When Chris Lankard walked outside his house, he did not expect to see a Central Hudson employee replacing his electricity meter. He had still been receiving electricity bills, but was confused when he spoke to the worker and learned his meter had been broken for six months.
“How did I get charged?” he said. “If my meter wasn’t working for six months, then how did I get charged?”
Faulty equipment is one of the many defects reported by the New York State Public Service Commission’s (PSC) investigation into Central Hudson Gas & Electric that was launched in March 2022. The investigation was spurred after tens of thousands of complaints from customers against the Poughkeepsie-based energy provider. The utility service serves about 310,000 customers from Albany to Putnam County. After the investigation was released in December 2022, Central Hudson has faced intensified scrutiny from customers already affected by the company’s wrongdoings.
Central Hudson does not send out meter readers to check a household’s electricity usage each month. Almost half of Central Hudson customers have digital meters, also known as Encoder Receiver Transmitters, that are read with hand-held receivers. This remote meter reading is meant to be more efficient and less-intrusive. Per an agreement with the PSC, the utility is required to read meters every other month and send customers an estimated bill on the months a customer’s meter is not read “based on past usage, weather conditions and many other factors.” According to Central Hudson’s Director of Media Relations Joseph Jenkins, estimated billing has been a part of Central Hudson’s billing process since 2016. Prior to 2016, the company billed their customers every other month, which made all bills based on actual reads. In 2016, regulators required Central Hudson to move to monthly billing. The company agreed with the PSC to continue reading meters every other month and have an estimated month in the interim.
“The estimate isn’t just the number that someone pays and it goes away. If your estimate is less than your usage, when we do your actual meter read it will true you up and your bill might be a little bit higher. Likewise, if your estimate is a little high, on your next actual meter reader your bill would actually probably be a little bit lower than would be expected,” said Jenkins. “We understand ultimately that these estimates are a source of frustration for our customers.”
Customers reported they were slammed with large bills that reflect their actual energy usage once their meters are being read after an estimate that was too low. In November 2022, the utility said it was looking at ways to reduce estimated billing and submitted a plan to the PSC to move away from estimated billing practices. The plan includes onboarding additional resources to be able to complete monthly meter reads. “That includes an additional approximately 40 new meter readers. That also includes equipment for their use — vehicles that they need to move around in the fields and do these meter reads,” said Jenkins. “It also includes accommodating for the system programming required to successfully implement it.”
Jenkins said extraneous circumstances can result in a customer receiving multiple estimates in a row, like the case of Lankard’s broken meter. This can include lack of access to the meters — which are sometimes inside customer’s homes — as well as widespread meter outages caused by large storms. Some customers have been receiving multiple estimated bills in a row because Central Hudson’s system was viewing actual meter reads as either too high or low too be accurate, then kicking them out and replacing them with estimated reads as a security measure. “It’s one of the known defects we had with our system but has since been largely corrected,” said Jenkins.
The investigation by the PSC exposed the company for inaccurate billing practices, excessive charges, faulty software and equipment amongst other issues. One of the state’s key findings alleges that Central Hudson violated Public Service law and committed negligence when they knowingly rolled out a defective billing system in September 2021. Customers have complained about not receiving their bills for months, receiving multiple bills in one month and being charged inaccurate amounts.
Central Hudson disagreed with the findings of the PSC investigation and has called their claims, “factually inaccurate.” The utility stated that the investigation cast “too wide of a net” as what is considered a “defect,” as well as all new systems have defects when being implemented. Jenkins said Central Hudson is waiting for a final report and ruling by the PSC on the company’s practices, including the rollout of its billing system.
“More than 90% of our customers are receiving bills on time,” said Jenkins. “We understand that this billing transition has been a source of concern and stress and anxiety for a number of our customers. It’s a critical issue and one that we have a large, dedicated team working on to implement these final fixes and get things squared away so we can get folks back to normal and start rebuilding their trust.”
One Saugerties resident, Gina Bravo, had been impacted by the faulty billing system. “I’m in about a 900 square foot mobile home by myself. Single person, no kids and my heating supply is propane. My first winter here, for the months of January, February and March my bills just went through the roof,” she said. “I sent one email to Central Hudson and never heard anything back, but they credited back those three months totally.”
