February 21, 2020
Business Latest News | Paul LePage | Bangor Metro | Central Maine Power | Today's Paper

Maine utilities regulators say CMP must compensate customers for ‘past failings’

Lori Valigra | BDN
Lori Valigra | BDN
Maine Public Utilities Commission Chairman Philip Bartlett (center) answers questions by reporters Thursday in Hallowell following the commission's rulings on Central Maine Power's rate and billing cases. He is flanked by commissioners Randall Davis (left) and R. Bruce Williamson.

HALLOWELL, Maine — Maine’s top energy regulators handed consumers a win on Thursday when they ruled unanimously that Central Maine Power must compensate customers who had a billing error — regardless of whether they had previously filed a complaint.

In a second case, they ruled unanimously that CMP’s poor performance warrants a more severe “management efficiency adjustment” that could cost CMP shareholders $10 million. That means CMP’s profits would be at least $10 million less for the next 18 months.

The Maine Public Utilities Commission’s rulings Thursday closed out two years of public hearings and complex internal examinations on two cases, a metering and billing case and a rate case.

At stake were rulings on whether the commission would hold CMP and its billing system responsible for the high bills, whether it would allow customers to continue deferring contested parts of high bills and whether it would allow CMP to raise rates and by how much.

“If there’s been an error in their bill, [customers] will be refunded,” commission Chairman Philip Bartlett said. He said CMP has already refunded $5 million to customers and the commission has helped customers recover another $350,000.

He said the $10 million earnings penalty is the largest in the commission’s history.

“The widespread confusion caused by the billing errors was compounded by poor customer service,” Bartlett said. “To right the ship, CMP must take responsibility for past failings.”

Bartlett said each high-usage complaint should be addressed on a case-by-case basis and that the current practice of delaying contested portions of bills will continue.

The commissioners also ordered a management audit to see where there might be problems within CMP.

Bartlett and commissioners R. Bruce Williamson and Randall Davis based their rulings on recommendations in two earlier reports by commission staff and lawyers.

“The penalties are significant,” CMP spokeswoman Catharine Hartnett said. “The [staff] reports lifted the lid on what we expected.”

She would not comment about the potential effect on overall CMP revenue. CMP has no plans to appeal the rulings at this point, she said.

The cases attracted high scrutiny from customers, regulators, the public advocate and lawmakers, with the billing case alone drawing close to 200 public comments on the commission’s website and the rate case more than 250.

“I am pleased that accountability by CMP was the strong message here,” Public Advocate Barry Hobbins said. “Considering the severity of CMP’s imprudence, it was a good decision. That $10 million is a real tough hit for CMP.”

He said this should cause a monumental change in CMP’s attitude. The utility’s management has to date strongly defended its practices. Hobbins said CMP President and CEO Doug Herling called him last night saying he wanted to turn the page and be more open to talking.

Valerie Harris of Brunswick, a CMP customer and intervenor in the case, said the rulings were a good start, but “there’s a whole lot more to do. This needs to continue in court for people to really be compensated.”

The billing issues escalated after the October 2017 windstorm that cut power to thousands of CMP customers, some for up to a week. At the same time, CMP was starting up its new SmartCare customer care and billing system. Shortly thereafter, customers began complaining of unusually high bills, with the complaints continuing today.

In early January, the commission’s staff issued two reports with recommendations on the cases. It found no systemic problems with CMP’s billing and metering system, but ordered the company to hire an independent company to test specific issues that have not been resolved.

And while the commissioners today approved the two reports with the exceptions they noted in their deliberations, they still agreed with staff findings that CMP’s system is working correctly.

“By and large the meters are accurately reporting usage and that usage is being reported accurately to the billing system,” Bartlett said. “But there still are individual issues.”

The staff also recommended a 2 percent increase in an average residential bill each month starting March 1. That is less than half of what CMP was originally seeking. The increase is for improvements to customer service and reliability.

The commission said that even with the rate increase, customers in March will pay 7 to 8 percent less than a year ago because there also was a big decrease in the standard offer price of electricity in January.

In addition, the commissioners said the payment program that defers contested parts of bills will continue, and that it will be moved from CMP handling it to the commission.

In its response to the staff reports, CMP had said the recommendation would penalize it too harshly and cited worries about possible downgrades to its credit rating. If that happened, it could be more difficult for the company to attract investment to grow.

A potential class-action lawsuit still is in the works over the high bills. Sumner Lipman, one of the lawyers on the case, told the BDN recently that he would seek class-action certification for the case after the commission made its ruling.

 


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