Roughly 3,400 new Central Maine Power customers that have been drawing electricity for months have not received bills and are being charged for only a fraction of what they actually used, an action that means other CMP customers may have to make up the lost revenue.
The company has decided to bill for only 30 days of service to some new customers, a decision it attributes to two factors: a rash of retirements has left it shorthanded and unable to keep up with the demand for new accounts, and the expectation that it can charge off those losses to other customers, rather than its shareholders.
CMP says it hasn’t bothered to tally the amount of money going uncollected because revenue shortfalls are adjusted in rates each year via an agreement with the Maine Public Utilities Commission. So existing CMP customers are likely to pick up the tab, if CMP’s annual revenues fall below a set target and the PUC doesn’t object to the billing practice.
Barry Hobbins, Maine’s public advocate, said the 30-day billing practice is disappointing. He said it confirms reports he has received from company owners who were worried about being hit with large back payments. He faulted CMP for making a unilateral decision and not consulting with his office, at a time when the PUC is scrutinizing the company’s billing practices.
“They are making a business decision that may affect all ratepayers in the future, in the middle of a forensic audit,” he said.
The revelation is the latest in a string of problems facing CMP. The company has faced a storm of attacks this year over how it treats and bills its customers and whether it’s telling the truth about problems at the utility.
State regulators have launched investigations into storm response, rate charges and company earnings, and protracted deliberations over a proposed transmission line. Attorneys for ratepayers are seeking a class-action lawsuit over extraordinarily high electric bills. They are even alleging corporate fraud – saying CMP trained its workers to blame spiking bills on customers, rather than the company’s faulty billing and metering systems, a charge CMP denies. The investigation into the storm response found that the company acted appropriately.
DATA CAPTURED
Southern Maine’s building boom has led to a surge in requests for new service, CMP says. But the need to hook up all those homes and businesses coincides with a wave of recent retirements in the customer service department, overwhelming CMP’s ability to set up new accounts on time. As a result, CMP said it’s only charging these new customers for the most-recent billing cycle, after the account finally is established. Officials said the situation is not related to its perplexing billing-system problems, already under state investigation.
“We cannot bill a customer until an account is created, creating a record of usage,” according to Catharine Hartnett, CMP’s spokeswoman. “Because the customer did not cause the delay, CMP is billing for (only) 30 days.”
Hartnett said CMP is getting a handle on the backlog. It has filled the open positions and is training workers to create accounts on its new billing system, put in place 13 months ago.
But in the meantime, CMP has chosen not to bill customers beyond the most recent 30 days, even though it can see the amount of power consumed previous to that.
Confidential CMP information provided to the Portland Press Herald/Maine Sunday Telegram indicates that the company’s digital smart meters are capturing and recording past power consumption for months, and that data could be used to recover the cost of service.
In one example, the newspaper was sent an internal email exchange and a computer screen shot from an account for temporary service tied to construction of the new Portland headquarters for Wex, the payment processing firm. It shows that service was set up in April and that a total of 43,297 kilowatt-hours of electricity were consumed through Sept. 5. But the information also shows that CMP only issued a bill for power used in September, for 385 kilowatt-hours.
The amount due was $954.75, well short of the cost of using 43,297 kilowatt-hours. Based on a typical per-kilowatt-hour charge, the total should be at least $6,400.
Herb Adams, a former Portland lawmaker and longtime critic of CMP and its billing practices, said the PUC and the public advocate should intervene and halt the 30-day practice. Adams is among a group of residents that prompted the PUC last July to examine whether the utility is overcharging customers, a case that’s pending.
“It is not just the sum, it’s the symbolism,” he said. “Remember that CMP is a wholly owned subsidiary, layers down, of Iberdrola, a Spanish holding company, one of the largest energy selling empires in the world.”
“Why should Joe and Jane Mainer be forced to pay full freight to pick up the slack for … a mega-monopoly because of CMP’s paperwork mistake?” he added. “CMP’s self-reasoning is so circular it is a spiral, and it leads directly down into everyone else’s wallet. CMP should eat this: Mainers should not pay it.”
‘TOO MANY KWHS TO DISMISS’
CMP workers are aware of the undercharge issue. Concern was expressed in a September email exchange provided to the Press Herald/Sunday Telegram between employees who handle metering and customer service issues and are trying to switch the Wex service from temporary to permanent.
A manager asks: “Is the NA (new account) for the temp in limbo? Can it get processed so we can do the MC (meter change) upgrade? Too many kwhs to dismiss.”
The second worker replies and copies other co-workers to find out what went wrong and to create the correct account.
She replies to the manager: “The customer will only be back billed for 30 days, not the (full amount).”
The customer listed on the bill is Bob Goulet, a regional manager at E.S. Boulos, a Westbrook-based electrical contractor on the Wex job. Reached for comment, Goulet said he never actually sees bills like these and suggested the project’s general contractor, Cianbro Corp., might be responsible. A spokesman for Cianbro said the company would have no comment.
Asked why CMP wasn’t trying to recover the cost of providing power if the smart meters were recording it, Hartnett said automatically recording the data and manually establishing an account are two different things.
“This is not the same as an account being created,” she said. “We do not want to send a multi-month bill to a new customer, if the account creation was our own delay. So as a matter of practice, we bill for the past 30-days’ usage.”
BILLS UNDER SCRUTINY
CMP switched from its 27-year-old mainframe computer system on Oct. 30, 2017, the same day a powerful windstorm knocked out power to more than 400,000 customers. Soon thereafter, thousands of customers began seeing higher-than-expected bills and started complaining. The PUC subsequently hired a consultant to examine CMP’s metering and billing systems. The results of that so-called management or forensic audit are expected to be made public in mid-December.
Hartnett said CMP has notified the PUC of its latest billing problem. A spokesman for the PUC confirmed the agency is aware of the issue. He said figuring out the root cause and who’s responsible will be part of the management audit.
“All billing issues are being scrutinized, including issues where bills have not been sent,” said Harry Lanphear. “How the commission deals with this will be determined after the report is filed. In general, to the extent there may be imprudence on a particular issue, the commission would determine the most appropriate remedy to protect ratepayers.”
GOING FORWARD
But CMP is indicating that it thinks customers – not shareholders – should be responsible for any revenue shortfall, based on an existing PUC agreement designed to help keep delivery rates stable for home and commercial customers.
CMP’s electric rates contain what’s called a revenue decoupling mechanism. Under this arrangement, actual revenues are compared each year with target revenues approved by the PUC. Any difference is either refunded to customers or recovered in rates, with interest. Similar arrangements are used in other states.
So if the unbilled revenue contributes to a shortfall or reduces an overcollection, Hartnett said, customers will share in the impact.
Delayed billing has been a periodic problem for the past two years, Hartnett said.
Between 2009 and 2017, the company added 25,000 or so new accounts, with 10,000 of them created in 2016 and 2017. This year, CMP is expected to add 10,000 new accounts.
“We are not satisfied with our overall level of service on this matter,” Hartnett said. “We are taking an aggressive approach to address the backlog. We are adding new trained resources to enter the new customer accounts into our system in a timely manner. In addition, we are taking steps to address our internal processes to prevent this kind of issue from happening again.”
Staff Writer Eric Russell contributed to this report.
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