Although Central Hudson fixed their initial mistake, Bravo continued to face difficulties with the company. “After that, we came to summertime and I went from August through December without getting a bill at all,” she said. “Then last winter came and I had about three months of astronomical bills again.”
When she contacted Central Hudson representatives, Bravo encountered incorrect information that only deepened her mistrust of the company. “Every time I contacted them — I called them about four times — they told me it was because of my heat, even though I explained to them that I heat with propane, but they didn’t seem to want to accept that answer.”
“I had one conversation where I was discussing that the increase in usage during the wintertime makes no sense. I run two large air conditioners all summer, and so my summers my bills theoretically should be my highest bills,” stated Bravo. “She told me that I had an analog meter and if I wanted to, I can test myself to see what might be causing the increase in usage. But I don’t have an analog meter, I have the digital smart meter. So they didn’t even have the type of meter on file correctly.”
Bravo is not the only customer to have noticed a large increase in the cost of electricity. “The bills started creeping up. They went from $250 a month to $350 to $450 to $500. My last bill was $719,” said Lankard.
While the cost of electricity has increased due to inflation, customers have expressed concerns with the separate delivery costs they are being charged. Aside from taxes, the main parts of a customer’s energy bill are the energy supply cost and the delivery cost. By law, electricity companies are not allowed to profit from supply costs. Companies like Central Hudson make their money on delivery costs — the price it charges customers to deliver their services. The New York State PSC is said to approve them as well as “intervenors.” Jerkins said intervenors are groups who play a role in setting rates. He said these can be advocacy groups like AARP or local groups like Communities for Local Power.
“Our most recent rate plan, and this is generally the case, was set for three years,” said Jenkins, who noted that delivery charges depend on a customer’s electricity usage. “Your delivery charges on your utility bill are not like your basic service charge for say cable TV. It’s not a flat charge,” he said. “It’s a flat rate, but that rate is volumetric. While the actual per unit per kilowatt hour rate stays relatively fixed, your usage can have an impact on what your total delivery charges are from month to month.”
There have also been complaints about Central Hudson’s Budget Billing program. The purpose of the program is for customers to have their bills spread evenly over 12 months to avoid seasonal fluctuation prices in electricity. Customers pay uniform payments for 11 months, and then during the last month the bill has a “plus-or-minus adjustment” to reflect actual usage and energy prices. Central Hudson claims it reviews Budget Billing balances every six months and recalculates the amount customers are paying based on rate adjustments and usage — but customers have been slammed with an increased bill in the final month of December that they were unsure how to pay.
“We used to be on the Budget Billing, which turned out to be a complete joke because we were paying like $280 a month, not realizing that the actual bill was more,” Lankard said. “So, you could have a bill for like $500 but you’re paying the budget amount which is like $280. Then at the end of the year, they end up sending you a cleanup bill for a ridiculous amount. The budget billing is pretty much useless and it’s almost a trick for people.”
This can also be seen in the case of Toby Rubin and her mother. Rubin, who manages her mother’s finances, knew something was wrong when she saw her mother owed Central Hudson $1,028 in December. Her nearly 100-year-old mom, who receives less than $1,000 from Social Security each month, could not be expected to pay the amount.
Rubin compared her mother’s December 2022 balance to the one she received in December 2021, which was on target at $30.80. The approximate $1,000 increase caused her to begin a personal investigation into the company, in which she would learn how Central Hudson’s faults extend beyond her mother’s case to hundreds of customers across the Hudson Valley. An active member in the Hudson Valley Citizens AGAINST Central Hudson Gas & Electric Facebook group that has over 400 members, Toby has been in contact with multiple local representatives and began her own research into the company when they blundered her mother’s Home Energy Assistance Program (HEAP) credit.
