PULP Describes Walk-In Customer Service Deficiencies During Con Edison's Lockout of Union Members to Legislative Committees

In a July 24, 2012 letter, PULP described the diminution of services to customers seeking help at Con Edison walk-in customer service centers to three state legislative committees conducting hearings on the effects on safety, reliability, and customer service during its lockout of approximately 8,000 employees who are union members.

Based on Con Edison's Response in a pending PSC proceeding, its Staten Island office is the only walk-in office open.

Offices in Manhattan and the Bronx are closed.

Offices in Mount Vernon, Queens and Brooklyn are only open to receive payments.

PULP underscored the importance of offices being open for individuals to seek or restore service:

Con Edison regularly shuts service off to more than 5,000 customers per month.  It negotiates more than 30,000 individualized deferred payment agreements per month with persons seeking to obtain, maintain, or restore services.  It restores service to more than 5,000 customers previously shut off for bill collection purposes each month. The continuity of services needed to obtain or restore service is a matter of concern.

Some of the customers who apply for or seek to restore services do so through personal visits to walk-in customer service offices.  Persons who seek in-person service may do so for a variety of reasons, including hearing difficulties, speaking difficulties, language barriers, lack of  a working telephone, or limited capacity to understand what needs to be done to obtain service.  Some need to complete written applications for service, which are required when there are arrears from a prior customer at the premises.  Some need to submit proof of identity, or submit documentation showing proof of residence at an address where service is requested, or submit doctors' letters documenting serious medical conditions likely to be worsened by a lack of utility service, and so forth.

Some customers do not have scanners, computers, email or fax capability to submit documents to the utility, and do not have money to pay for such services.  Some customers need to bring along a friend, relative or neighbor to assist in obtaining service.  Some customers seek to negotiate deferred payment agreements to get an opportunity to repay over time, and to thereby obtain or preserve service that otherwise would be denied or terminated.

PULP noted the importance of continued utility service not only to individuals who may be without it, but also for the safety of the public.

PULP indicated that on three prior occasions the Public Service Commission had ordered utilities to reopen and continue operation of walk-in customer service centers, including Con Edison's.  Two of the orders were issued by PSC Chairs as an interim measure, pending further investigation.

For prior PULP Network posts on the subject see:

Con Edison Locks Out Employees Who Are Union Members

PULP Moves to Intervene in Proceeding Regarding Deterioration of Customer Service During Con Edison Lockout

PSC Directs Con Edison to Respond to Petition for Investigation of Service Impairment Due to Company's Lockout of Unionized Workers


PULP Replies to Con Edison Defense of Reducing its Walk-in Customer Services During Lockout of Unionized Employees

Unions Rebut Con Ed Assurances to PSC that Lockout of 8,000 Employees Has Not Eroded Services


PSC Seeks Comments on Whether the Federal Preemption Doctrine Bars It From Taking Action Regarding Service Diminution During Lockout Because the Union has Filed an Unfair Labor Practice Claim with the NLRB

Three Assembly Committees to Hold Joint Hearing On Con Edison Service During Its Lockout of 8,000 Employees

PSC Seeks Comments on Whether the Federal Preemption Doctrine Bars It From Taking Action Regarding Service Diminution During Lockout Because the Union has Filed an Unfair Labor Practice Claim with the NLRB

In the Con Edison lockout investigation case, the New York PSC Secretary issued a ruling today granting an opportunity for petitioners to reply, and asking them to address Con Edison's claim that the PSC cannot grant the interim relief requested, which would stop the lockout while the effect on service is investigated, because a  case filed by the union with the NLRB to contest the lockout as an unfair labor practice is pending before that federal agency.

The unions are asking the PSC to investigate service deterioration during the Con Edison lockout and are seeking an order from the Commission requiring Con Edison, on an interim basis, to halt its lockout of approximately 8,000 unionized workers. The unions cited imminent safety and reliability threats arising from the Company's reliance on managers and others not familiar with the Con Edison distribution system and procedures for maintaining it safely and reliably. The ruling granted the unions' request for permission to reply. PULP's Request for Intervention and PULP's request for a Reply opportunity were also granted.  


In addition, the ruling states that "any other interested persons wishing to comment on the Union’s petition and Con Ed’s response to the Union’s petition may submit them electronically to the Secretary by e-filing through the Department’s Document and Matter Management System (DMM), on or before July 30, 2012...."

Unions Rebut Con Ed Assurances to PSC that Lockout of 8,000 Employees Has Not Eroded Services

In a proceeding at the Public Service Commission considering a petition to investigate service deterioration during Con Edison's lockout of union members, the Utility Workers Union of America, AFL-CIO, Local 1-2, Utility Workers Union of America, New York Central Labor Council and New York State AFL-CIO    filed a Reply on July 20, 2012 to representations to the PSC made by Con Edison in its Response to the effect that “customers are receiving the same level and quality of service today as they were receiving before the lockout.”
  
The unions point out that Con Edison's calming reassurances "are not accompanied by the affidavit of any Company or contract employee, let alone one with sufficient knowledge to verify Con Ed’s extensive factual allegations." The union submits that this assertion of unchanged service "is not credible" because later in the same document, Con Edison itself acknowledges significant services have been cut.

