John Puccio and his wife were three months into extensive renovations to their newly bought and largely empty Garden City home in March when they received a PSEG bill for "actual charges" that sent them reeling: $2,597.05.

The utility said the Puccios had used 13,371 kilowatt-hours of electricity in just under two months -- more electricity than most Long Island homeowners use in a year.

It turns out the utility was wrong.

PSEG Long Island last week confirmed that the initial reading of the Puccios' meter in November was inaccurate. "An actual reading was done but it was incorrect," the company said in response to Newsday questions. The couple took their complaint to the Department of Public Service and Newsday, and on Wednesday they were credited $3,008.21.

The mistake illustrates PSEG's challenge in getting to and properly reading 1.1 million customer meters, and having to rely on estimates when it cannot. At the end of March, some 5,755 PSEG customers had bills based on long-term estimates, meaning meters hadn't been read for six months or more for home customers. The number was reduced in April.

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Few electric appliances

Puccio said he knew his bill was wrong because nearly all electrical appliances had been removed from the house, which has natural gas heat. He called in a meter reading himself in March.

"I don't believe they were reading the meter," Puccio said.

PSEG, which took over operation on Long Island's electric grid from National Grid in January of last year, says the problem was that the initial "turn-on" meter reading that started the Puccios' account after they bought the home in November was incorrect. The utility also used a second estimated "turn-on" figure that was based on a reading from a prior customer in the home.

PSEG spokesman Jeff Weir said the company takes complaints by the Puccios and other customers seriously. "We are doing everything in our power to improve the processes we have here," he said. "Some of the things we inherited were not up to our standards."

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On Wednesday, PSEG also assigned the Puccios a new start-up meter reading that is thousands of kilowatt-hours less than they were previously billed.

Other ratepayers have complained of excessively high bills after months of estimates. PSEG has said part of the problem stemmed from harsh winter weather that prevented readers from getting to meters, resulting in a reading rate that plummeted to 55 percent this winter. It has since returned to 97.5 percent, PSEG said.

Bill automatically increased

Complicating the Puccios' problem was the fact that they were on balanced billing, a program that attempts to smooth spikes in bills over 12 months.

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The incorrect reading and estimate led the billing system to automatically increase their monthly charges for the rest of the year to compensate for the false February bill of $2,597.05.

Had John Puccio not called PSEG to complain, his balanced billing amount for the rest of the year would have gone to $308 a month, compared with the $64 the utility charged him initially.

"You really don't know if it's the company or the employee who's doing the reading that is the problem," Puccio said. "Nobody actually monitors these people to make sure they are putting in an actual reading."

Daniel Eichhorn, vice president for customer service at PSEG, assured LIPA board members last month that estimated billing problems were isolated.

"We know there's no inherent systematic issues where customers are getting bad estimates," Eichhorn said. "It's more process related, people related and we're putting proper controls and changing processes accordingly."