CASE STUDIES IN HANDLING OF CUSTOMER DISPUTES COMMISSION DECISIONS ON THE COMPLAINTS

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Kristopher Hodges
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1 CASE STUDIES IN HANDLING OF CUSTOMER DISPUTES COMMISSION DECISIONS ON THE COMPLAINTS Tuesday, 24 May 2011 (Parrish Consumer Session Two) Meetings with Kosovo ERO Denise Parrish Deputy Administrator Wyoming Office of Consumer Advocate

2 CASE NUMBER ONE: FROM STATE OF MARYLAND; COMPLAINT OF RESIDENTIAL CUSTOMER FOCUS OF THE COMPLAINT: Utility pole on the family s summer home property was replaced by BGE (utility) without providing the homeowner prior notice of the replacement activity RELIEF SOUGHT: Customer wanted the replacement pole moved to the side of the house, along the property line, similar to the placement of other poles in the area View from the Order 1. No dispute of the facts that give rise to the complaint. 2. Complaint arises as a direct result of the manner in which BGE has treated the customer. Noticing tree trimming a week before pole replacement project Going onto property, digging a hole, doing significant damage to yard, without prior notice of intended action Refusal to accommodate request to move the pole to another location Wide range of cost estimates Threatening to have customer arrested 2 P age

3 3. BGE Response Response to an emergency It had the right to enter the property without notice Would have interfered with efforts if it had to negotiate with every customer Actions consistent with the tariffs 4. Frustration of the customer is understandable 5. No support that pole replacement program was in response to an emergency 6. The outage that BGE was responding to was five months prior to the pole replacement activity. In the meantime, BGE planned, engineered the project to accommodate increased customer demand 7. No support that there was an emergency that compelled immediate access to the customer s property 8. Posting of the tree trimming notices was not understandable at all. 9. Correct that BGE was not required to notify the customer of the pole replacement activity. However, once the customer contacted the company, it should have done a better job of responding to the customer s concerns. 10. No evidence that if BGE had to negotiate with this customer on pole placement that it would have been overrun with calls from other property owners. 11. The mere fact that BGE had the right to enter the property without notice does not mean that it should without regard for the customer s concerns. This is especially true when no pressing emergency. 12. Customer was given the run around. 13. Would have been better to have a knowledgeable BGE person with authority to communicate with the customer. 3 P age

4 14. BGE should have provided the customer with a definitive estimate as to the cost of moving the pole. 15. BGE should have handled this situation in a more accommodating manner, seeking to secure a resolution that satisfied the customer rather than having a disgruntled (unhappy) customer dissatisfied with BGE s service. 16. HOWEVER, there is nothing in the conduct of BGE that violates any tariff or regulation. 17. BGE is obligated to repair the damage or to reimburse the customer for costs incurred to repair the property. 18. COMPLAINT SHOULD BE DISMISSED 4 P age

5 CASE NUMBER TWO: FROM STATE OF FLORIDA; COMPLAINT OF VERY LARGE CUSTOMER FOCUS OF THE COMPLAINT: Review of (existing customer) Kmart s accounts showed that there was a deposit requirement of $1,399,320 but the deposit on hand was only $1,100,000. Demand for an additional deposit was based on the review of the customer s parent s financial condition and credit ratings. Customer complained about the demand for an additional deposit amount RELIEF SOUGHT: Customer asked FPL (utility) to stop demanding the extra deposit and to continue the provision of electric service Customer also seeks return of its $1,100,000 deposit Customer asks for an order establishing standards for determining the satisfactory credit rating of existing customers View from the Order 1. Kmart has not set forth adequate justification as to why continued deference should not be given to FPL in regard to the specificity of its deposit standards. 2. A change in a customer s creditworthiness reasonably qualifies as a change in customer status, such that it may merit reevaluation of that customer s deposit requirements. 3. FPL may wish to consider revising its tariff to specifically address its deposit review processes and standards, in order to avoid future confusion this point. However, there is not a requirement that a tariff addressing additional deposits must necessarily be all-inclusive. 4. The Florida rule plainly contemplates the possible assessment of an additional deposit from an existing customer. 5 P age