In addition,to service shortcomings conceded by Con Edison later on in its papers, the unions' Reply lists numerous additional gaps in operation and maintenance of the gas and electric service systems that may be compromising safety and reliability of service to customers, and the reduction in services available to customers or applicants seeking to obtain or continue service at customer service centers.

The unions emphasize that

the magnitude of the issues at stake — which include the safety and reliability of service to millions of customers — and the rapid and emergent way in which these issues arose merits special consideration to ensure that they are addressed ... and are thereafter evaluated in a Commission-conducted investigation. * * * *There should be no question as to the significance of the matters at issue in this proceeding. Determining whether ConEd is providing safe and adequate service to its customers in these unprecedented circumstances is central to this Commission’s statutory obligations.

Citing risks to customers and the public when utility service is off, PULP moved to intervene in the case, urging the PSC to order reopening and immediate restoration of full walk-in service at Con Edison offices where vulnerable people in crisis situations often apply for service or seek its restoration after shutoffs.  See PULP Replies to Con Edison Defense of Reducing its Walk-in Customer Services During Lockout of Unionized Employees.

Three Assembly Committees to Hold Joint Hearing On Con Edison Service During Its Lockout of 8,000 Employees

The New York State Assembly Committees on Energy, Labor. and Corporations, Authorities, and Commissions will hold a hearing in New York City on Wednesday, July 25 regarding the provision of utility service by Con Edison during its lockout of approximately 8,000 workers.  Con Edison has claimed its service is no less safe and reliable while management and contract employees attempt to fill the gaps caused by the lockout.

The hearing ... will “examine the protocols in place to ensure the safety of employees and the public in this challenging situation,” according to a notice made public Thursday. The notice cites two non-fatal injuries to newly reassigned employees that occurred since Con Ed locked out 8,500 employees and replaced them with management. AFL-CIO President Mario Cilento said he plans to testify.“This is really an issue of public safety, customer safety and, of course, worker safety and there are a lot of questions that need to be asked,” Cilento said.

Celeste Katz, NY Assembly Plans Hearing On Con Ed Lockout, Daily News, July 20, 2012.

PULP Replies to Con Edison Defense of Reducing its Walk-in Customer Services During Lockout of Unionized Employees

For background, see the prior posts regarding the July 1, 2012 Con Edison lockout of unionized employees, the union’s petition to the NY PSC for investigation of service reductions, and PULP’s motion to intervene urging the PSC to Order reopening and resumption of full service at its walk-in customer service centers, as has been ordered by the Commission on three prior occasions involving Con Edison, NYSEG, and RG&E. 

Con Edison filed a Response to the investigation petition, and PULP has filed a Reply on the issue of diminution of services to customers at the utility’s walk-in offices.

Con Edison’s response argues that despite closing two Walk-in Centers and reducing in-person services at three others to acceptance of payments , “its customers and applicants for service have substantially the same services as they had prior to the work stoppage [i.e., its lockout of union employees].”  Con Edison's Response at page 55, footnote 39, however, basically concedes that services to customers seeking them at walk-in centers are diminished:

[Con Edison] Customer Operations has suspended the following activities:
• Walk-in Centers in the Bronx and Manhattan are closed. The Walk-in Center in Staten Island is open. Walk-in Centers are open in Queens, Brooklyn and Westchester (Mount Vernon) but representatives are not available to handle customer inquiries except via courtesy phones available at Queens, Brooklyn and Mount Vernon centers. Signage in closed Walk-in Centers alerts customers to nearby authorized facilities for bill payment.
• Reading of residential and small commercial customer non-AMR meters is suspended, except in Staten Island.
• Customer-requested physical service turn-offs and meter reading appointments are suspended. 

Thus, Con Edison customers in Staten Island still have full walk-in service and meter reading. On the other hand, customers in Manhattan and the Bronx have no Con Edison office to visit regarding problems, payment plan negotiations to restore previously shut off service, new applications for service which may be required to be in writing whenever there are prior unpaid bills at the premises, presentation of the “positive ID” Con Ed requires for new service, etc.  Customers in Brooklyn, Queens and Mount Vernon face offices that are open only to receive payments, with house telephones for the Call Center.   

Con Edison maintains that

withdrawal of its personnel from the Walk-in Center sites [Mount Vernon, Queens and Brooklyn] was done out of concern for the security of the on-site personnel and the potential that the presence of Company personnel at National Grid and Food Bazaar premises might have resulted in National Grid's and Food Bazaar's personnel and customers having to cross a Union picket line to enter for work or to transact business.

Regarding security fears, PULP responded that the company can employ security guards, as do many other businesses, and seek police assistance in the event of trouble.  PULP pointed out that the company apparently overcame its security concerns when the Staten Island office was fully staffed and remains open to provide full customer services to Con Edison’s Staten Island customers. The discretionary nature of Con Edison's deviation from the Order is illustrated by its decision to provide full services at the Staten Island Walk-in Center but not elsewhere.  

