Hochul calls for investigation into utility tactics to collect overdue bills

Gov. Kathy Hochul on Wednesday called for a statewide probe following revelations in Newsday of aggressive bill-collection tactics described by a PSEG Long Island supervisor which also prompted two consumer watchdog groups to demand answers. 

"I have directed the Department of Public Service to launch a statewide investigation to determine whether these offensive comments reflect the views of one person or point to a more widespread problem," Hochul said of comments by the supervisor, who joked that power shutoffs can motivate late-paying customers because "people think much better in the dark."

Hochul demanded that PSEG Long Island "take every action necessary to rebuild trust with its customers, many of whom are struggling with high energy bills that are no laughing matter."

Earlier Wednesday, the Public Utility Law Project and AARP called for legislative hearings "to determine if our laws need to be amended to provide more consumer protections from apparent aggressive and unacceptable debt-collection business practices by New York utilities."

Hochul said she expected PSEG to take "swift and decisive action" in the matter. "Making jokes about shutting off power to vulnerable customers is completely unacceptable," she said.

A recording of an industry conference panel session in Florida obtained by Newsday revealed that PSEG supervisors had ramped up tactics for collecting overdue bills, including threats of shutoffs, regular communications demanding payments and regionally targeted collection efforts. The company plans to collect from the estate of dead customers and has a contest for debt collection agencies that rewards those that produce the best results, according to the recording.

The PSEG supervisor also described how his team can get an elderly customer to pay. On day 17 within a 20-day window of a potential shutoff, he said, "I make another outbound call and say, ‘Hello, grandma, I’m coming if you don’t take care of this issue,' right?"

PULP and AARP called the comments outlined in the story "unacceptable" and said they show a "callous disregard" for utility ratepayers.

"This complete lack of respect for the elderly and hardworking people struggling to pay their bills has no place in our state," the groups said. "New Yorkers deserve and need better when interacting with their utility."

Sandra Webb, a 74-year-old ratepayer from Elmont, said she has grown accustomed to PSEG’s shutoff threats. "They said they could turn me off whenever they please," she said, because she’s sometimes late paying a $4,300 bill balance. She’s on a payment plan of $230 a month but sometimes neglects to pay the bill.

"They like to give termination notices," she said. "I’m used to them. I kind of pile them up, then I call them up and say, what is this? They say this is the rule."

PSEG in a statement said it "strives to protect all of our customers, including the most vulnerable. Shut-off of power is a last resort that comes after many months of multiple attempts to contact a customer, by phone, email and in person, to discuss a solution tailored to their needs."

LIPA, which owns the Long Island grid managed by PSEG under a recently renewed five-year contract, said in a statement that it "expects all customers facing financial hardship to be treated with patience, respect, and offered real help."

"Any suggestion of indifference or levity around shutting off electric service is unacceptable, and any attempt to connect those comments to LIPA-approved budgets or performance metrics is misplaced," the authority said. "PSEG Long Island has advised us that it is investigating this incident, and we expect appropriate corrective action to be taken."

PSEG spokeswoman Katy Tatzel previously had said a Newsday synopsis of the conference comments "does not align with our values and will be thoroughly investigated." She said PSEG "recognizes the hardships many of our customers face and takes pride in the many programs available to help."

Calls for a state probe come just over a month after the Public Service Commission adopted new "extreme heat consumer protections" for utility customers who face shutoffs during the hottest days of the year. A copy of the state order indicated state utilities successfully influenced the rules to persuade regulators to raise the designated extreme-heat threshold to 90 degrees to forestall a shutoff, over one favored by consumer groups such as PULP of 85 degrees.

LIPA and PSEG may adopt the new measures but are not obligated to under a 2013 state reform law that gave DPS only "review and recommend" oversight of LIPA.

DPS said it has an "expectation that LIPA and PSEG LI would adopt commensurate consumer protections" for Long Island’s 1.1 million ratepayers by the state rollout June 1.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.