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Complaints lead PSEG to change its balanced-billing system

PSEG Long Island is making changes to its

PSEG Long Island is making changes to its balanced-billing system to address complaints. This PSEG Long Island truck was in Hicksville on Jan. 1, 2013. Credit: Newsday / J. Conrad Williams Jr.

PSEG Long Island is making changes to its balanced-billing system to address complaints that a program intended to stabilize bills has required frequent adjustments.

The changes, which will be in place starting in December, are aimed at minimizing the number of times the program readjusts during the year because of changes in power costs and customer usage.

"We took a fresh look at a program that has been there [since the 1980s] and hasn't been touched in a long time," said Fred Daum, director of customer contact and billing at PSEG. Further improvements are being worked on, he said.

For the 480,000 customers on the balanced-billing program, reducing bill volatility is a priority. The program divides a customer's estimated yearly usage into 12 equal payments (or six for those on bimonthly billing). Ideally, it is reconciled once at the end of a billing year -- except when there are extraordinary new charges or higher usage that vary too widely from the original estimate.

After LIPA two years ago moved to monthly power supply adjustments, nearly half its balanced-billing customers experienced three adjustments annually compared with one to 1.5 times before that time, PSEG said. PSEG operates the electric system under contract to LIPA.

Those changes were especially irksome last winter, when energy prices climbed and fell with volatile natural gas prices. Most PSEG customers saw their balanced-billing amounts increase, along with the number of billing adjustments.

One customer said he got so frustrated with the balanced-billing program last spring that he opted out and wasn't coming back anytime soon.

"My issue was, on my very first contact with them, they said my balanced billing was supposed to be $99, and the very next month it jumped $20 out of nowhere," said Dominick Speziale of Hewlett. "I'll never go on that again."

The new changes are aimed at raising the amount that triggers a bill adjustment.

Each time a customer meter is read (usually every 60 days), the balanced billing program reviews the new usage data and the new power supply charge to calculate a new estimated cost for the rest of the year.

If the difference between the new projected yearly cost and the old estimate creates a difference of 10 percent in the monthly payment for the months remaining, the balance bill is subject to adjustment.

Under the old calculation, if the monthly difference between the old and the new payment amount was greater than $3, PSEG would adjust the billing. Under the new method, PSEG is increasing that threshold to $25.

Daum emphasized the change won't be the last to the balanced-billing program, but was an important interim fix to address customer concerns.

"We will continue to look at ways to improve it," Daum said.

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