Amid Billing Fiasco, Hudson Valley Utility Pushes for Steep Gas and Electric Rate Hike

The problems date back to 2021, when the utility switched to a new billing system that a state investigation later found “was riddled with Company missteps” and “contained hundreds of programming errors and defects that resulted in billing overcharges and delays for thousands of customers.”

The utility claims the bugs are largely fixed and that the rate hike will fund physical infrastructure upgrades and other routine costs.

“While a very small percentage of customers may still receive delayed bills or bills that require adjustments, we have resolved many of the issues and nearly all customers are now receiving on time and accurate bills,” said Joe Jenkins, a spokesperson for Central Hudson, which delivers gas and electricity to nearly 400,000 customers. “The system now is performing at, or very close to, the levels of our legacy system prior to cutting over.”

But Hudson Valley residents have continued to report maddening issues.

“In May of 2023, one constituent saw eighty transactions in one day, with twenty-six bill reversals, twenty-five actual bills, seventeen other charges, and twelve credits,” wrote Assemblymember Sarahana Shrestha, who represents the Hudson Valley, in a recent motion asking regulators to reject the rate increase. “She has no confidence in paying what she has been told she owes until her bills have been verified to be correct.”

“It’s absolutely unacceptable for Central Hudson to raise costs on our hard-working families, who are already under serious financial pressure, especially until it fixes every one of its billing issues,” said Pat Ryan, who represents the Hudson Valley in Congress.

After the system launched, more than 8,000 accounts were overcharged. Some customers saw huge sums of money automatically withdrawn from their bank accounts based on “erroneous billing calculations.” One customer, typically billed for about $500, saw withdrawals from two bank accounts for about $12,000 and $16,000.

Under pressure from local and federal lawmakers, Central Hudson’s board of directors ousted the company’s CEO earlier this year. The Public Service Commission conducted an additional audit and made recommendations for improvements, including that Central Hudson read meters monthly, rather than bimonthly, to improve accuracy, and that the company develop plans to measure and improve customer service. In July, Central Hudson agreed to pay for a state-appointed independent monitor to oversee the correction of billing system errors.

Just a few days later, the company filed a request for a rate hike — an approximately 16 percent increase on electric bills and 19 percent for gas. That’s about the size of the rate hike state regulators approved for Con Edison in July, and what the state’s largest utility, National Grid, is currently seeking. Much of Central Hudson’s request was for infrastructure upgrades, but “key elements” of the rate plan also include customer service improvements and the switch to monthly meter readings.

And third, it argues that the state needs to investigate whether the company’s requests related to customer service and billing would improperly charge ratepayers for its own “imprudence.”

Legally speaking, shareholders — not ratepayers — are required to eat the costs of a company’s mismanagement. The Department of Public Service concluded that the company’s expenditures on the upgrades “were clearly imprudent” in its December 2022 report, and asked the Public Service Commission to open a “prudence proceeding” to assess which of the company’s expenditures could legally be passed on to ratepayers. The PSC has not yet done so.

“They want more staff to help with customer service cases. They have a whole question about IT costs. What are these costs? Are you trying to enhance the system you have, or are these costs being used to fix the system?” asked Laurie Wheelock, PULP’s executive director and general counsel. “Should the ratepayers be paying for that?”

Jenkins, the Central Hudson spokesperson, said those expenses weren’t related to the billing issues. “Our proposed rate case is designed to meet business needs looking forward,” he said. “The additional customer service staff and IT upgrades are to meet those needs and not to make up for expenses associated with the implementation of our billing system.”