Regarding Con Edison's concern that a hypothetical union picket line protesting its lockout might inconvenience corporate neighbors and burden its neighbors' customers, PULP responded that such “hypothetical concerns should not be an excuse to abandon services required by Commission Order to be provided by Con Edison to Con Edison customers and the public.”   PULP pointed out that if the shoe were on the other foot, and if National Grid or Food Bazaar locked out their employees and they set up a picket line that was honored by Con Edison union employees, Con Edison could continue services to its customers with its management employees, just as it is proving it can do in Staten Island.

PULP noted that Con Edison in its Response touted the fact that  “approximately one year before the expiration of the 2008 Collective Bargaining Agreement, the Company commenced its preparations for the possibility of a work stoppage on July 1, 2012.”  In that entire year of strategic planning for the lockout, these vaunted, detailed preparations did not include continuation of full in-person services to customers at the Walk-in offices (except Staten Island).  Con Edison did not petition for modification of the Commission’s longstanding Order requiring walk-in services to be available every business day, or for permission temporarily to cease walk-in services in Manhattan and the Bronx, or reduce in-person services to the receipt of payments in Mount Vernon, Brooklyn, Queens, or to continue full services to customers in Staten Island that are not available to customers in other boroughs or Mount Vernon.  PULP suggested a disrespect for the often very vulnerable customers who use the walk-in offices and for the Commission and its prior Order which stopped Con Edison from closing its offices and which required reopening of offices that had been closed.  The Order mandates that

Consolidated Edison Company of New York, Inc. shall establish and maintain at least one facility in each of the five boroughs of New York City and in the County of Westchester, whether at an existing Customer Service Center, or at a Walk-in Center to be established in the nearby vicinity of a Customer Service Center to be closed. All Walk-in Centers must be accessible by public transportation and must be open to customers from no less time than 8:30 am to 5:00 pm, Monday through Friday each week, holidays excluded. Each Walk-in Center must provide, at a minimum, all of the services formerly available to customers at the company's Customer Service Centers. All such services shall be provided by Customer Care Professionals employed by Consolidated Edison Company of New York, Inc., except that the function of accepting payments may be provided by tellers or cashiers employed by Primary Agents.

Order Approving Joint Proposal, Case 99-M-0851, (Emphasis added).

Con Edison claims its telephone Call Center is a substitute for the attenuated Walk-in Center services.  Some customers or applicants with hearing, speaking, breathing or other physical or mental limitations that make telephones difficult or impossible for them to use, however, cannot be served satisfactorily by a remote call center, and they may prefer in-person dealings with the utility.  Some customers cannot afford or do not have any telephone service.  Some who need a relative, friend or neighbor to accompany them in sorting out a dispute, applying for service, negotiating a payment plan, lodging a complaint, or simply understanding a problem are not served by an office that is open only to take payments, or by a payment kiosk, or by a house phone to the Con Ed Call Center.  As PULP pointed out in its initial motion for intervention, the denial or delay of utility service can lead to tragic and costly consequences for customers and for the public.

Con Edison argues that the office closings and service reduction are only temporary.  For those seeking service, however, the fact remains that the offices are not open for the full service from Con Edison customer care professionals that is required every day from 8:30 AM to 5:00 PM by the Commission Order.

Con Edison also argued that Department of Public Service Staff is working so closely with the utility that no formal Commission investigation proceeding regarding services being provided during the lockout is needed:

The Company has communicated with the Department of Public Service (“DPS”) the development and implementation of the contingency plan both before and during the work stoppage. DPS Staff has been actively monitoring the Company’s performance during the work stoppage. In light of this diligent and comprehensive effort undertaken by the Company both in advance of and during the work stoppage, and DPS Staff’s ongoing monitoring, a special investigation by the Commission into the quality, reliability or safety of service currently being provided by the Company to its customers is unnecessary. * * * *
There are no circumstances here that would warrant a change in approach, even if the law were to allow it. [footnote omitted]  Moreover, the Motion incorrectly presumes that the Commission is not already exercising oversight of the Company’s operations, both before and during the work stoppage. In fact, the Department of Public Service (the “Department”) is actively monitoring the Company’s operations on a daily basis, having established a Strike Contingency Coordinator and team of Staff technical experts who communicate daily with the Company regarding current operations, actively visit various Company work locations, and reach out to Company personnel for additional information in order to gain a better understanding of various elements of the Corporate Contingency Plan. Moreover, communications between Staff and the Company began well in advance of the work stoppage, in the planning stage. The Company is also proactively communicating with members of the Department at various levels on a daily basis in order to keep Department of Public Service Staff informed as to all material events and circumstances associated with Company operations. 

Con Edison Response, pages. 2, 36.  


PULP replied that even if DPS Staff was somehow persuaded by Con Edison that during the lockout it should be allowed to truncate and terminate walk-in center services to some of the utility's most vulnerable customers, PSC Commissioners cannot be bound when their staff greenlights a utility's course of conduct that violates the Public Service Law or a Commission order, or is contrary to Commission policy.      

Inspector General Report Faults Utility Gifts to Department of Public Service Staff Investigating Safety Issues; Utility to Pay Fine of $1.667 Million

The Syracuse Post Standard reports that:

National Grid is expected to pay a $1.667 million penalty next month to settle charges that for years it plied workers at the state agency that regulates the utility with gifts including meals and rounds of golf.The gifts were uncovered during an investigation of Public Service Commission employees by state Inspector General Catherine Leahy Scott, who released her report today.

