Citing Delays, PULP Asks for Review of PSC Complaint Handling Process

PULP has asked for a review of the PSC process for deciding utility customer complaints, citing delays in some cases of more than a decade. The PSC consumer complaint process provides for an initial decision by the PSC's Office of Consumer Services, an informal review or hearing, and a final decision by the Commission, usually through a delegated employee. After a final decision is issued, judicial review is available under CPLR Article 78, though the overwhelming number of utility customer complaints begin and end at the PSC.

In a letter sent this week to PSC Chairman Garry A. Brown, PULP pointed out that neither residential nor nonresidential customers are receiving timely action on meritorious complaints. PULP pointed to specific residential and nonresidential customer complaints that languish, undecided, and an assertion of the PSC that resource limitations and priorities in allocation of agency resources mean that complaints cannot be promptly decided.

PULP cited as an example a case involving a dispute over charges due to an allegedly defective Con Edison meter for service to a condominium building. The customer contended that the demand meter implausibly recorded more usage than the total load of the building, even assuming every appliance was on at the same time. Although the case involves no novel issues, it has been pending for more than a decade. PULP observed:

There is a growing perception that when a customer lodges a meritorious complaint and the provider of utility service balks, the response of the OCS and the Commission is a retreat into stasis: rather than decide a matter of significance adverse to the utility, all too often work on the case halts and no decision is issued.

Justice delayed is justice denied

In some situations, the New York PSC has explicitly refused to decide whether providers of utility service acted contrary to law. PULP stated:

There is something terribly amiss with Commission complaint handling procedures when top supervisory staff of the Informal Hearing Unit summarily refuse to perform their duties mandated under Public Service Law and Commission regulations and declare they will not decide if a provider of utility service acted unlawfully.

In effect, the absence of timely PSC decisions allows utility actions challenged by customers to go unreviewed for years.

Administrative agencies under the sway of deregulation fads may subtly morph their statutory complaint adjudication systems into softer mediation services. In this fashion, practical oversight of utilities through correction in the complaint process is diminished by avoiding, abdicating, or minimizing the statutory role of an administrative decider of disputes between utilities and customers. For example, the FCC simply gives up and closes the case when a customer complaint is rejected by a wireless provider, rather than decide the issues raised by the complaint. See GAO Report: Nowhere to Turn -- FCC Not Protecting Wireless Consumers, PULP Network, Dec. 14, 2009.

PULP stated that as a result of the practical unavailability of any timely check on the utilities through the New York PSC customer complaint process, "[t]he Commission, through its failure to timely review and decide the validity of disputed utility actions has created, in effect, a de facto customer service regime of total deregulation."

The letter asks for a full review of the PSC complaint process, to identify causes and remedies for the delays.

AARP Urges State Senate to Save PULP

Governor Paterson omitted PULP from his budget proposal, again making it essential for the state legislature to add appropriations that would ensure PULP's survival. See State Budget Impasse Threatens PULP's Future, April 9, 2010.

This week, AARP New York State Director Lois Aronstein wrote to State Senate Conference Leader John Sampson urging the State Senate to ensure adequate funding for the Public Utility Law Project (PULP), as a "partner we rely on to better serve our millions of members." The April 20, 2010 letter states:

We are greatly distressed that the on-going state budget process in the Senate has not yet included any funding to support PULP for the fiscal year which began on April 1st. The Legislature has included PULP funding every year since 1981 and must continue to do so to maintain the vital services offered by PULP.

If the State does not fund PULP at a sustainable level, the organization will be forced to close its doors. As a result, New Yorkers will lose an advocate who represented their interests in many important proceedings on behalf of seniors and low-income consumers. Without affordable utility services, we expect to see many low-income families and seniors go without light and heat and the ability to contact emergency services, any of which may lead to homelessness and other hardships.

I strongly urge you to include adequate funding resources for PULP in the state budget currently under negotiation. It is essential that PULP is able to continue to assist the neediest New Yorkers and remain a committed partner with AARP on these essential and fundamental issues.

Short term funding extenders state agencies requested by the Governor are being passed by the Legislature, but these do not affect funding for PULP and many other state-funded nonprofit organizations.

At week's end, there was still no indication when or if the budget impasse will be resolved.

This year's legislative session is currently scheduled to end on June 21, 2010.

PSC Tells FCC to Require VoIP Providers to Pay to Access Local Networks

In brief comments submitted to the FCC on April 2, 2010, the New York State Public Service Commission (“PSC”) stated its opposition to positions taken by Global NAPS defending its refusal to pay access charges to carriers that terminate its traffic. Global NAPS maintained that because it is a Voice over Internet Protocol (“VoIP”) provider, like the voice services offered by the cable companies, federal law has preempted states from applying access charges to it.

