The staff of the West Virginia Public Services Commission (PSC) has harshly criticized FirstEnergy Corp. for hitting its customers with “dramatically high” bills in the wake of the 2012 Superstorm Sandy and the Derecho.
In June 2013, the PSC opened up a general investigation into the meter reading, billing and customer service practices of Monongahela Power and and Potomac Edison, two utilities owned by FirstEnergy Corp.
In the year prior to the opening of the PSC investigation, customers had filed 750 requests for assistance and nearly 70 formal complaints with the PSC. Public hearings were held in October 2013.
And in a memo issued last week, the PSC staff found that, in response to the investigation, the companies “provided a lot of excuses to the Commission as to why so many customers received multiple consecutive poorly estimated bills that led to dramatically high ‘true up’ bills.”
“Originally, the companies tried to convince the Commission and the public the problems were mainly caused by the timing and size of the Derecho and Superstorm Sandy,” the staff wrote. “When the problems continued, the companies started providing further excuses, but did not take responsibility for their role in creating many of the problems themselves and compounded the problem further by making unreasonable demands for payments from the impacted customers. In staff’s opinion, they still have not taken that responsibility.”
“The Derecho and Superstorm Sandy undeniably played a significant role in the problems underlying this case,” the staff wrote. “However, all along the way, the Companies made poor decision after poor decision with little to no thought as to how it might impact their customers. These poor decisions lead to multiple and continued violations of their tariffs. Staff takes these violations very seriously and believes it is time the Companies own up to their mistakes and provide the Commission with concrete evidence these types of problems will not reoccur.”
“The companies should be required to either correct the ongoing problems with their estimation routine or switch from bi-monthly to monthly meter reading,” the staff said.
The PSC’s Consumer Advocate, in a separate memo, also harshly criticized the companies for blaming billing problems on the weather.
“Throughout the course of this proceeding, the companies have attempted to place the majority of the blame for their billing and meter reading problems on the Derecho that occurred in June 2012 and Superstorm Sandy, which occurred in October 2012,” the Consumer Advocate wrote. “However, while the storms may have exacerbated the companies’ existing problem, it is inaccurate to contend that the storms caused the billing problems so many customers have faced. In actuality, the evidence shows that the merger of Allegheny Power into FirstEnergy in 201 1 and subsequent transition issues in the wake of the merger, including understaffing, transitioning from the Allegheny billing system to the FirstEnergy billing system, and the questionable timing of the meter route ‘renumbering’ project, created this problem.”
The Consumer Advocate also found that FirstEnergy’s “efforts to address the meter reading problem are insufficient because, to date, customers continue to complain regarding billing and meter reading issues.”
“Today, nearly three years post-merger and close to two years post-Derecho, customer complaints to both the Companies and the Commission regarding meter reading and billing issues continue,” the Consumer Advocate found. “One reason for continued problems is rather obvious: bad, unreliable data begets bad, unreliable data. In other words, if a customer’s bill was estimated in November 2013 using bad, unreliable data from November 2012, then the customer’s estimated bill for usage in November 2013 will also be wrong.”
The Consumer Advocate recommended that the companies be required to “perform actual reads of every meter, every month, for at least one year, to obtain twelve months worth of actual reliable data for every customer because the estimation process utilized by the companies is inherently flawed, thus creating ‘bad’ or unreliable historical data that will be used for future estimated bills.”