impacts. The Petition asks the PSC to vacate or stay its prior order and assert "lead agency" responsibility for conducting the SEQRA assessment.

The Petition also seeks reopening of the case and a stay because

• The PSC Order did not provide adequate notice inviting tenants to comment to the PSC before it acted on the owner's request to waive the general prohibition against submetering,
• The Order allows the owner to treat charges for electric service the same as rent, and evict for alleged nonpayment in court summary proceedings, rather than follow the procedures of the Home Energy Fair Practices Act (HEFPA), such as deferred payment agreements for customers with arrears, and the PSC complaint determination procedure.
  
• The PSC Order allows Starrett to circumvent utility consumer complaint protections guaranteed to residential utility customers by requiring formal written complaints that are decided by a landlord-selected arbitrator instead of the PSC. This clashes with the HEFPA complaint procedure. See Under HEFPA, the New York PSC Must Decide Complaints of Submetered Customers, March 24, 2009.

For further information, visit PULP's web page on residential submetering.