PSEG apologizes for debt-collection furor; LIPA calls for more oversight

PSEG Long Island’s top official issued a public apology Wednesday while LIPA and PSEG launched a series of probes, audits and reforms in response to comments by a former PSEG supervisor detailing aggressive bill-collection practices.

“I personally and the entire PSEG team are in complete agreement that those comments by our former PSEG employee were totally unacceptable,” said PSEG Long Island president and chief operating office Scott Jennings at a Long Island Power Authority board meeting Wednesday. “We own the issue, we’ve taken this very seriously and we apologize for his comments.”

The supervisor’s comments, made at a conference in March in discussing using shutoffs and other aggressive tactics to get customers in arrears to pay up, have already led to a statewide investigation after expressions of outrage by Gov. Kathy Hochul and Public Service Commission Chairman Rory Christian following reports in Newsday.

LIPA Chairwoman Tracey Edwards called the comments “unacceptable and deeply troubling," saying they raise "broader questions regarding collection practices, customer interactions, training, oversight and departmental culture."

She said responsibility for “restoring public trust and driving reform ultimately rests with this board." PSEG Long Island last year was awarded a $493 million, five-year contract renewal by the LIPA board to manage the electric grid.

Edwards read a resolution, unanimously approved by the board, that called for an expanded LIPA review of credit and collection practices to include "protections for seniors, medically vulnerable individuals, and low-income households." It also called for working with peer utilities, customer advocates, union leaders and other stakeholders to review best practices and reforms.

The resolution also committed LIPA to reviewing two years of PSC and customer complaints related to debt collections “to identify patterns, risk and areas where reforms may be needed.”

PSEG has already suspended shutoffs for collections and launched an internal review, Jennings noted, and recently it held a companywide “stand-down meeting” where some employees from the customer group “were in tears" over the comments. 

“It has created a perception that has overshadowed the good work many of many of our employees,” he said. “It goes against the customer-centric culture that we’ve worked hard to build.”

But LIPA trustee Dominick Macchia said the comments of the former supervisor suggested deeper cultural issues.

“Let’s be brutally honest,” he said. “He was your fair-haired boy, he had your highest collections and if you don’t think he shared that with his group, I think you are mistaken. It wasn’t a one-off. It was cultural.”

Macchia stressed he was not applying that view “to everyone" at PSEG "because it’s not fair to paint everybody with the same brush that way. But say it the way it is. … It was a cultural thing in my opinion.”

While PSEG has suspended shutoffs for nonpayment during its review, the company has not stopped collections by outside agencies, spokeswoman Katy Tatzel said Wednesday in a response to Newsday questions.

She declined to say how many third-party collections firms PSEG uses or whether PSEG was continuing to offer an incentive program described in a Newsday story that rewarded the most successful collections firms with more customer accounts.

At the LIPA board meeting, PSEG managers detailed a series of programs to help customers lower or defer payments, and avoid arrears and shutoffs. They recounted several case studies of helping customers in need defray or eliminate arrears through utility or government programs.

“Termination of service is only pursued when all alternatives have been explored and exhausted," said Lou DeBrino, vice president of customer operations. 

But Kristen McManus, New York director of government affairs for senior advocacy group AARP, noted that if she’d brought along every member who voiced concern about energy affordability, “we’d have to move this meeting to Nassau Coliseum.”

“To think that somebody who is being terminated would have received a threatening phone call from a PSEG representative that said, ‘Grandma, I'm coming for you,’ is unconscionable,” McManus said. “We know that people are struggling to pay their utility bills now more than ever before. And this is a time of incredible stress for a family. It is not an opportunity to ‘think better in the dark,’ ” as the former supervisor suggested.

Monique Fitzgerald, climate justice and campaigns organizer for activist group Long Island Progressive Coalition, said she believed the problem was systemic and the “consequence of the corporate greed.” She called on PSEG to institute more programs to prevent shutoffs, including those that mirror the full breadth of programs available at other utilities across the state.

She pointed to the thousands of customers who have faced shutoffs on Long Island and the Rockaways in just the past five months, including 3,542 in April alone. “We have to do better,” Fitzgerald said. “We have to be there for the folks that are being shut off so that they don’t get shut off.”

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.