The owner of a Bohemia frame-making company who raised objections to a utility practice of locking customers into a more expensive rate with a “no-exit” clause has received nearly $50,000 in credits and refund checks for his own misclassification.
Jamie Hirsch, owner of Structural Industries, a picture-frame maker in Bohemia, said the first check from PSEG Long Island for $7,337.26 arrived and another for $8,027.67 is in the mail. PSEG, which confirmed the amounts, has also issued a credit that erased some $34,575.21 in past-due charges after finding that he had been misclassified under rate 285 when his usage made him eligible for the less costly rate 281.
“They did the right thing,” said Hirsch of PSEG. “They calculated everything they owed me, plus interest and certain late charges. I’m thankful. They were very helpful.”
Jeff Weir, a PSEG spokesman, said the utility determined that conflicting information in Hirsch’s application for service should have prompted the utility to follow-up with him to clarify his proper rate classification. PSEG took over operation of the system in 2014, years after Hirsch applied for service.
“This case is an example of how PSEG Long Island is changing the way we do business and better serving our customers,” Weir said. “We are creating a culture that embraces change and improvement at PSEG where our employees actively seek to find ways to improve our level of service every day.”
Hirsch appeared in a Newsday story about the rate issue in July. He and his wife, Laura, also attended LIPA board meetings explaining the problem and requesting a refund. LIPA board member Jeff Greenfield urged LIPA to address the problem expeditiously this summer on behalf of all affected small businesses.
David Lyons, PSEG’s newly named vice president for business services, briefed LIPA trustees on a PSEG analysis that found approximately 1,200 business and municipal customers had usage that fell below the threshold for rate 285. Around 680 would benefit by switching to another rate class, he said, while the remaining 520 would see lower bills by remaining in 285. Telephone reps were briefed on the changes to help customers through the process, he said.
PSEG has already sent letters to all those customers, with detailed analysis of their costs under both rate classes, and offering more help to make a decision about switching. The new rates for those who switch will take effect Jan. 1, but it will take PSEG around 12 weeks to change all affected meters, Lyons said.
PSEG made the decision to eliminate the no-exit clause and modify the rate after an internal review and a recommendation from the state Department of Public Service.
The 285 rate is intended for customers using at least 145 kilowatts of summertime energy during monitored 15-minute periods on special meters that big commercial accounts are assigned. Complaints about the misclassifications began after LIPA decided in 2011 to increase the daily meter fee for customers in that class, to to $300 a month, from $30.
Douglas DiCeglio, president of Lynbrook-based Utility Rate Analysis Consultants, which reviews customer bills, won a $52,628 refund for the Sands Point Golf Club on the rate 285 issue, but was denied refunds for two Suffolk schools that he said never met the threshold for the 285 rate.
He urged PSEG to review all accounts and issue refunds to all that are eligible. A utility is “not allowed to selectively give back refunds,” he said. “It’s only fair that everybody gets it.”