Tim Knauss, National Grid fined $1.6 million for improper gifts to state workers regulating the utility, Post Standard, July 18, 2012.  The New York State Inspector General's Report on the Investigation of Employee Misconduct at the Department of Public Service mentions the fine, contained in a proposed settlement scheduled for review by the PSC on August 16, but does not name the utility.  The IG Report states:

The Inspector General determined that from 2002 to 2010 several employees in the New York State Department of Public Service, Office of Electric, Gas, and Water, Safety – Electric, Gas, and Steam Section improperly received gifts totaling more than $7,000 in the form of meals and games of golf from regulated entities.  The Inspector General’s investigation further determined that two Department of Public Service (DPS) employees violated DPS policy by sharing confidential information, which included drafts of documents to be submitted to the New York State Public Service Commission. ****  The Inspector General’s investigation found that for more than eight years, several DPS employees assigned to the Safety Section engaged in misconduct by accepting gifts from public utility companies that were regulated by the Commission.  

 The Inspector General’s investigation further revealed that [an employee working on an explosion investigation] released several draft versions of an accident investigation report in violation of DPS’s confidential information policy.... 

(Emphasis added).  The IG's use of the plural  "regulated entities" and "utility companies" involved in making gifts to DPS staff suggests there may be more than one utility involved.  A response of the Public Service Commission, included in the Inspector General's Report, indicates that:

The utility company which provided gifts to [two DPS employees] as well as other Safety Section employees, has reached a settlement regarding the improper gifting in violation of the New York State Public Service Law.  The utility company has agreed to pay $1.667 million at shareholder expense in lieu of PSC’s commencement of an enforcement proceeding in New York State Supreme Court.  The agreement is subject to PSC approval at its August 2012 meeting.  

Neither the IG Report nor the PSC response contained in it mention National Grid or any of the other gift-giving utilities by name.  It is not clear from the report whether the same utility whose consultant obtained draft investigation reports being prepared by recipients of gifts was also a gift-giver.  The Report does not indicate whether any separate action has been taken by the PSC against the utility whose consultant - a former Department of Public Service staff member - obtained drafts of a DPS explosion investigation report being prepared by employees who had received gifts. 

The report mentions that the leaked draft of the investigation report was being prepared in connection with a major explosion in Queens on July 25, 2008. Contemporary news reports of a major Queens explosion on that date indicate that the utility serving the premises where the explosion occurred is Con Edison.  Sewell Chan, Queens Building Is Evacuated After Explosion, N.Y. Times July 25, 2012; Heads, it's Con Ed; tails, it's the landlord, N.Y. Daily News, July 26, 2008.  Thus, it would appear that the utility whose consultant received drafts of confidential explosion investigation reports is Con Edison.  Parsing the IG report, it appears that at least one employee involved in the leak of the draft DPS explosion investigation report also received gifts, from an unnamed utility.

Update
In a footnote, the Inspector General's report indicates that despite a Safety Staff Report which exonerated Con Edison in the July 25, 2008 gas explosion in Queens, and which was not initially presented to the Commission, the PSC eventually went on to bring a penalty proceeding under PSL § 25 alleging that the utility had violated legal obligations that contributed to the death of a customer, and injury to others:

In March 2011, the Queens incident investigation report was brought before the Commission.  Thereafter, following the filing of an order to show cause in anticipation of proceeding with a penalty action against the utility, the Commission entered into a settlement agreement [with Con Edison] in which the utility agreed to pay $1.5 million.  Following an additional DPS investigative effort, the Commission proceeded against the utility on the grounds that the non-compliance was based on the utility’s failure to follow its written gas turn-on and restoration procedures, which constituted a violation of Public Service Law (PSL) §§ 5 and 65 mandating safe and adequate service and Commission regulation 16 NYCRR 255.603(d), and Commission precedent.

The PSC Case 11-G-0077 includes the Report of the Safety Staff, (drafts of which had been vetted with Con Edison's consultant), which basically would have exonerated Con Edison for not following its established procedures for restoring gas service, stating:

refusing to restore service on that day might only have postponed but not prevented the incident. The same event could have happened even if the Con Edison personnel had fully followed procedure G-11836.

In its Order to Show Cause launching a penalty proceeding against Con Edison regarding the explosion, the Commission indicated it was not bound by the Staff Report:

The Report observed (at 20) that a refusal to restore gas service might have avoided the incident, but concluded that such refusal might not have prevented, but only postponed, the incident because “[t]he same event could have happened even if the Con Edison personnel had fully followed procedure G-11836.” Nothing in PSL 25(3) requires, however, that we determine that full utility compliance would have prevented the death or injury; rather the statute requires a Commission determination that the noncompliance “caused or constituted a contributing factor.” The Report’s speculation as to what might have happened on some subsequent day had the restoration of service been postponed does not necessarily defeat Con Edison’s contribution to what actually happened on July 25, 2008.