The PSC correctly (in PULP’s view) argued that VoIP is a telecommunications service subject to access charges: “every carrier is obligated to pay a terminating carrier for the use of its network.” It went on to note that granting Global NAPS' request would “undermine[] our ability to develop fair and balanced telecommunications policies” when competing sets of rules apply to competing providers. The PSC cited to an ongoing state proceeding involving Global NAPS where it refuses to pay a small competitive local exchange carrier to terminate traffic from its customers. The local carrier has now asked the PSC for permission to block incoming traffic from Global NAPS because the company continues to not pay. As a result, the PSC is seeking a declaration from the FCC that it is imperative to “treat[] traffic that is functionally equivalent to similar pricing rules.”

Now the PSC needs to apply this philosophy to more than just access charges. Why should VoIP providers, including the cable television companies which offer voice services which have captured nearly half of the local exchange market in the state, be exempt from the PSC’s consumer protections, service quality standards, and regulatory assessments – which apply to the incumbent carriers? PULP supports reasonable consumer protections and service quality standards that apply to all providers along with consistent regulatory assessments for all providers. See

• VoIP Phone Providers to Start Collecting E-911 Surcharge;
• PSC Tells FCC to Permit States to Assess VoIP for State Universal Service Funds;
• Staff Report Released after State Senate Hearing on Telecom Taxes; Acknowledges Need for Consumer Protections for Telecom Customers;
• PULP Testifies at State Senate Hearing on Telecom Taxes.
  

On March 31, 2010, the US District Court for the Southern District of New York issued a decision in Manhattan Telecommunications Corp. v. Global NAPS, Inc. that Global NAPS owed a different competitive local exchange carrier in New York for accessing its network to terminate calls and must pay them at the local carrier’s federal access rate. The Court rejected Global NAPS' argument that it is exempt because it is a VoIP provider.

The tide may be beginning to turn.

Lou Manuta

Legislative Allocation of the $187 Million RGGI Revenue from Sale of Greenhouse Gas Allowances

In light of the Governor's failure to make any provision for PULP in his proposed budget, and in light of the current tight budgetary situation facing New York State due to a falloff of revenue during the recession, and due to the late state budget, the future of PULP is in jeopardy. See State Budget Impasse Threatens PULP's Future, PULP Network, April 09, 2010.

A small portion of the newly created $187 million/year stream of funds from the sale of carbon allowances in the "Regional Greenhouse Gas Initiative" or RGGI program is a logical potential source of funding that could be tapped for financial support of PULP. Appropriating a small part of the RGGI funds to support PULP's advocacy for low-income energy and utility customers is not inappropriate, inasmuch as RGGI is adding to the high cost of electricity in New York state and hence adding to the financial burdens of low-income households.

An April 19, 2010 decision of the Public Service Commission discusses how a significant part of the RGGI funds are not yet appropriated, how the use of RGGI funds is currently decided by NYSERDA, and illustrates how the legislature could further direct their use.

Background
The SBC. As a consequence of agreements with utilities to restructure New York's investor-owned electric utilities in the 1990's, the New York State Public Service Commission (PSC) created a "System Benefits Charge" or "SBC." It is a surcharge on electric bills, the proceeds of which are sent by the utilities to NYSERDA to support energy efficiency programs under PSC oversight. The SBC is pnow yielding $175 million/year in revenue.

The EEPS. During the Spitzer/Paterson administrations, a new goal was set to reduce growth of the State’s electricity consumption. To move toward that goal, the PSC began an additional initiative known as the "Energy Efficiency Portfolio Standard" or "EEPS." The EEPS allows utilities to collect additional money from customers, through utility rates, to finance more energy efficiency programs, some of which are administered by NYSERDA and some of which are administered by the utilities. This encourages major investor-owned utilities to enter the energy efficiency line of business, in which they recover all the EEPS program costs from ratepayers, and more. According to a January 2010 PSC press release, EEPS program funding is as follows:

• Consolidated Edison Company of NewYork, Inc., $235.8 million;
  
• National Grid (upstate), $147.7 million;
  
• National Grid (downstate), $39.9 million;
  
• New York State Electric and Gas Corporation, $31.7 million;
  
• Rochester Gas and Electric Corporation, $20.1 million;
  
• Central Hudson Gas & Electric Corporation, $19.6 million;
• Orange and Rockland Utilities Inc., $14.3 million;
  
• Corning Natural Gas Corporation, $0.2million; and
  
• St. Lawrence Gas Company, Inc., $0.08 million.
  

