On Thursday, June 20, the New York State Public Service Commission approved a $62.59-million settlement which resolves the investigation into past billing system failures by Central Hudson Gas & Electric. The settlement represents six percent of the revenue that the utility reported generating in its 2022 financial report from its 315,000 electric and 90,000 natural-gas customers in the mid-Hudson region.
The shareholders, not the ratepayers of Fortis, the Canadian-based holding company which owns Central Hudson, must pay this penalty for installing a botched billing system which wreaked havoc for months afterwards among tens of thousands of ratepayers.
The Fortis shareholders are also expected to pay the near-$6.3 million associated with moving Central Hudson away from its controversial practice of estimating what it sells to its ratepayers, neglecting to confirm whether the mechanical meters agree with the estimates.
“Customers rightly expect to receive timely and accurate bills for their utility services,” confirmed PSC chair Rory M. Christian. “Our investigation and prudence review and audit found that Central Hudson wasn’t meeting this basic expectation.”
Failing to adopt and conform to a schedule of monthly meter readings by October 31, 2024 will cause the utility company to forfeit an additional $2 million.
In their 123 page report examining Central Hudson’s billing system which was released with the announcement of the settlement, independent third party monitor PA Consulting concluded that Central Hudson had now “resolved critical billing issues” and that the billing system “had reached a stable current state”.
“However,” the third party monitor continued, “PA has also found in the event of initiating new transformational projects or if it is faced with unforeseen challenges in the future, such as the sudden customer transfer from Columbia, foundational strategic issues pose significant risk to Central Hudson’s ability to sustain this stable state”
Before pursuing any future projects which may be anticipated to broaden and adapt project-level efforts into company-wide standards, PA suggested some foundational strategic recommendations that Central Hudson should adopt.
“I want to thank the chair Christian and the commission for today’s decision, which rightly penalizes Fortis/Central Hudson shareholders,” said Ulster County executive Jen Metzger, “including the company’s top management, for the harm inflicted on thousands of residents and small businesses by mismanaging billing and cutting costs for the sake of profit.”
According to the utility’s financial report, in 2022 Central Hudson, which employs 1130 people, reported $1.02 billion in gas and electric revenues.
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