The PSC action did not allege any violation arising from the utility's consultant who vetted the Staff drafts of the Safety Report.  Subsequently, Liberty, a plumbing company who along with Con Edison was sued after the explosion, opposed the PSC settlement with Con Edison because it resulted in no finding of wrongdoing by Con Edison.  Liberty apparently raised the issue of the Con Edison  consultant's influence on the DPS Safety Staff Report:

Finally, Liberty claims Con Edison manipulated the Staff investigation. It asserts Con Edison attempted to focus Staff on the condition of gas valves and hoses irrelevant to the open valve in Apartment 2P. 35 Liberty also claims Con Edison diverted Staff’s attention from the actions of Con Edison employees.36 It further asserts Con Edison’s consultant persuaded Staff to remove a conclusion in a draft of the Staff Report, relating to whether Con Edison’s violations caused or contributed to the Gas Incident.37

The footnotes refer to Liberty's objections submitted in opposition to the settlement that are not contained in the PSC public electronic case file for Case 11-G-0077.  As discussed below, the Liberty objections may have contained allegations of improper gift-giving by Con Edison to DPS Staff.


The PSC Order approving the settlement mentions the issue of the leaked report in discussion of Con Edison's response:

Finally, Con Edison rebuts Liberty’s claim that Staff of the Gas Safety Section of the Office of Electric, Gas and Water improperly removed a conclusion from the initial draft of the Report to the effect that Con Edison’s actions caused the explosion.43 Con Edison asserts this is incorrect because the initial report never found Con Edison’s actions caused the explosion, but only suggested that Con Edison’s actions may have contributed to the root cause of the explosion.44 Con Edison also argues that Staff properly revised its initial draft of the Report because the evidence did not support such a conclusion. Here Con Edison asserts the initial draft of the Report did not include any evidence, and contained no discussion, as to how Con Edison’s alleged procedural violations may have contributed to the root cause of the explosions.45

The PSC Order approved the settlement of the case without taking action regarding Liberty's claims on these issues:

Given the limited purpose of this case, Liberty’s objections relating to the Company’s alleged wrongful conduct after July 25, 2008, are not controlling with respect to the acceptance of the Agreement as a basis for settling the penalty action.  At most, they suggest we have valid grounds for exercising our enforcement powers to the fullest extent allowable under the law. In effect, however, this is what the Agreement achieves. It provides for a monetary payment by Con Edison’s shareholders in an amount at least as great as what the Commission could possibly obtain if it successfully pursued all available penalties under the Public Service Law. Thus the Agreement fully achieves the discrete purposes of Section 25 of the Public Service Law.This is not to say that we dismiss the concerns Liberty raised. Rather, we view them as largely outside the scope of this case. We do, however, clarify that we regard Clause II.3 of the Agreement pertaining to the relinquishment of penalty claims, as reaching only gas safety violations associated with the “Gas Incident,” defined in the Agreement the explosion that occurred on July 25, 2008 at 147-25 Sanford Avenue, Queens. We do not read the Agreement as limiting and we preserve our authority to bring any penalty action for violation(s) beyond gas safety violations, which was the focus of our investigation, (i.e., PSL §15, which prohibits, among other things, gifts to Department employees). 56 While Clause II 3 of the Agreement provides the Commission will not pursue a penalty action with regard to Con Edison actions “directly or indirectly related to the Gas Incident” we do not construe that as reaching conduct improperly affecting our Staff’s investigation. We will require Con Edison to accept this reading of the Agreement as a condition of the approval of the Agreement.

In the footnote to the mention of "gifts to Department employees, the PSC Order stated "This clarification should not be read to imply that we have evidence of such violations."  


In June, 2011, a court case brought by victims of the explosion against Con Edison and Liberty Plumbing was settled.  Con Edison agreed to pay the entire award of $25 million.  

PULP Moves to Intervene in Proceeding Regarding Deterioration of Customer Service During Con Edison Lockout

The Consolidated Edison Company of New York ("Con Edison") locked out about  8,500 of its unionized employees on July 1, 2012.  On July 11, the Utility Workers Union of America, AFL-CIO Local 1-2  and others petitioned the Public Service Commission requesting an immediate investigation regarding safety, reliability, and customer service deterioration due to the lockout, and seeking interim relief requiring an end to the lockout.  The PSC directed Con Edison to respond by Tuesday, July 17.  See  PSC Directs Con Edison to Respond to Petition for Investigation of Service Impairment Due to Company's Lockout of Unionized Workers.  

PULP filed a motion to intervene on July 12 supporting the union petition for an investigation regarding the possible erosion of vital customer services, including the alleged closure of customer service walk-in centers, and the cessation of most meter reading (with apparent reliance on estimated bills). 


PULP pointed out that historically, in June and July of last year, Con Edison shut off more than 5,000 customers per month and negotiated more than 30,000 individualized deferred payment agreements each month.  These agreements are essential to maintaining or restoring service to customers who owe arrears for prior service.  PULP argues that if customers cannot obtain service, or cannot restore service after a shutoff with full payment or a payment agreement negotiated with Con Edison, or promptly obtain service after a payment of utility assistance is made, the utility may be violating its basic duty to serve its customers and the public, the Home Energy Fair Practices Act, and Social Services Law 131-s.


