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National Grid to issue refunds to thousands of commercial customers

Commercial gas meters operated by National Grid, like

Commercial gas meters operated by National Grid, like these in Riverhead on Monday, Nov. 2, 2015, were involved in billing thousands of business customers at the incorrect rate. The company will pay refunds. Photo Credit: Newsday / Mark Harrington

Thousands of National Grid commercial gas customers on Long Island will receive refunds averaging $916 after the utility was found to have charged them for natural gas delivery at the incorrect rate.

In all, National Grid must return some $3.3 million to the 3,600 nonresidential gas customers who overpaid starting in 2008 and continuing until recently, according to the Public Service Commission, which reviewed and approved the payouts.

Newsday in July first reported on the error, which came to light when a father-son team of Long Island utility consultants were reviewing bills for their clients.

Vincent DiCeglio of Utility Check and his son Douglas DiCeglio of Utility Rate Analysis Consultants first discovered that National Grid in 2008 began using weather-adjusted customer usage data to determine rate classifications.

The data removes spikes and lulls from a particular year's weather to moderate the impact. The effect was to put thousands of commercial customers into the wrong rate class, the state confirmed after the complaints.

In a statement Monday, PSC chairwoman Audrey Zibelman said the agency found that "thousands of Long Island businesses have been misclassified as heating customers, resulting in higher rates for their natural gas service. We are directing KeySpan Gas East [National Grid] to pay these refunds, with interest, with each business receiving, on average, $916."

The PSC said it reviewed more than 57,000 billing records on Long Island and that about 6 percent of customers, including restaurants and retail businesses, were overcharged.

The PSC said it continues to review bills paid by 50,000 commercial customers of Brooklyn Union Gas, the National Grid subsidiary that serves 1.21 million residential and nonresidential customers in Brooklyn, Queens and Staten Island.

"Because these overcharges can be difficult to recognize, the Public Service Commission is examining the bills paid by thousands of other commercial customers," Zibelman said.

National Grid's agreement to pay refunds follows a yearslong period in which it fought the case. The company requested as recently as last year that the state reject refunds altogether because they were "not appropriate in this case," according to state records. The PSC initially found for the company, but the consultants prevailed on appeal.

"Basically the PSC, when it comes to consumers' complaints, sides with the utility until the overwhelming evidence proves otherwise," Douglas DiCeglio said. "Had it not been for me and my father, there would be no refunds."

Zibelman in her statement said, "We listened to the complaints filed with our Consumer Services Unit and we are pleased the utility will be returning more than $3 million to businesses on Long Island."

National Grid spokeswoman Wendy Ladd said customers will be receiving notices about the refunds in coming weeks. The refunds will range from "a few dollars to a few thousand" dollars, she said.

After discussions with the PSC, she said, National Grid "is now ready to proceed with issuing these refunds."

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