The RGGI
New York joined with nine other Northeast states during the Pataki administration in creating the "Regional Greenhouse Gas Initiative" or RGGI. This was an effort, in the absence of adequate federal programs, to reduce greenhouse gas emissions from electric power plants by means of a cap and trade system. As a result, NYSERDA is now receiving substantial auction revenue from the sale of RGGI allowances to power producers that emit carbon dioxide.

PSC Denial of Multiple Intervenors' Petition
Multiple Intervenors (MI), an association of large industrial, commercial and institutional electricity customers, filed a petition for a declaratory ruling from the PSC, arguing that the new major funding stream from the sale of RGGI carbon dioxide emission allowances justifies reduction of the existing EEPS surcharges, because the RGGI money could supplant them. As summarized by the PSC:

MI proposes that EEPS funding be reduced in proportion to RGGI proceeds to reduce the burden on ratepayers and avoid duplication of funding and programs. Specifically, MI requests that the Commission issue a declaratory ruling to reduce the approved annual EEPS funding from approximately $330 million to approximately $110 million.

In its April 19, 2010 decision, the PSC declared that it sympathized with MI, saying "[w]e share MI’s concerns" about overlapping energy efficiency programs, but denied the MI petition.

NYSERDA, Not the PSC Controls the RGGI funds.
The PSC pointed out that under the RGGI arrangements, the PSC lacks power to redirect the use of the RGGI funds. Thus, even if the PSC wanted to use RGGI money instead of money collected from utility customers for EEPS programs, it could not effectuate that result, because NYSERDA controls the RGGI money:

[B]oth the New York State Department of Environmental Conservation (DEC) and the New York State Energy Research and Development Authority (NYSERDA) have adopted regulations governing the implementation of RGGI.... Each year New York issues a number of tradable allowances: one allowance permits the emission of one ton of CO2 for one year, to cover electric generating units that must obtain allowances equal to their CO2 emissions within a three-year compliance period. These allowances have been sold at auction, in a process managed by NYSERDA and described under DEC and NYSERDA regulations.

The proceeds generated by these auctions are managed from a NYSERDA account and disbursed solely by NYSERDA pursuant to its Operating Plan and regulations.

The 2009 NYSERDA Operating Plan stated its RGGI-funded programs

are designed to create synergies with existing efficiency and clean energy programs and encourage redefinition of program goals in the context of a more comprehensive climate change strategy.

Legislative Action Can Redirect RGGI Funds.
The PSC observed that although the RGGI scheme puts NYSERDA nominally in charge of spending the RGGI auction proceeds, legislative action can also steer the use of RGGI money. The PSC cited examples in the past year where the Legislature exercised its powers to appropriate RGGI funds:

Since the commencement of the RGGI auctions, the resultant proceeds have been tapped or otherwise encumbered for a variety of uses other than those intended by the Operating Plan****

On October 13, 2009, the Green Jobs/Green New York bill was signed into law, directing NYSERDA to establish revolving loan and green jobs training programs to retrofit existing homes, using $112 million of RGGI auction proceeds to leverage private investment****

Finally, on December 4, 2009, the New York State Legislature enacted numerous deficit reduction measures that included the transfer of $90 million in RGGI auction proceeds to the General Fund****

The proceeds from RGGI, and their uses, remain to some extent uncertain, if not speculative. Indeed, in the March 2010 Revised RGGI Operating Plan, NYSERDA revised downward the estimates of program funding available through March 2012, from $525 million to $302 million****

As indicated by the last year’s allocation of RGGI proceeds, those funds are subject to redistribution for a wide range of purposes by the legislative and executive branches, not all related to energy efficiency.

The PSC rejected the effort of MI to reduce the EEPS program charges paid by utility customers, stating:

MI seeks . . . to have the Commission reduce EEPS collections from customers, in anticipation that the same purposes would be achieved using RGGI funds for energy efficiency. However, MI also argues that it should be mandatory that those auction proceeds be used to offset the incremental costs of EEPS to electricity consumers. This relief is unavailable in a declaratory ruling by this Commission, as the operation of RGGI and the allocation and disbursement of RGGI funds are governed by NYSDEC and NYSERDA regulations.

Conclusion
The current NYSERDA Operating Plan for use of RGGI funds was adopted April 27, 2010. It anticipates RGGI revenue of approximately $187 million per year through 2012. The recent PSC decision makes it clear that any change in how RGGI money is used must come from the Legislature.

Budget “Extenders” Won't Solve Non-Profits' Problems Due to Late State Budget

According to today’s Albany Times Union, in the absence of any budget for the 2010 – 2011 New York State fiscal year that began more than two weeks ago, Governor David Paterson is drafting “extenders” of the current year budget. There is also movement in the Legislature to add funding into the extenders to keep state parks open, according to the Times Union article. Stop-gap measures for interim funding of state agencies would keep them functioning, but these are not even a temporary solution for many not for profit organizations that largely depend on state appropriations, like the Public Utility Law Project of New York (PULP).