PULP's intervention motion cites a prior PSC Order in Case 99-M-0851 approving the settlement of a prior case that stopped Con Edison from closing its walk in customer service centers, in which the Company was mandated to reopen and to keep full service customer service centers open in each borough of New York City and in Westchester County.  The Order states:  

Consolidated Edison Company of New York, Inc. shall establish and maintain at least one facility in each of the five boroughs of New York City and in the County ofWestchester, whether at an existing Customer Service Center, or at a Walk-in Center to be established in the nearby vicinity of a Customer Service Center to be closed. All Walk-in Centers must be accessible by public transportation and must be open to customers from no less time than 8:30 am to 5:00 pm, Monday through Friday each week, holidays excluded. Each Walk-in Center must provide, at a minimum, all of the services formerly available to customers at the company's Customer Service Centers. All such services shall be provided by Customer Care Professionals employed by Consolidated Edison Company of New York, Inc., except that the   function of accepting payments may be provided by tellers or cashiers employed by Primary Agents.

PULP cited a one-Commissioner ORDER INSTITUTING PROCEEDING AND DIRECTING
ROCHESTER GAS & ELECTRIC CORPORATION TO SUSPEND CLOSURE OF ITS CUSTOMER SERVICE CENTERS of former PSC Chairman Maureen O. Helmer in PSC Case 02-M-1465 in which she directed the investigation of impending NYSEG customer service office closings and possible diminution of customer service which, on an interim basis, halted the closure of the customer service offices.  The Order states:

Due to RG&E's failure to notify the Commission of its intention to close its Centers and or to provide supporting information, the Commission does not have information upon which to determine the reasonableness of the company's action.[footnote omitted] Inasmuch as the Centers may provide an important and essential role related to customers' ability to apply for and continue service and enable the company to carry out its customer service obligations (see e.g., Public Service Law Article 2), the Commission must determine whether the closures would adversely impact customer service quality. The Commission's concerns relate to continuation of the customer service functions that are typically provided at customer service centers (e.g., application for service, billing complaints, payment arrangements to avoid service termination, bill payment), traffic volumes at the Centers, and RG&E's outreach plan to educate customers about their customer service options.

PULP also cited a similar interim Order of former PSC Chairman William M. Flynn 03-M-0380 which directed New York State Gas & Electric ("NYSEG") to keep customer service offices open. The ORDER INSTITUTING PROCEEDING AND DIRECTING NEW YORK STATE ELECTRIC & GAS CORPORATION TO SUSPEND CLOSURE OF ITS CUSTOMER SERVICE CENTERS states:

The closure of the Centers may be inconsistent with, and impair, NYSEG's obligation to provide safe and adequate service and customer service protections, as required by
Articles 2 and 4 of the Public Service Law. Therefore, this proceeding is commenced to examine NYSEG's proposal, including, but not limited to, the impact, if any, of the proposed closures on customer service quality, the nature, scope and extent of notice provided to customers, and the quality of available alternatives. To ensure that NYSEG's customers are adequately protected until the investigation of this matter is completed, NYSEG is directed to continue the full operation of its Centers until the Commission issues a final order in this proceeding.

PULP's motion asked the PSC to provide appropriate interim relief and to conduct a thorough investigation whether, during the lockout, Con Edison's customer service deteriorated and whether it breached its universal service obligations or violated the Public Service Law and the prior Commission Order requiring maintenance of full service walk in customer service centers.

PSC Directs Con Edison to Respond to Petition for Investigation of Service Impairment Due to Company's Lockout of Unionized Workers

On July 12, 2012, the New York Public Service Commission (PSC) directed Con Edison to respond by July 17, 2012 to a Motion for Initiation of Expedited Investigation and Interim Relief "seeking that the Commission: 

(1) initiate and conduct on an expedited basis an investigation into the quality, reliability, and safety of the service currently being provided by Consolidated Edison Company of New York . . .  to its utility customers; 

(2) investigate whether customers are being charged for a quality and level of service that ConEd is not providing, and for costs that ConEd is not incurring associated with some 8,500 workers who are involuntarily off the job; and

(3) provide interim relief by directing the Company to terminate immediately its lockout of employees represented by UWUA Local 1-2 and direct their return to work during the pendency of the Commission’s investigation.

The Petition was brought by the Utility Workers Union of America, AFL-CIO Local 1-2.

The Petition references duties required of the utility under the New York Public Service Law, such as the duty to to provide safe and adequate service, points out services which are not being provided or which are diminished due to the lockout, and contends that the company lockout has "imperiled the safety and reliability of utility services provided to its customers."  


The Petition cites certain specific services mandated by statute which are not being provided, such as meter reading and maintaining walk-in offices where people can apply for service, make payment arrangements, and make complaints in person, and notes that ":using estimated bills (which may be much too high) and closing the Company’s walk-in centers, are likely to disproportionately affect the Company’s most vulnerable, low-income customers."


In addition, the Petition states that work essential to service reliability is being reduced.  The petition gives examples, including 

• Transformer Inspections
• Manhole Inspections
• Coating Refurbishment Program
• Stray or Contact Voltage Work
• Preventive Maintenance to Avoid Voltage Reduction.Heat Event Response
• Permanent Repairs
• Gas Service, and
• Steam Services.