6 5. Kmart filed for bankruptcy (reorganization under Chapter 11) in As part of that FPL, a creditor of Kmart in the bankruptcy, lost a substantial sum of money. This, along with the concerns of the credit rating agencies, appears to support FPL s re-evaluation of the adequacy of the deposit. 6. The purpose of security deposits is to protect the general body of ratepayers in the event of default by one. When the assets and liabilities of a corporate entity change, the risk-of-non-payment also changes. 7. Information provided by FPL later showed that in 2005 (the year of the complaint) 187,180 customers were billed an additional deposit. (12,432 of them commercial accounts). 8. KMART S COMPLAINT WAS DENIED. 6 P age

7 CASE NUMBER THREE: FROM STATE OF WYOMUING; COMPLAINT OF COMMERICAL CUSTOMER FOCUS OF THE COMPLAINT: Customer alleged that utility had not properly placed it on the right rate schedule for electric utility service, resulting in overcharges for more than 40 years RELIEF SOUGHT: A refund of overcharges of more than $900,000 plus damages plus interest plus hearing costs A plan to assure that the overcharging situation would not occur in the future Decision from the Order 1. The Commission does not have the authority to award costs, attorney fees, and interest. 2. A demand component (a type of capacity charge) is designed for a commercial customer who may determine that it needs the larger capacity based on equipment needs, time of day needs, or other concerns. A demand based rate schedule, generally, imposes a fee for the demand and additional, a fee for the commodity used. These components vary from rate to rate, but in general, are designed to provide customers with a more appropriate measure of their electrical usage. 3. There is no evidence to support that the customer was a capacity intensive customer. Thus, a capacity charge (or demand rate) is inappropriate for such a customer. 4. The utility s position does not make sense, since on the one hand it argues that it (the utility) should not be held accountable for understanding the load requirements of its customers but that the former utility office manager should be held accountable. But, knowledge is not the deciding factor. 7 P age

8 5. The utility is in the position to not only know the load requirements of its customers but to be able to analyze those peak loads and kwh usage in relatively fine detail. 6. While the customer was on the wrong rate, there is no finding that the utility intentionally placed and kept the customer on the wrong rate. The Commission is not placing blame, just trying to fix the problem. 7. The law provides a remedy for cases such as this. A refund is required for a customer who has been billed in excess of what it would be charged under the correct rate schedule. 8. The finding and decision are limited to the unique facts presented in this case. 9. It is the Commission s view that the utility is in a better position to analyze the load and usage requirements of its customers. Indeed, the Company s presentation of cost of service studies in formal rate cases speaks to its knowledge of customers, their usage, and load requirements. 10. Whether the utility chooses to undertake load and usage analysis of customer classes so as to prevent future refund potentialities is a decision that is up to the Company. It may be wise to do so. 11. WE BELIEVE A REFUND IS PROPER. 12. THE COMPANY HAS 15 DAYS FROM RECEIPT OF THE ORDER TO CALCULATE THE OVERCHARGES FROM JULY THEREAFTER, THE COMPANY SHALL HAVE 15 DAYS TO ISSUE A REFUND CHECK. 8 P age

BEFORE THE ARBITRATOR. In the Matter of the Arbitration of a Dispute Between POLK COUNTY JOINT COUNCIL LOCAL 774, AFSCME, AFL-CIO.

BEFORE THE ARBITRATOR. In the Matter of the Arbitration of a Dispute Between POLK COUNTY JOINT COUNCIL LOCAL 774, AFSCME, AFL-CIO. BEFORE THE ARBITRATOR In the Matter of the Arbitration of a Dispute Between POLK COUNTY JOINT COUNCIL LOCAL 774, AFSCME, AFL-CIO and POLK COUNTY Case #119 No. 67859 Appearances: Steven Hartmann, Staff