During late budget periods such as this, many not for profit organizations must adopt harsh austerity measures, live on credit, struggle to continue operations, and take the risk of continuing their services without reimbursement, in anticipation of continued funding. The Times Union reported earlier this week on PULP’s plight. Unfortunately, the situation has not improved in the ensuing days. As PULP reported last week:

if the State does not fund PULP at a sustainable level, New Yorkers will lose the ability of PULP to participate fully in many important proceedings on behalf of low income energy and utility consumers. Without energy and utility service, low income families will go without light and heat and the ability to contact emergency services, any of which may lead to homelessness and other hardships. . . . Since its inception more than 29 years ago, PULP has been instrumental in promoting universal service, consumer protections, and affordability for New York’s residential utility customers, achieving many milestone accomplishments with lasting value.

Although the state legislature has appropriated funds for PULP each year since our founding in 1981, the future is clouded because the Governor again did not include any appropriation for PULP in either his proposed budget in January or in any bill extenders, and the State Senate has yet to take any action to continue funding for PULP. See PULP Network, State Budget Impasse Threatens PULP's Future, April 9, 2010.

Gerald Norlander
Executive Director

State Budget Impasse Threatens PULP's Future

Each year since 1981, the New York Legislature has appropriated funds to support the Public Utility Law Project of New York (PULP). Although small foundation grants and charitable donations occasionally supplement PULP's funding, the reality is that the State remains the primary source of PULP’s funding.

One of the alarming consequences of the unresolved New York State Budget for 2010 – 2011 is the absence of future State funding for PULP in the budget proposals of the Governor and the State Senate. The latest problems may be more serious than those caused by the chronically late state budgets during the Pataki years, which led to furloughs and serious hardship for PULP and its employees.

This year, the financial situation is particularly dire because:

(1) PULP's funding has been frozen for nearly a decade;

(2) The purchasing power of the grants is less than half of what it once was; and

(3) There has been a commensurate reduction of staff and resources to work on behalf of New York's needy utility consumers.

In fact, in 2009, due to the inadequacy of the long frozen budgets, PULP halted contributions to its employee pension plan and undertook other austerity measures.

What is the real impact of PULP’s funding crisis for New Yorkers? In a nutshell, if the State does not fund PULP at a sustainable level, New Yorkers will lose the ability of PULP to participate fully in many important proceedings on behalf of low income energy and utility consumers. Without energy and utility service, low income families will go without light and heat and the ability to contact emergency services, any of which may lead to homelessness and other hardships.

Despite its reduced staffing and resource limitations, PULP has continued to make significant contributions, for example:

• Reforming practices and policies causing hardship and displacement of low income tenants when submetered electric service is provided by their landlords;
  

• Winning reconsideration of New York State Public Service Commission (“PSC”) plans for the addition of a new area code in the 315 area, avoiding unnecessary expense and inconvenience for over one million people;

• Raising concerns in the National Grid/Niagara Mohawk natural gas rate case about inadequate low income rates and customer assistance programs;

• Advocating for fuller utilization of Lifeline discount telephone service;
  

• Seeking vindication of a tenant water user's due process rights when she was refused service unless she paid her landlord's debt for past service; and

• Providing daily guidance to consumers and advocates across New York State on enforcement of Home Energy Fair Practices Act (“HEFPA”) rights, utility assistance, and prevention of utility terminations.

Since its inception more than 29 years ago, PULP has been instrumental in promoting universal service, consumer protections, and affordability for New York’s residential utility customers, achieving many milestone accomplishments with lasting value. These include:

Home Energy Fair Practices Act ("HEFPA"). This law, and its implementing regulations, is considered a national model utility consumer "Bill of Rights" and is applicable in New York State to 5.6 million residential electric utility customers and 4.1 million residential gas utility consumers. PULP is the architect of the law and vigilantly monitors its enforcement.

Low Income Electricity Rates PULP was an active party in the PSC proceeding and signatory to a global settlement that for the first time established low income rates for the residential electricity customers of a major New York utility. These rates currently provide an approximate $6 per month savings to 240,000 or 9% of its customers, or more than $17 million per year in discounts. Since 2000 when low income rates were established for this utility, almost all of the major residential electric utilities have adopted some form of low income rates.

Low Income Gas Rates PULP advocated in a 2007 PSC proceeding that brought the first ever low income rates to Long Island residential gas customers, and in two proceedings that expanded low income rates for residential gas customers in metropolitan New York and Buffalo.