The Petition maintains that 

This is not a crisis caused by an outside force; it is a self-inflicted wound.
Likewise, the Company should not be heard to claim that its implementation of a strike
contingency plan satisfies the current concerns. There is no strike. Instead, the Company
has made a decision to drastically downsize its workforce and, as a result, unduly
jeopardize safety and reliability by providing substandard service—presumably in an
effort to try and gain an advantage in pending labor negotiations. 

Even more fundamental, while not currently receiving service from the thousands
told by ConEd not to report for work, the Company’s customers continue to pay rates that
include the costs associated with the salaries and benefits for the 8,500 persons who are
currently subject to the lockout as well as the higher managerial salaries to employees
who are not now performing managerial tasks, but are instead doing craft work. The
Commission should not permit the Company to charge rates for services that are not
being received, and for employees who—as a result of ConEd’s unilateral action—have
no ability to service Company customers.

The Petition emphasizes that

The Commission is not being asked to mediate a labor dispute. It is instead beingasked to act in accordance with its statutory mandate and in recognition of the obvious:
5,000 managers (many of whom lack field experience) cannot be performing the utility
work routinely performed by 13,500 employees, including 8,500 craft personnel who are
now off the job.

The Petition cites decisions of other state utility regulatory commissions that have acted to protect the public and consumers in situations where utilities proposed to lay off workers needed to fulfill public service duties.

The Petition asked the PSC to order Con Edison to respond by July 13; the Commission Secretary issued a directive "[b]alancing the need for expedition and our interest in a robust response, [directing] Consolidated Edison to provide a response to the Motion by Tuesday, July 17, 2012 by 4:30 P.M.


Papers filed with the PSC in the case are at http://documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?MatterSeq=40285

FERC Urged to Use Portion of Funds Disgorged by Alleged Wholesale Electricity Market Manipulator to Bolster Utility Consumer Advocacy

Utility consumer advocates from the PJM RTO region are asking FERC to allocate $1.2 of the $6 million for electric consumers in the PJM region to enhance policing of the wholesale markets.  See MOTION OF INDICATED JOINT PJM STATE CONSUMER ADVOCATE AGENCIES TO PROPOSE APPORTIONMENT OF MONIES IN PJM FUND AND PROPOSAL, FERC Case No. IN12-7, filed July 10, 2012. 


Background
On March 8, 2012, FERC issued an Order approving a Stipulation and Consent Agreement in which FERC agreed to halt an electricity market manipulation investigation, and the target, Constellation Energy Commodities Group (CGC) -- without admitting wrongdoing -- agreed to disgorge $110,000,000 “for the benefit of electric energy consumers." CECG also agreed to pay a fine of $135,000,000 to the government.  
The disgorged profits stemmed from alleged manipulation or gaming, mainly of the wholesale electricity spot markets of the NYISO.  


After using some of the disgorged profits to upgrade ISO and RTO computer systems so that a similar recurrence of market gaming is less likely, the balance is being split among the regions served by the wholesale electric utilities whose markets were affected by the alleged manipulation, i.e., NYISO ($78,000,000), ISO-NE ($20,000,000) and PJM ($6,000,000).  A FERC Administrative Law Judge is conducting a proceeding to allocate the money.


Proposal of the PJM Advocates
The RTO and ISO utilities are set up as non-profit organizations, with complex governance structures that include consumers as one of numerous "stakeholders":

PJM stakeholders develop market rules which guide PJM’s energy, capacity and ancillary services markets. Adopted market rules impact generation clearing prices in all wholesale markets and directly impact retail customer bills; in fact, generation costs makes up the majority of ratepayers’ electric bills. Stakeholder processes are also used to develop transmission expansion planning rules to address reliability, economic and policy goals, develop region-wide load forecasts and determine how to best integrate demand side resources such as demand response and energy efficiency. CAPS would facilitate retail load participation in these processes.

The PJM advocates in the multi state PJM region cite the need for more consumer representation in proceedings at PJM, pointing out the difficulty of participation in the "stakeholder" process:

Residential and smaller commercial consumer interests are routinely underrepresented in the PJM stakeholder process. Meanwhile, market participants with generation and transmission interests in PJM are generally well-represented at each PJM meeting. While there is some representation of large industrial customers, the vast majority of customers in PJM, as well as their designated state Consumer Advocates, are absent from most meetings; particularly at the lower-level committees where proposals are first developed and participation is vital to influencing market rule development. Consumer Advocate participation is often limited to higher-level committee meetings, such as the Members Committee where proposals have already been fully-formed and fully vetted. The perpetual problem of limited state consumer advocate office participation is directly tied to persistently-limited resources and can best be remedied through the funding of CAPS

The PJM state consumer advocates propose to create a new organization that would be accountable to the advocates in the states served by PJM, and funded for three years with a $1.2 million initial grant of the disgorged funds.   The staff of  the proposed new entity would participate at the PJM, representing the participating offices in matters such as changes in market rules.  Consumer Advocate Offices are independent and have the capability of challenging regulatory decisions at FERC or in court.  Consumer Advocate Offices that support this proposal include: 

the Delaware Division of Public Advocate; the District of Columbia Office of People’s Counsel; the Illinois Office of the Attorney General; the Illinois Citizens Utility Board; the Indiana Office of Utility Consumer Counsel; the Maryland Office of People’s Counsel, the Pennsylvania Office of Consumer Advocate, the Virginia Office of the Attorney General; and the West Virginia Consumer Advocate Division. In addition, the Office of Ohio Consumer Counsel and the New Jersey Division of Rate Counsel support the proposal in principle but are not signatories to this filing.

