Purpose

To determine whether the Public Service Commission consistently applies State laws, rules, and regulations to ensure utility consumer protections are enforced, including applying monetary penalties and other sanctions against utility companies. The audit covered the period January 1, 2012 through August 19, 2016.

Background

The Public Service Commission (Commission) regulates almost 2,000 electric, gas, steam, telecommunications, and water utilities, which collected an estimated $36 billion in revenue in fiscal year 2015-16. Pursuant to Public Service Law (Law) Sections 65 and 66, the Commission has the authority to set rates for, and ensure that safe and adequate service is provided by, New York’s utilities. In addition, the Commission oversees the siting of major utility infrastructure, ensures the safety of natural gas and liquid petroleum pipelines, and provides oversight on the cable industry and telecommunications service. The Department of Public Service (Department) is the operating agency for the Commission. The primary mission of the Department is to ensure affordable, safe, secure, and reliable access to electric, gas, steam, telecommunications, and water services for New York’s residential and business consumers, while protecting the natural environment. To aid the Department in accomplishing these goals, the Commission has developed policies and procedures for recording and addressing consumer complaints.

Within the Department, the Office of Consumer Services (OCS) monitors the number and types of complaints received against all utilities operating in the State. OCS’s purpose is to ensure that utilities fulfill their obligation to provide effective customer service in compliance with the laws, rules, regulations, and policies that the Commission is charged with enforcing. Under Title 16, Part 12 of the New York Codes, Rules and Regulations, consumers who feel they have not obtained a satisfactory resolution of a complaint with a utility regulated by the Commission may file a complaint with the Commission. OCS utilizes a complaint database to record and monitor complaints received. During our audit period, OCS entered 108,405 complaints and inquiries into the database. Of the 108,405 entries, 80,717 (74 percent) pertained to natural gas and electric services. The most common reasons for the complaints and inquiries were: potential termination of service, service outages, questionable marketing practices, billing issues, and items related to life support equipment.

Key Findings

• The Department consistently applies State laws, rules, and regulations to enforce utility consumer protections related to consumer complaints.
• The Department could improve its monitoring efforts by tracking and documenting broader complaints about more global issues, such as inadequate infrastructure or poor service reliability throughout a particular area, that impact more than just individual consumers. Currently, these issues are directed to individual Department units with little or no documented follow-up to ensure broader issues are addressed.
• The Commission generally does not fine utilities to ensure compliance with regulations. Rather, the Department prefers to work with the utilities to achieve compliance, such as by requiring performance plans that can be used to evaluate a utility’s performance.

Key Recommendations

• Develop a process to track global complaints that ensures accountability for Department staff and documents the efforts undertaken to address consumer issues.
• Periodically evaluate the effectiveness of the performance plans in ensuring safe and reliable service for utility consumers.

Other Related Audit/Report of Interest

Public Service Commission: Pipeline Safety Oversight (2015-S-31)