Energy Consumer Protection Act and ESCO Marketing Regulation. PULP was an active party in the PSC proceeding to implement the 2002 HEFPA amendments to preserve and enhance utility customer protections when customers switch to Energy Service Company (“ESCO”) service, including the extension of HEFPA protections to transactions between residential customers and ESCOs. PULP is an active party in an ongoing PSC proceeding reviewing ESCO marketing practices and advocating more stringent standards.

Reform of Residential Utility Security Deposits and Service Denials to Collect Past Arrears. PULP successfully challenged a major utility's proposal to modify its policies on security deposits, resulting in a PSC ruling incorporating the following provisions: (i) security deposits cannot be assessed against customers who have entered into deferred payment agreements to satisfy arrears; (ii) customers who have not had service in their name within the past 60 days cannot be assessed security deposits; and (iii) a default in a security deposit payment will not automatically result in a default on a deferred payment agreement. The ruling affects any of the utility's 1.9 million customers who fail within its parameters. Also, PULP initiated a PSC proceeding and successfully challenged a major utility's untariffed requirement that applicants for residential service with arrears from a prior account pay, as a condition of service, the full amount of the arrears or $1,000, which many could not afford. In March 2008, the PSC ordered the utility to discontinue this practice. The utility serves 1,311,422 electricity and 1,958,748 gas customers.

Telephone Lífeline Program. PULP is negotiating with a major telephone service provider to improve participation in Lifeline automatic enrollment, and to end restrictions preventing Lifeline-eligible customers with service package bundles from enrolling in the Lifeline program. This would bring Lifeline service to an estimated additional 100,000 customers.

Proceeding to Examine Issues Related to a Universal Service Fund. PULP is a participant in proceeding examining the future of service in high cost areas of the state and discount programs for low income households. PULP is actìvely supporting having Voice over Internet Protocol (primarily the voice services provided by cable companies) and wireless providers contribute to state universal service funds and to expand low income support to broadband access. An estimated 560,000 low-income New Yorkers would benefit from expanded broadband access at affordable prices.

Submetering of Electric Service to Residential Tenants. PULP presently represents hundreds of tenants in low income (Mitchell-Lama and HUD) and other residential rental buildings that have undergone conversion from master electricity metering (electricity included in the rent) to submetering (tenants receive monthly electric bills). Efforts to date have

• Achieved refunds of more than $20,000 in electricity overcharges to 286 tenants in the Bronx;
• Won a three-month reprieve from submetered electricity charges for 50 tenants in Manhattan and a five-month stay of implementation of submetering for 542 HUD-subsidized tenants in Brooklyn, pending resolution of the tenants' petition to permanently halt submetering;
  
• Assisted tenants in winning a ruling from the PSC requiring a landlord to halt submetering of electrically heated premises, pending review of tenants' electricity costs, sufficiency of efficiency measures, adequacy of utility allowances, and demonstration that tenants are not disadvantaged financially;
  
• Is seeking rehearing of a PSC decision allowing submetering of electric heat at a 342 unit Yonkers apartment building with many low-income households;
• Obtained refunds of electric charges paid by approximately 448 fair market tenants in a Queens building, who should not have been charged for electric service until their leases renewed;
  
• Obtained PSC rulings affecting 1,613 tenants in Queens and the Bronx that electricity charges cannot be “deemed” to be “additional rent," a mechanism designed to displace low income tenants and circumvent HEFPA;
• Obtained PSC rulings affecting 2,446 tenants in Albany, Queens, The Bronx, and Yonkers requiring landlords to revise residential electric service complaint procedures to comply with state law and to annually notify tenants of their rights under HEFPA;
• Obtained a PSC ruling affecting 286 Bronx tenants requiring the landlord to notify tenants of the availability of a low income rate for electric service; and
• Uncovered and ended unlawful electricity submetering in a White Plains building housing 311 residential tenants.

Consumer Education. PULP publishes a Utility Law Manual as a guide for advocates on utility and energy law issues, available on its website. PULP also conducts training conferences on preventing utility terminations and the rights of utility consumers and develops accredited Continuing Legal Education programs.

PULP Website. PULP maintains an active website with information on topics relating to utility, telecommunications, and energy-related matters. The PULP website is repeatedly cited as a source of information on energy and telecommunications issues in New York State and at the federal level.

PULP EMail News. PULP publishes a weekly E-Newsletter circulated to a growing mailing list of more than 1,200 advocates, legislators, legal services attorneys, clients, former clients, media and other interested parties. The E-Newsletter frequently links to the PULP Network Blog.

PULP Hotline. PULP maintains a toll-free Hotline at 1-800-255-PULP (7857) to provide free consultation to advocates and individual consumers. PULP's target population is the approximately 2.7 million New Yorkers living in approximately 1.5 million households who are eligible for low income Home Energy Assistance and their advocates in local organizations providing social and legal services to them.

