In response to a blistering report by state regulators, Central Hudson has acknowledged ongoing issues with its new billing system. But the company told regulators that it had taken all reasonable measures to resolve the issues, and that its actions did not warrant sanctions under state Public Service Law.

The utility’s defense came in a response to an “Order to Show Cause” issued by the state Public Service Commission. The order demanded that Central Hudson officials explain why the company should not be subject to civil penalties for the botched rollout of CH’s new “Customer Information System” and subsequent billing issues experienced by thousands of Hudson Valley residents.

The order was based on a report by the commission’s Office of Enforcement and Investigations (OEI), that found the company went live with the new system in August 2021 despite warnings from staff that it was still plagued by critical errors. The report also found that the company ignored employee complaints about inadequate training on the system and sought to downplay the botched transition to the public and elected officials.

At least 11,000 Central Hudson customers were impacted by the billing issues. In some cases, residents received multiple bills with different amounts due. In others, customers received no bills at all for months before they were hit with a backlog of charges all at once. Investigators documented other instances where customers enrolled in the company’s autopay program had thousands of dollars drained from their bank accounts for fees they did not in fact owe. A class action lawsuit filed this month, meanwhile, alleges that the company overbilled customers by charging rates above what could be justified by market conditions and energy costs.

In its response, Central Hudson officials acknowledged that defects in the new billing system had had an “unintended disruptive impact” on customers who experienced “confusion and anxiety” due to inaccurate invoices and other issues.

“Central Hudson has been humbled by the identification of these issues and the resulting impact on customer satisfaction,” the company’s response reads.

CH brass also acknowledged that nearly 18 months after the system went live, problems still persist. The glitches, which the company blamed on the difficulty of integrating and reconfiguring 60 separate systems to work with the new software, was responsible for hundreds of customers receiving erroneous termination notices in September. In the response report, utility officials said that of 113 problems identified in the billing system, just 13 remain outstanding. Those issues, the company said, are expected to be resolved by the end of March.

But even as they acknowledged failures, Central Hudson claimed in its response that it had taken all reasonable measures to remedy the issues including adding staff, increasing training and spending millions on efforts to fix the system. The report also claims that while customers may have experienced confusion, none had suffered actual financial harm from the glitched system. The response also stated that the OEI report “misrepresents and misapplies the facts and the law” regarding the company’s liability for the breakdown.

“A balanced reading of the law will lead the commission to determine that Central Hudson made reasonable decisions to comply with the law, rules and Commission Orders so that it could provide customers with accurate bills as expeditiously as possible during a difficult situation,” the document stated.

Electeds Clap Back

But elected officials, who have hammered the utility over botched billing and other issues, called the company’s response inadequate and repeated their calls for civil sanctions. State Sen. Michelle Hinchey, whose office has fielded thousands of complaints about Central Hudson issues, said she plans to re-introduce legislation that would prohibit the company’s practice of reading electric meters every other month and billing based on estimated usage in the intervening months. Hinchey added that the company should face penalties for the billing debacle.

“Central Hudson’s response is glaringly insufficient for the extensive wrongdoing and economic hardships they’ve caused customers across the Hudson Valley,” wrote Hinchey in a statement Thursday. “I stand firmly behind the PSC’s investigation, the findings of their damning report, and urge the Commission to move quickly toward a penalty process that delivers justice in support of ratepayers and a path forward that ensures the full correction of all past billing errors.”

Meanwhile County Executive Jen Metzger, who prior to her election founded energy consumer advocacy group Communities for Local Power, called Central Hudson’s response “dishonest in a number of respects” and “wholly disrespectful to the stress and hardships the company has caused its customers.” Despite the utility’s claims that it had corrected inaccurate bills, Metzger said she’s continued to hear from constituents who were still waiting to resolve their billing issues after months of waiting.

Like Hinchey, she called for an immediate end to estimated billing. Metzger also said the PSC should take action to recover $21 million in ratepayer funds used to implement the flawed system.

“It is absolutely inexcusable that Central Hudson has yet to fix the problems with this system or appropriately respond to aggrieved customers, and the company's management should be held to account for these failures,” said Metzger.

It will now be up to PSC officials to decide whether to accept the company’s response or to proceed to a penalty phase of the proceedings. “We are evaluating next steps, including whether to seek commission approval to initiate an evidentiary hearing,” PSC spokesperson James Denn said Thursday.

Meanwhile, Central Hudson awaits the results of two more OEI probes into its operations. One probe is looking into the company’s response to a February 2022 ice storm that left thousands of Ulster County residents without power in freezing temperatures — in some cases for as long at 72 hours. The agency is also conducting a broad audit of the utility’s finances and operations.