New York
In New York, consumer groups are urging the Governor, the Attorney General, and the Public Service Commission to use a portion of the $78 million for the state's electric customers for bill assistance to reduce the number of service terminations for bill collection purposes, for energy efficiency programs, and to bolster utility consumer advocacy.  See New York Formulating Plans to Use $78 Million Disgorged by Energy Trader for the Benefit of Electricity Consumers, PULP Network, June 16, 2012.  Eventually, the utility consumer representation function, could be funded through a small non-bypassable charge at the ISO/RTO level, in the same way the ISO/RTO operations are funded, with the cost incorporated in wholesale electric rates.  

FERC ALJ Decides Motions of Parties Seeking Role in Proposing to FERC Uses of Disgorged $78 Million NYISO Market Gaming Profits, Clarifies Process.

On July 11, 2012, a FERC ALJ decided motions regarding "eligiblity" of parties to recommend how FERC will allocate disgorged profits from alleged gaming of NYISO electricity markets.  The fund is for the benefit of electricity consumers.  See New York Formulating Plans to Use $78 Million Disgorged by Energy Trader for the Benefit of Electricity Consumers, PULP Network, June 116, 2012.


In the order beginning the case, FERC said recommendations for apportionment of the money “may only be made by the appropriate state agency or agencies of those respective states, including, for example, state public service commissions, state attorneys general, or state consumer advocates, for the benefit of electric energy consumers.In rejecting motions from out of state parties, non-state agencies, and non-consumer interests, the ALJ clarified the process.  A New York power generator,IES, had sought eligibility status, which was opposed by several parties, including AAEP.  The ALJ stated:

On May 15, 2012, AARP filed an opposition to IES to be eligible for funds in the
NYISO and ISO-NE region. AARP noted that the Commission ordered that the funds in
this proceeding are to be allocated for the benefit of electric energy consumers, and thus,
are not intended for a party such as IES, a power producer and seller. AARP noted thatthe proper role of any party representing consumer interests that does not qualify as an eligible state agency is to convey their recommendations to the eligible state agencies, as AARP and other consumer groups are doing. IES disagreed with this recommendation in their May 30, 2012 response, but IES did agree with AARP’s connotation that IES is a “party representing consumer interests that does not qualify as an ‘eligible’ state agency in this proceeding.”
* * * *
AARP is correct in noting that the proper role of any party to this proceeding
representing consumer interests of market participants harmed by the market distortions
created by CCG’s manipulative practices that does not qualify as an ‘eligible’ state
agency in this proceeding is to convey its concerns and recommendations to the
appropriate state agencies that do meet the Commission’s criteria for eligibility to
participate in requests for apportionment of the Fund, as AARP and other consumer
groups are doing. Further, any such party will be permitted to file comments should itbecome necessary and appropriate to do so to address the allocation and distributionmethodology ultimately proposed by the eligible state agencies. Any such comments
must be submitted within fifteen (15) days of the filing date of the proposed allocation
and distribution process to which the comments are intended to pertain.

AARP and other consumer groups have urged New York agencies, and the governor, to use a portion of the $78 million fund for customer assistance to reduce service terminations, for energy efficiency, and for enhanced utility consumer advocacy.

Con Edison Locks Out Employees Who Are Union Members

On July 1 Con Edison locked out approximately 8,000 of its employees who are union members in a dispute over concessions sought by the company.  According to Crain's, "[m]any of the biggest and most politically powerful unions in the state are putting their resources behind the small utility workers union that represents the 8,500 employees locked out by Consolidated Edison since Sunday."

The Con Edison utility subsidiary has been prospering of late, due in part to previously allowed rate increases and customer growth. See the video of "Mad Money's Jim Cramer's May 22, 2012 interview with Con Edison's CEO Kevin Burke and the article Con Ed is the New Treasury. Major server farms are locating in New York City to handle internet business, increasing revenues on the electric side, and due to the decline in natural gas prices, buildings that customarily heat with heavy oil are switching to natural gas, increasing revenues on the gas side.

The company and the Public Service Commission agreed in the last rate plan to "revenue decoupling" adjustments designed to make the company indifferent to increased sales.  In order to advance environmental goals, the perceived incentive for the company to stimulate additional customer usage of electricity and natural gas was ostensibly removed.  (This is an article of faith in the environmental community, but it may overlook the reality that it is customers, not utilities, who make consumption decisions).  The decoupling formula allows the company to keep increased revenues from new customer growth. 


Con Edison's most recent three year rate plan, based on an agreement approved by the Public Service Commission,will expire next year.  In a notable departure from past practice, the company has not sought an increase in rates by filing a rate case eleven months in advance of the expiration date.  Normally this would be welcome relief to ratepayers, who for years have seen rates go up with every rate case, but now the current rate formulas will stay in place. 


Perhaps due to growth in revenues outside the decoupling formula, the company may be overearning.  If so, it might be possible for the PSC to lower the rates while still giving a reasonable return to shareholders on their investment.