Let us be clear: Who else is engaged in protecting the rights of low income utility and energy consumers across the state other than PULP?

Unless members of the New York State Senate and Governor Paterson join in the effort to fund PULP at a sustainable level, the services PULP provides will come to an end in 2010 – and there is no alternative entity which can replace PULP and its vital, independent services.

Gerald Norlander
Executive Director
Public Utility Law Project of New York, Inc.

Update
Larry Rulison, Cuts could pull plug on voice for poor, Albany Times Union, April 13, 2010

Warm Winter and Lower Prices Ease Heating Bills for Gas and Electric Customers, while Oil and Propane Users Suffer from Higher Prices

The recent warm spell and snow melt got us thinking about how the winter stacked up in comparison to normal heating seasons. NYSERDA' s Heating Fuels Report for March 29, 2010 reports indicate that this year New York had a warmer than normal season.

The warmer weather obviously helped in meeting the cost of home heating, particularly downstate. There have been 8% fewer heating degree days in the New York City area, and about 3% fewer in Albany and Buffalo.

The weather effects, coupled with lower commodity prices for those who heat with utility natural gas or electricity, undoubtedly helped consumers during the current recession, when many New York households have members who lost their jobs and have less income to make ends meet.

Households in the North Country, however, where many households are inadequately insulated and heat with fuel oil or propane, are still seeing prices 27% and 20% higher than last year, respectively. The higher prices they pay for these fuels offset any benefit of their slight reduction in heating degree days.

The Home Energy Assistance Program (HEAP) is still open for eligible households in need of energy assistance.

Passion for Electricity Submetering in Subsidized Housing Cools in Toronto

Diminishing Emphasis on Submetering
Toronto, Ontario has approximately 1,000 concrete slab apartment towers built from the late 1950s to the early 1970s. This concentration of brutalist structures is second only to the New York City area in North America. Similar to New York, with its Mitchell-Lama and HUD-funded projects, some of the Toronto buildings were constructed to provide affordable housing to lower income households, and some have electric heat. At the time the buildings were constructed, energy efficiency and insulation were not high priorities: electric heat was the cheapest to install, electric rates had been declining for decades until the early 1970's, and there was an expectation -- too optimistic as it turned out -- that even cheaper electricity from new nuclear power plants was just over the horizon.

Instead, electricity prices rose over time, faster than other costs, and the buildings became saddled with high energy costs. A few years ago, the reintroduction of submetering was seen as a solution by New York landlords facing volatile and rising electricity prices as a way to stabilize their revenues by shifting the risk of increasingly volatile electricity prices to tenants. Also, in some situations, imposing additional electricity costs on subsidized low-income tenants by deeming the utility charges to be "rent" may have become a convenient way for landlords to pressure them out and re-rent the premises at market rents.

The essence of submetering is a shift from the owner to the tenant of the cost of electricity. From a policy perspective, however, giving tenants the electric bills when they neither own nor control the fundamental factors driving consumption is questionable. It diminishes incentives for owners to replace their inefficient appliances, fixtures and controls, or to improve thermal efficiency of the structure itself, for example, with added insulation. And there is no reliable evidence that shifting bills to tenants results in lower usage, even though submetering is often claimed to be justified on this basis.

The Social Housing Services Corporation, a non profit organization that provides consulting and support services to owners of subsidized housing projects in Ontario, is now recommending a more cautious approach to "suite" metering (submetering) of master metered buildings, and a more comprehensive approach to energy efficiency than simply passing the bill responsibility to tenants:

SHSC prepared a report titled Smart Meters and Social Housing: Energy conservation and energy poverty issues on the potential installation of smart meters in all social housing properties by 2010, as mandated by the provincial government. The concerns raised in the report can be summarized as follows:

• Smart meters may be very costly to install in older social housing buildings and the cost of doing so will be borne by low income tenants and/or cash-strapped social housing providers in the form of higher monthly administrative fees
• time-of-use(TOU) pricing penalizes seniors, disabled and poor residents who live in electrically-heated units (a significant portion of social housing units) or who must access peak-priced utilities for health reasons
• Suggested time-of-use pricing penalizes the poor by charging peak prices for an additional hour of use in the winter than the summer. This is because social housing residents are more likely to rely on winter electric heat while Ontarians with higher incomes are more likely to have access to summer air conditioning.
• The transfer of utility costs to tenants will have a negative impact social housing providers in terms of a) absorbing the additional administrative fees required with individual tenant billing systems compared with bulk purchasing, b) reduced marketability of some units that are electrically-heated, ground floor or northfacing, c) possible defaults by tenants on utility payments or rents and/or unsafe heating practices d) difficulties in attracting tenants due to high deposits requiredby utilities in individually-metered units
• The recent Ontario Energy Board Smart Price Pilot Final Report does show some success in reducing monthly electricity consumption. The majority of the reduction was due to improving energy efficiency in the household and a small amount due to load-shifting to off-peak times. The average monthly savings of $4.17 are negated by the approximate $3.80 monthly fee to pay for the installation and maintenance of the meter. It is also risky to generalize from this study to the general population, as the majority of the participants were homeowners with incomes over $50,000 per year and presumably better able to afford energy-saving measures and shift their peak use.

