After a yearlong investigation, the Maine Public Utilities Commission staff reported Thursday that it found no systemic problem with Central Maine Power Co.’s metering and billing systems that would have caused erroneous high energy use on customers’ bills.

Instead, the staff agreed with earlier assessments and CMP’s own analysis that the significant bill increases many customers experienced during the winter of 2017–18 resulted from greater use during a record-breaking cold snap, as well as a double-digit increase in the standard-offer supply price in January 2018.

Still, the PUC staff found CMP mismanaged the rollout of a new billing system, known as “SmartCare,” resulting in late or inaccurate bills for tens of thousands of customers.

For that reason, the PUC staff recommended that CMP conduct at its own cost additional testing of SmartCare to fix remaining problems, establish an independent process to investigate and resolve customer complaints about high usage that have not been resolved, and submit a comprehensive plan for managing the ongoing maintenance of the SmartCare system.

As a penalty for poor management, the PUC staff recommended imposing the equivalent of a $4.9 million reduction to CMP’s earnings every year until the company meets certain benchmarks for service quality for at least 12 consecutive months.

But the impact of that penalty is complicated and confusing because of recommendations in a separate but parallel case involving CMP’s rates that also were released Thursday.

In that case, the staff is recommending actions that would result in an 8.1 percent increase in energy distribution rates for customers, effective March 1. The extra money would go toward customer service improvements and reliability upgrades to CMP’s power distribution system to reduce storm-related outages.

The bottom line: The proposed rate hike would increase the average residential monthly bill of $86 by 2.45 percent, or roughly $2.11.

Taken together, the proposed rate increase and the downward earnings adjustment for failures in poor management equate to a net rate increase of $20.5 million. That’s less than half of the $44.7 million increase CMP requested.

The PUC staff also confirmed findings of a Maine Sunday Telegram investigation that CMP and its parent company, Avangrid, took shortcuts to speed the launch of SmartCare, following several delays.

“Prior to going live with SmartCare, CMP compressed the schedule for critical testing of the software. Instead of running different types of tests in a serial fashion – one after the other, as they had originally planned – CMP opted to run critical testing in parallel, or concurrently with one another,” the staff wrote. “CMP also contradicted its software integrator in finding that the overall system was essentially ready for go-live, where the software integrator had recently identified critical ongoing, open issues with the software that required attention, and gave the project a red light. Also, close to go-live, CMP relaxed its standards for go-live readiness.”

As part of the rate case, the PUC also examined customer service complaints. It found “serious problems with CMP’s customer service functions, particularly with its call center.” The staff recommended CMP hire an independent third party, at the company’s expense, to monitor and evaluate the call center’s performance.

Those findings and recommendations are contained in the so-called hearing examiner reports. The two separate documents serve to advise the three PUC commissioners as they prepare to decide to what degree Maine’s largest utility is responsible for a flood of customer complaints tied to the 2017 launch of its SmartCare billing system.

The much-anticipated decisions on both the billing case and the rate hike are expected Jan. 30.

The PUC staff recommendations follow a painstaking inquiry into the performance of CMP’s billing and metering systems that began last January.

PUC commissioners aren’t bound by the staff recommendations, but because they represent the conclusions of agency attorneys who have been deeply involved for a year in analyzing the information, the recommendations will carry weight.

The next step is for parties in to the case to file written responses to the recommendations. Then the three commissioners will publicly deliberate on the cases and make their decisions.

CRITICS DENOUNCE REPORT

The staff recommendations were immediately slammed by Rep. Seth Berry, D-Bowdoinham, one of CMP’s harshest critics. Berry is leading an effort in the Legislature to convert CMP and Emera Maine into a public power company.

“Today’s PUC reports are a major disappointment for every CMP customer,” Berry said in a statement. “To give CMP a rate hike of any kind at this time is unconscionable. Until CMP has made each and every customer whole for the inaccurate bills, hours spent on hold, dropped calls and illegal cutoffs, their overseas investors should not make a penny more.”

Berry added: “Until CMP has made reparations for their misleading behavior and outright lies to customers, workers and policymakers, they should not be allowed a penny more. Yet with these reports, PUC staff recommends an increase of over $20 million per year in revenues for CMP, and an 8.1 percent rate hike.”

Maine’s Public Advocate, whose office had also studied the billing complaints, took issue with the conclusions and said he hoped the commissioners would closely review his office’s pending responses.

“For whatever reason,” Barry Hobbins said, “the staff concurred with CMP in not giving much weight to the thousands of complaints. Very disappointing.”

The conclusions also were disappointing to CMP Ratepayers Unite, the 10,000-member, Facebook-based customer group that formed around the issue of high bills. A spokeswoman for the group issued a statement lamenting two years of what she called members’ inflated, unjustified power usage, disconnection notices on disputed bills and rude customer service reps.

“The release of the 12-month investigation of CMP by the Maine PUC is shockingly inconsistent with all complaints and testimony since January 2018,” Judith Hyde said. “CMP Ratepayers Unite continues to see new complaints and complainants every day.”

She said the PUC staff’s response amounted to “a slap on the wrist.”

In a statement late Thursday, CMP said it would review the findings and file its response on Jan. 23.

The company noted that the recommendations reflected the input of a variety of Maine stakeholders, including customers and advocacy groups. CMP said its top priority was reliable service, and fair and reasonable rates.

UNPRECEDENTED PROBE

In the billing report, the PUC staff said the agency’s investigation was “without precedent” in terms of the high number of complaints and public skepticism of utility bills. That triggered a series of investigations that, in one instance, included analyzing 4 million billing records and 2.3 billion data points to trace data from one end of the billing system to another.

In the end, the evidence – including a detailed forensic audit conducted by an independent third party – demonstrates that CMP’s metering and billing systems have been, and continue to be, recording and transmitting customer usage data accurately, the report said. And with the exception of isolated billing calculation and presentation issues, customers’ billed amounts have been accurate, it said.

“The large number of customers who experienced high bills and high usage in late 2017 and early 2018 resulted from increases in electricity usage due to a record-breaking cold snap from December 2017 into January 2018, and a double-digit increase in the standard-offer electricity-supply price in January 2018,” the report says. “While billing defects in SmartCare did, in many cases, lead to incorrect billed amounts or incorrect displays of billed usage, the evidence in the record demonstrates that errors in CMP’s metering and billing systems were not a root cause of the significant bill increases many customers experienced during the winter of 2017-2018.”

The agency did find, however, that some aspects of CMP’s management of the implementation of its SmartCare billing software were “imprudent.” Flaws in the implementation after CMP went live with SmartCare led to defects or exceptions that affected tens of thousands of customers in the form of delayed bills or billing errors.

“Defects in SmartCare that affected customers immediately following go-live – which in many cases led to errors on customers’ bills or significantly delayed bills – were likely a contributing factor to customers’ perception of over-billing,” the report says. “Overall, there is simply no evidence of a metering or billing problem that is leading to erroneously high billed usage.”


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