BILL NUMBER: S4234A

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the public service law, in relation to the finality of
certain utility charges and the contents of utility bills

 
PURPOSE:

To restrict the ability of utilities to backbill after failing to bill
more than two months; to require utilities to send with every bill the
records of the customer at that address for the past two years.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision one of Section 41 of the Public Service Law
to state that no utility corporation or municipality may charge a resi-
dential customer for gas or electric services that were rendered more
than 2 months prior to the mailing of the first bill to the customer for
such service;

              

Section 2 amends the Public Service Law by adding a new Section 41-a
that states that no utility corporation or municipality may charge a
non-residential customer for gas or electric services that were rendered
more than 2 months prior to the mailing of the first bill to the custom-
er for such service.

These sections do not apply if the failure of the corporation' or muni-
cipality to bill sooner was not due to the negligence or neglect of the
corporation or municipality or was due to the culpable conduct of the
customer.

Section 3 amends section 44 of the public service law by adding a new
subdivision 7 which states that as a part of every billing, the corpo-
ration or municipality shall provide in both a graph and written form
the monthly usage of the customer, the monthly unit charges for usage,
and the monthly billing charge amount to the customer for the prior 2
years of the customer or prior customers at the same address. This shall
apply to both residential and non-residential customers.

Section 4 sets forth the effective date which is on the first of January
next succeeding the date upon which this bill shall have become a law.

 
JUSTIFICATION:

Backbilling:

Utility companies have one job: Provide electric or gas service along
with transparent billing on a timely, monthly basis.

Unfortunately, not all utilities fulfill this simple responsibility.

When a utility company issues irregular or erratically timed bills that
charge for estimated rather than actual usage, customers can be stuck
with confusing and sometimes unexpectedly high bills.



The only thing worse than receiving an unexpectedly high utility bill is
not knowing whether the bill reflects actual usage or whether it's the
result of the company's faulty estimated billing system.

Too many utility companies rely on estimated billing practices that can
cost customers hundreds or even thousands of dollars in unforeseen
charges, resulting from drastic month-to-month charge swings.

Estimated billing can have even worse impacts for customers on automatic
payment plans. These customers sign up for the service expecting to have
their checking accounts conveniently debited monthly for their usual
billing amounts. Instead, many have been shocked to find their accounts
debited-for several times the amount they expected, sometimes totaling
thousands or even tens of thousands of dollars and causing undeserved
financial hardship.

In the Hudson Valley, Central Hudson customers have gone without timely,
accurate bills for periods of as long as six or more months.  In some
cases, Central Hudson issued estimated bills that were wildly inflated.
In other instances, estimated bills were so far short of actual usage
that customers were hit by high "catch up" bills once Central Hudson
finally sent an employee to read the meter. All of this was confirmed in
a detailed report released by the PSC on December 15, 2022 after an
extensive investigation of Central Hudson (Case 22-M-0645).

Utility companies are paid for their services, so their customers
deserve accurate monthly bills. Utilities must either hire more employ-
ees to read meters or install "smart" meters which can be read remotely.
Many municipalities are using smart meters for water usage.  There is no
legitimate reason why electric and gas utilities cannot do the same.

Under current law Public Service Law Section 41 and the rules and regu-
lations of the Public Service Commission (16 NYCRR § 11.14(a), a utility
may not charge a residential customer for gas or electric service which
was rendered more than six months prior to the mailing of the first bill
to the customer unless the failure to bill sooner was not due to the
neglect of the utility or was due to the culpable conduct of the custom-
er. (2)

This limit of permissible backbilling was reduced to four months due to
PSC rulings.

The limit for backbilling is six months with respect to billing to
nonresidential customers as follows according to 16 NYCRR § 13.9(b) (1).

These limits are put in place to compel utility companies to provide
accurate, timely billing. However, its clear that the threat of lost
revenue, after four months for a residential customer or six months for
a commercial customer, is not an adequate incentive.

Section 1 of this bill changes Section 41 of the Public Service Law so
that a utility may not backbill after two months for residential custom-
ers.

Section 2 creates a new Section 41-a of the Public Service Law so that
this requirement that a utility may not backbill after two months
applies to noncommercial customers.

Since utilities are ignoring the current rules with impunity, the only
way to ensure compliance is to penalize noncompliant companies with
significant revenue loss.

Disclosure of Prior Billings:

The only way customers can tell if they are being overcharged is by
comparing their usage and rate with similar periods in the past.  Some-
times, this means comparing the current bill with the bills of prior
owners.

Section 3 of this bill adds a new subdivision 7 to Section 44 of the
Public Service Law which requires, as part of every billing, that the
utility shall provide both in graph and written form the monthly usage,
the monthly unit charges for the usage, and the monthly billing charge
amount of the customer or customers for the past two years at the same
address.

This requirement applies to both residential and non-residential custom-
ers.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

None beyond minimal costs to municipality utilities.

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date upon which it shall have become a law.