Early smart meter installation may expose social housing providers to unintended consequences, Social Housing Services Corporation.

SHSC’s current position is that social housing can meet Ontario’s conservation targets through a strategy of energy efficient retrofits and incentives, and focused staff and tenant education programs – without the use of smart meters, time-of-use pricing, or a shift to a 100% tenant-pay model.

The Tower Renewal Project
The Mayor's Tower Renewal Project in Toronto is now focusing on rejuvenation of its concrete slab high rise housing:

The Greater Toronto Area contains a heritage of nearly 1000 post-war concrete residential tower blocks located throughout the region. The presence of this remarkable collection of modern housing represents an architectural, planning and construction legacy unique to North America.... This inheritance of high density neighbourhoods provide significant opportunities to create a sustainable, prosperous and connected region, able to meet the challenges of the 21st Century; accommodate growth, alleviate poverty and help grow the green economy.

A comprehensive revisioning and reappreciation of the buildings, including improvement of their energy efficiency, is now underway:

[T]he City of Toronto through the Mayor’s Office is implementing the Tower Renewal Project, a building upgrade, community reinvestment and greening incentives programme, which aims to significantly improve the social, economic and environmental sustainability of the region.

Consisting of durable concrete buildings and large areas of under utilized open space, these building represent a remarkable resource. Green building and site upgrades are anticipated to reduce energy use and greenhouse gas production by over 50%, while the sites themselves can accommodate needed community services, usable open space, retail, and housing; enabling vibrant neighbourhoods and sustainable communities. * * * *

Key Goals Include:

1 - Achieving significant reductions to greenhouse gas emissions in the Toronto region through ‘green’ investment into high-rise concrete residential buildings such as the thermal over-cladding, adding energy saving and renewable features to their site such as district solar, wind and geothermal power, developing on-site waste management and urban agriculture, along with providing improved access to public transit and other alternatives to car use.

2 - Creating ‘complete communities’ within inner suburban high-rise apartment neighbourhoods with the full range of community services and amenities, opportunities for employment and entrepreneurship, and housing types and tenures, specific to the needs of residents, responsive to built and cultural heritage, integrated into the community at large, and enabling sustainable lifestyles.

3 - Further developing world-class Canadian industries dedicated to high-quality building retrofits, sustainable development, and community design.

ERA Architects, Tower Renewal Project Blog.

Perhaps one day the New York Public Service Commission and NYSERDA will stop being used by landlords to evade responsibility for inefficient premises through submetering, enlarge their horizons, and push for what Toronto has begun to do to reshape their valuable large housing project assets.

As Poverty Continues its Tight Grip on New York State, Utilities Increase Interruptions of Electric and Natural Gas Service to Collect Bills

Poverty in New York State
The 2010 New York State Poverty Report issued March 17th by the New York State Community Action Association shows that the level of poverty is virtually unchanged from last year. Because poverty is defined at the family level and not the household level, the poverty status of a household is determined by the poverty status of the householder. Households are classified as poor when the total income of the householder's family in the last 12 months is below the appropriate poverty threshold. The poverty thresholds vary depending upon three criteria: size of the family, number of children, and, for one- and two- person families, age of the householder.

With a statewide population of 19,428,881, 2,603,930 New Yorkers lived in poverty during 2009, representing 13.8% of the population. On a county-wide basis, the percent of the population in poverty ranges widely, from 4.6% in Nassau County to 27.8% in the Bronx, with 6.4% of children in Saratoga Springs living in poverty and 47.7% of children in Utica living in poverty. These statistics are virtually unchanged from last year.

These poverty statistics do not track the state’s unemployment numbers, which tend to follow economic conditions and trends. For example, the NYS Department of Labor reported an employment rate in 2006 and 2007 in the mid-four percent range. This increased to 5.3% in 2008 and jumped to 8.4% in 2009. So far for 2010, unemployment is holding steady at just over 9% . While the poverty statistics were virtually unchanged in 2008 and 2009, the state did experience a surge in unemployment, as did the rest of the nation. What this means is that poverty statistics for 2010 may trend worse than 2009.

