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Comptroller criticizes PSC/DPS for failure to monitor utility compliance

John Rhodes, president and CEO of the New

John Rhodes, president and CEO of the New York State Energy Research and Development Authority, took issue with the report criticizing his agency's compliance. Credit: Newsday/Steve Pfost

The state Department of Public Service has failed to properly monitor conditions it demands of utilities that are subject to Public Service Commission orders, sometimes lacking even the equipment needed to properly oversee compliance, a newly released audit by the state comptroller’s office found.

The 41-page report released Tuesday also found that PSC orders were “at times ambiguous” and lacking in short-term performance measures and consequences for noncompliance, “making enforcement difficult and inconsistent.”  DPS is the administrative arm of the PSC.

The top PSC official, chairman John Rhodes, took issue with most of the findings in a letter filed with the report, saying the agency has “vigorously exercised its investigatory and enforcement powers.”

The report examined a series of mergers, including the Altice acquisition of Cablevision, in finding that conditions that came with PSC approval were not always monitored or complied with.

For instance, Altice was required to increase broadband network speeds by the end of 2017, the report found, but DPS “was unable to verify these system upgrades because … it lacks the equipment necessary to perform network speed testing.” (The department has since bought the equipment needed to do the testing, the report noted.)

The department, “rather than imposing penalties, prefers to work with utilities on compliance, creating little incentive for utilities to meet all order conditions,” the audit found.

The PSC and DPS regulate 650 utilities operating across the state, including Altice, New York American Water, National Grid and, on a special “review and recommend” basis, LIPA and PSEG Long Island.

The comptroller’s audit found that some utilities covered by DPS orders have submitted inaccurate data that DPS is using “without verification, to calculate electric reliability, gas safety and utility service quality,” the report says. The inaccurate data, while not used to set rates, “is sometimes used for determining fines and for general decisions made by the department” and the PSC to monitor utilities.

In his response Rhodes disagreed with elements of the report, noting there was “no legal or policy reason to include potential consequences in each and every order issued by the commission.”

He also took issue with the statement that DPS prefers to work with utilities rather than imposing penalties, noting it uses penalty actions “in a strategic manner to address violations.”

As for whether utilities are submitting inaccurate data to calculate reliability, safety and service quality, Rhodes noted the data provided by companies was for “informational purposes only” and not relied upon to make “any decisions that could affect the utilities or the state’s ratepayers.”

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