An independent audit has concluded that skyrocketing electricity bills last winter cannot be blamed on Central Maine Power’s new billing and metering system, but the company made the situation worse with its poor response to a flood of customer complaints.
A report released Thursday by the Liberty Consulting Group identified “significant gaps” in the rollout of new billing software, noting that lapses in testing and training personnel resulted in errors that affected more than 100,000 accounts.
But overall, the company’s meter system accurately records and bills customers, auditors said. Errors “proved minimal in number and in dollar value,” they reported.
High bills last winter – up to four times what some customers expected – were the result of cold weather and a rate increase, not a systemic problems, the report concluded. Hundreds of customers filed complaints with regulators over what they saw as exorbitantly high bills.
“Our analysis showed usage at levels consistent with the expectations that the cold weather of last winter would suggest,” the authors of the report said.
But bad customer service by CMP exacerbated the problems, the report added.
Inadequate staff and management experience meant long delays responding to and resolving customer complaints, starting with the rollout of the new system through an intense cold snap at the end of 2017. Call handling time increased 22 percent and a high rate of customers abandoned calls before talking to a representative, a result of short-staffing and a lack of experienced supervisors. These problems lingered through summer 2018, auditors noted.
“The extent and degree of performance degradation contributed strongly to a level of customer frustration, doubt and skepticism already high due to uncharacteristically large bills last winter,” auditors said.
Central Maine Power President Doug Herling, in a prepared statement, admitted the company made mistakes, but hoped the Liberty report gave customers confidence its systems work.
“More than anything, CMP failed to deliver the level of service that our customers expect and deserve when we introduced the SmartCare billing system,” Herling said.
The company has hired more staff, unveiled a new website and created a price guarantee in response to the problems it experienced, he said.
“This is not acceptable. It is very important that customers understand that we acknowledge our full responsibility where we fell short of the mark,” he said.
REPORT UNDER REVIEW
In July, the Public Utilities Commission hired Liberty to investigate CMP billing and metering issues, as well as the company’s customer service and communications practices. Auditors examined whether CMP adequately responded to customer calls within a reasonable time and how it reacted to customer complaints about high bills.
Liberty was paid more than $400,000 for its work.
Commissioners will review the report and decide how to proceed during a meeting Jan. 8, PUC Administrative Director Harry Lanphear said.
“There is a variety of options they could pursue,” including dropping the case, continuing their investigation or moving it into a rate case in front of the group, he said.
The audit findings represent the most comprehensive effort to unravel the billing mystery, one of several challenges facing Maine’s largest electric company.
In July, the PUC opened a separate probe into whether CMP is overcharging customers, following a complaint filing with the agency. That investigation is still pending.
Public Advocate Barry Hobbins, the state’s consumer watchdog, said his office has retained an accounting firm to review the audit findings. The PUC should hold a public meeting to explain the findings and answer consumer questions, Hobbins said.
“I think it is a matter of transparency, and a matter that the public needs to know all steps were taken and it was a thorough process,” Hobbins said. “Unless there is a good explanation, I don’t think the ratepayers in Maine will feel duly satisfied with the results of the audit.”
COLD SNAP BLAMED
The audit findings come roughly 14 months after CMP updated its aging billing system and less that a year since customers began complaining about high bills and unexplained charges. Those complaints climaxed last winter, compounded by an extreme cold spell that increased energy use and a scheduled hike in the state’s default rate for electricity supply.
At the time, some customers were reporting bills that were triple or quadruple what they paid during the same period in previous years. In April, CMP reported that 97,000 individual accounts saw bills increase 50 percent or more in December, January and February.
Customers in 22 other states experienced similarly high bills because of the cold snap, according to a Portland Press Herald analysis.
While the audit has been underway, the PUC has been requiring home customers to pay a portion of their bills in line with the previous year’s delivery charge to stay connected. That rule, approved in April, assumes customers with disputed bills are using some electricity.
Joseph McKenny, 35, said he is on a payment plan with CMP after he stopped paying bills he thought were inaccurate. Electricity use at his home in Biddeford inexplicably soared since last November, McKenney said. When he called CMP, they told him he must have a new appliance or be using more power, even though neither of those things was true, he said.
“Unless they were misreading my usage from 2005 to 2017 and now it is correct it just doesn’t make any sense,” McKenny said.
The audit didn’t have the answer he wanted, and he thinks something is still wrong with CMP’s system. But he’s resigned that he, and thousands of other customers, now will have to pay high electric charges.
“There’s not much we can do,” McKenny said. “We count on the PUC and we count on these auditors. We need the power so we are kind of stuck with it.”
OTHER CONTROVERSIES
The audit followed media reports in May that CMP had known for months that its new billing software was rife with problems.
More than 250 pages of documents reviewed last spring by the Portland Press Herald showed persistent problems. The internal documents, which were filed at the PUC, portrayed a company desperately trying to understand issues with its new billing system and how to fix them.
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 CMP customers.
The company, a subsidiary of Spanish power company Iberdrola, also faces ongoing opposition to its plan to build a new transmission line from Quebec into western Maine to carry Canadian hydropower to Massachusetts.
Rep. Seth Berry, D-Bowdoinham, a frequent CMP critic, linked the two controversies in a statement Thursday.
“Instead of ensuring that its billing system worked, and instead of hiring enough employees to meet Mainers’ needs, CMP ignored its problems and cut corners, all the while chasing lucrative regional energy corridors on behalf of its investors overseas,” Berry said.
This month, CMP abandoned plans to seek PUC approval to charge ratepayers to cover the costs of providing electricity to thousands of new customers who weren’t billed for their service. The reversal came after the Portland Press Herald/Maine Sunday Telegram reported that about 3,400 new electricity customers weren’t billed for months because of delays in setting up new accounts. The company initially indicated that it might seek to have the lost revenue covered by other customers under a formula used in annual rate-setting decisions at the PUC.
Staff Writer Tux Turkel contributed to this report.
Peter McGuire can be reached at 791-6325 or at:
pmcguire@pressherald.com
Twitter: PeteL_McGuire
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