Utility Service Interruptions Increasing
With a significant percentage of the state’s population not being able to make ends meet, we checked to see whether the number of utility service interruptions performed as a bill collection measure increased in 2009. To get the data, PULP made a Freedom of Information Law (“FOIL”) request to the New York State Public Service Commission (“PSC”) in order to receive 2009 termination data from the state's nine major investor-owned electric and natural gas utilities (Central Hudson, Con Edison , KeySpan Energy Delivery Long Island, KeySpan Energy Delivery New York, National Fuel Gas, National Grid, New York State Electric & Gas, Orange & Rockland, and Rochester Gas & Electric). It is unclear why the service interruption data is not made publicly available by the PSC on a regular basis. The termination statistics should be posted on the PSC’s webpage, along with the complaint statistics, which are made available.

The termination statistics are devastating.

According to the materials received by PULP from its FOIL request, in 2006, utility service to 237,401 customer households was interrupted for bill collection purposes by the nine utilities. This number grew to 249,401 in 2007, 310,369 in 2008, and 329,650 in 2009. In total, service was interrupted deliberately for over 1.1 million customer households across the state since 2006. While this figure would include some households terminated on more than one occasion, it can not be denied that this is a significant figure. According to the US Census Bureau, there were just under eight million households in New York State on July 1, 2008. Accordingly, a fair estimate is that utility service was interrupted to about 12.5% of the state's households in the past four years for non-payment, slightly less than the state’s poverty rate.

With an average household size of 2.65 persons, deliberate utility service interruptions for bill collection purposes affected nearly three million New Yorkers in the past four years. Service interruption creates severe hardship and disruption of ordinary family life. These service interruptions create havoc in the lives of the poor and increase the risk of tragic events when people resort to less safe solutions to meet their energy needs. See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low Income Households, PULP Network, September 5, 2006; No Electricity: Middletown Residents in Critical Condition from Lantern Fire, PULP Network, October 19, 2008.

Notwithstanding the New York PSC's PR efforts, the service interruption statistics indicate how poorly the utilities and their regulator, the PSC, are doing to fulfill the policy declared in state law (HEFPA) that continuous residential electric service is in the public health, welfare and public interest of all the people of the state. It appears from the statistics that while utilities are easing up on service interruptions to collect bills in cold weather, they are adopting much harsher measures to make massive use of service termination in Springtime. In the coming months we may again see huge wave of service interruptions, greenlighted by the PSC.

• What is the PSC doing to reduce the number of service interruptions?
  
• Has the PSC Hotline, which can head off terminations by directing utilities to continue service in appropriate cases, been adequately publicized to customers?
  
• Has the Hotline staff and function been eroded to the point that it acquiesces too often to the rigid demands of utilities for payment amounts far beyond the reach of customers trying to maintain service?
• How many terminations were greenlighted by the PSC Hotline?
  
• How many of the New York households affected by service interruption were qualified to receive continued service under various HEFPA protections?
  
• Could service have been continued with a Home Energy Assistance Program grant or a grant or loan under Section 131-s of the Social Services Law, to assist in the payment of their utility bills?
  
• How well did the utility perform in referring needy customers to assistance programs?
  
• How many of the terminated households qualified for low income gas or electric rates, or Lifeline discount telephone service, but do not participate?
  
• Would improvement of typically inadequate utility low income rates alleviate the termination epidemic?
  

Interestingly, while the New York PSC keeps its embarrassing service interruption data out of sight and its press release issued today touts its consumer protection activities, the California PUC recently commenced a public proceeding to inquire into the rising use of service termination as a utility bill collection mechanism:

The economic crisis currently existing in California and a recent increase in utility service disconnections has led us to reexamine utility disconnection rules and practices. We want to identify more effective ways for the utilities to work with their customers and develop solutions that avoid unnecessary disconnections without placing an undue cost burden on other customers.

See California PUC webpage on Residential Customer Disconnections.

The rising use of service interruption as a bill collection tactic could be addressed by the PSC in setting service standards for utilities under its "performance regulation" regime. Under this trendy label, the PSC basically follows a laissez faire approach to utility regulation, allowing utilities mainly to do whatever they want, coupled with a few service quality measurements and standards, violation of which may result in trivial financial consequences to the utilities. The PSC has no benchmark or rule to deter increasingly rigid call center collection scripts coupled with utility service interruption as cheaper tactics to collect overdue bills.

The values of continuous service, rates affordable to the poor, enforcement of HEFPA, sound customer assistance programs, and effective regulatory policies to discourage unnecessary service interruption are being sacrificed at the New York PSC for short term utility cost-cutting, without sufficient attention to the social cost of massive customer service interruptions and the importance to society of continuous, universal utility service.