PSC should Change Rulings on Misclassified Ratepayer Backcharges

“The PSC’s determination on the Mazzaro’s billing case is extremely unfair. Utility bills are especially complicated and many industry people have a tough time reading their own bill. For the people wronged in this case, having both gas and electric service, things would have seemed even more complicated since up to the early 2000’s they were getting a combined utility bill. This was the case until LIPA had the bills separated. No matter, they paid for a service they did not receive and in most other business situations they would be reimbursed for that. Since gas and electricity is not something you put in a bag and take home, it becomes more difficult to recognize when you have been short-changed, but you would think that the PSC would take this more into account than they have.”

Pair should have noticed gas bill flaw

Updated: July 6, 2011 11:17 PM

Ruth and Salvatore Mazzaro, of Lynbrook, say they

Photo credit: Chris Ware |      Ruth and Salvatore Mazzaro, of Lynbrook,  say they were overcharged more than $10,000 — after being wrongly classified as commercial gas customers for 41 years — and wanted a full refund from National Grid. Instead, they will get about $420. (July 6, 2011)

Sal and Ruth Mazzaro should have been reading their bills and rate brochures.

That, in a nutshell, is the state Public Service Commission‘s response to a Lynbrook couple who argued they were overcharged more than $10,000 — after being wrongly classified as commercial gas customers for 41 years — and wanted a full refund from National Grid. Instead, they will get about $420. They already have filed an appeal and plan to hire an attorney to represent them.

The Mazzaros say bills are so complicated and cryptic that they never knew until recently they were being billed for decades at the higher rate that commercial customers pay.

“This is crazy,” said Sal Mazzaro, 76, who was notified of the PSC’s decision by letter last week. “Aren’t they [National Grid] responsible for some part of this?”

The dispute is one of several that have come to light in recent months following revelations that customers may have been overcharged because they were wrongly classified.

The Long Island Power Authority, in a separate case last month, refunded a Patchogue couple almost $8,000 for a 10-year misclassification of their electric rate as commercial instead of residential. The PSC oversees its gas business, but LIPA isn’t subject to PSC oversight.

LIPA admitted the Rizzo family’s home never should have been classified as commercial.

But others pressing complaints to Long Island utilities of overcharges that went undetected for years are finding redress harder to come by.

The Mazzaros say they’ve been misclassified for the 41 years they’ve lived in their home, for both gas and electric service. Pointing to the $420 refund they received for a year’s worth of gas overcharges, they estimate the excess payments plus interest and utility taxes over the four-decade span easily tops $10,000. Their son discovered the error when he happened to examine their utility bills in March.

In limiting the Mazzaros’ refund, the PSC cited the annual rate brochures and monthly bills mailed to the couple.

The commission found the notices “reasonable and adequate in providing rate information should a customer have a question about the rate at which they are being billed,” the PSC letter to the couple states.

The couple’s electric-bill dispute with LIPA is still pending. LIPA declined to comment.

Meanwhile, a utility-bill auditing firm that filed a dispute on behalf of the College at Old Westbury said it was recently notified that a challenge for years of overbilling at an incorrect rate class would result in a refund for only several months.

That decision, according to Tom Ranallo, president of Buffalo-based Troy & Banks, means the college won’t get $200,000 in overpayments he calculates it is owed, a decision he plans to dispute. Other utilities, and even LIPA and National Grid until last fall, he said, gave refunds for up to six years of billing overcharge errors.

“I’m shocked and I’m concerned for other consumers that are going to find themselves in the same position” as Old Westbury, Ranallo said. He filed a similar case on behalf of the New York State Parks service against LIPA, whose billing disputes are handled by National Grid, and received a similarly limited refund.

PSC spokesman James Denn said the six-year rule doesn’t apply to a “rebilling/refund for an incorrect rate.”

LIPA, whose board of trustees intervened on behalf of the Rizzos after their case became publicized last month, ordered National Grid to improve its customer service response.

In a statement, National Grid said: “National Grid will continue to follow practices outlined by PSC rules and regulations. We review issues on a case-by-case basis and work to resolve them with our customers.”

The PSC’s decision to back the limited refunds drew the ire of two county legislators, who say they will ask their state counterparts to pass a bill demanding that rate notifications and bills are easy to understand.

“The Mazzaro case raises serious questions regarding the practices of National Grid,” said Suffolk Legis. Edward P. Romaine (R-Center Moriches), adding he was “troubled the PSC appears to have abandoned the six-year review and correction standard established by both past practice and New York State law, and instead has put the burden on the customer.”

Nassau Legis. David Denenberg (D-Merrick) said he plans to write to state legislators and Gov. Andrew M. Cuomo that utilities should be forced to make clear to customers their rate classification. He said the Mazzaros should receive a refund for the full 41 years of suspected overcharges.


About lipaoversight

LIPA Oversight Committee was created to analyze the rates and practices to determine if it is working in the best interests of the Suffolk County ratepayers
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