As a low-income customer, Rubin’s mom began receiving $39.40 in credit from HEAP in 2022. Six months ago, Central Hudson stopped giving her mother the monthly credit which she noticed due to her December 2022 bill being so high. When Toby Rubin managed to get through to a call representative, they attributed her increased balance to the company making a mistake. Central Hudson still insisted her mother pay the bill. “They’re saying, ‘No, you had to pay the bill,’ and I’m saying, ‘She can’t afford that bill,” Rubin stated. “There’s absolutely no compassion.” She was also informed that the PSC will be decreasing the HEAP credit her mother receives due to “rising costs.”
Another issue customers have reported is their energy meters being misread when actual readings are conducted. “I’ve been taking pictures of my meter since like August, and I submit my reading to them. The bill’s readings don’t coincide with my picture readings that I take,” said Lankard. “Late last month, for example, they overbilled me by like 700 kilowatts. When I contacted them, they pretty much said, ‘Well, we took an actual reading and that’s what it is and I’m like, ‘No, I took a picture of my meter. I have timestamps picture of my meter, and that’s not what the reading is.’”
On the Central Hudson website, there is a place for customers to submit a picture of their meters if they feel they are being inaccurately billed. However, customers find it unfair that they should submit pictures of their meters to try to get an accurate reading, and believe the company has a duty to bill them correctly each time. “Why are we paying Central Hudson and we’re doing their job?” asked Rubin.
Amidst awaiting the state’s final decision from the PSC, Central Hudson also faces a class action lawsuit filed by the law firm Lowey Dannenberg. The firm alleges the company has participated in “deceptive and improper” billing practices towards consumers that expected their electricity bills to align with their average energy consumption and market rates. Central Hudson is expected to respond to the court action by its April 25 deadline.
The company appointed a new president and CEO in February 2023, replacing Charles Freni with top executive Christopher M. Capone who has been with the company since 2003. His appointment was effective immediately and caught the attention of customers already concerned with the company’s practices. “A key priority will be addressing the frustrations some customers have felt resulting from the implementation of the new customer billing system,” Capone said in a statement. “We have hired a significant number of additional personnel including contact center employees and other professionals to work on these issues around the clock.”
Capone’s appointment came after U.S. Representative Pat Ryan called on former CEO Charles Freni to resign following the company’s response to the PSC investigation. “A transparent process that prioritizes customer input is the only way Central Hudson can resolve these issues once and for all,” said Rep. Ryan.
Additional local representatives have spoken out against issues concerning Central Hudson. New York State Senator Michelle Hinchey currently sponsors a bill to end estimated billing, and the PSC has adopted the bill as part of their recommendations to Central Hudson after their investigation. Currently, the bill is on the floor calendar and was advanced to its third reading on Feb. 6.
“At the end of the day, ending predatory billing practices by utility companies and putting more money back into the pockets of New Yorkers is an issue we can all agree on,” Sen. Hinchey stated in an email.
Customers say long call wait times combined with the enormous amount of people trying to get through to the company have prevented them having their issues swiftly resolved. “People are telling me they’ve waited a month to six weeks to get a phone call back,” said Rubin. If a customer is having difficulty getting through by phone, the company has the option to communicate through a chat function on their website or through social media to have their concerns addressed.
Rubin also expressed how hard it can be for individuals to understand what is going on with their electricity bill. “I think people look at the documents, but I don’t think they really analyze it. They’re just overwhelmed by it at this point,” she said. “It’s taken away the pleasure of people’s lives. It’s taken away their time. It’s taken away their holidays. It’s taken away their comfort zones.”
She advises others that are unhappy with the company to take action. Rubin said to contact representatives like “Michelle Hinchey, Pat Ryan and Didi Barrett.” She also recommends contacting the Better Business Bureau and contacting the Office of the Aging for senior citizen customers.
Central Hudson is waiting alongside customers to see the decision the PSC will make. “We don’t have a timeline on when any further response would be from the PSC,” said Jenkins.
Rubin asks people not to blame the employees of Central Hudson for the issues they are experiencing. “My heart does go out in compassion to the employees of Central Hudson. It’s not their fault. They’re just the messengers.”
Central Hudson is expected to respond to the class action lawsuit by April 25, and there is no current date set for the release of the PSC’s final report.