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PSC to investigate FirstEnergy meter-reading and billing

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The Public Service Commission of West Virginia said May 31 it will investigate the meter-reading and billing practices of Potomac Edison and Mon Power.

"We have determined that a general investigation should be initiated into the practices and procedures of both Potomac Edison Co. and Monongahela Power Co. as it relates to meter reading, billing and practices involving estimated bills," reads a letter from PSC General Counsel Richard Hitt to elected officials in the companies' service territories.

The investigation into the subsidiaries of Akron, Ohio-based FirstEnergy is prompted by about 70 formal complaint cases and 750 informal requests for assistance related to billing disputes over the past year, Hitt wrote, primarily earlier this year.

"The commission and its staff are very aware of and responsive to the magnitude and nature of public concern," Hitt wrote.

The problems stem from a series of issues connected with several large storms and with FirstEnergy's acquisition of the utilities' former parent, Allegheny Energy in early 2011, according to company spokesman Todd Meyers.

Bills are based on alternate months of actual meter readings and estimates, Meyers said.

During storm response — including, since the acquisition, Hurricane Irene in August 2011, the derecho in June 2012 and superstorm Sandy in October 2012, as well as smaller storms — meter readers may be called off their routes to watch lines that have been reported down until line crews arrive. They return to reading meters on schedule, so the readings that are missed during those periods aren't made up and result in three estimates in a row — which can result in large true-up bills when those meters are read in the fourth month.

In addition, as FirstEnergy began transitioning from Allegheny's system in which meter readers conducted meter maintenance and other functions as well to its own system in which they only read meters, some staff in the Potomac Edison service area switched to other positions, creating a temporary staffing shortage in mid-2012, Meyers said.

And another phase of transition in early 2013 called "renumbering," in which routes were adjusted, also resulted in a one-time long billing cycle, he said — which, again, created problems primarily in the eastern panhandle.

"The company has not been reading meters (bi-monthly) as they are supposed to according to their tariff at the PSC," said Keryn Newman with the Coalition for Reliable Power. The coalition co-hosted a May 22 public hearing on the issue in Charles Town that she said drew more than 100 ratepayers, 26 of whom spoke before county commissioners, state legislators and a representative of U.S. Sen. Joe Manchin's office.

People who attended the hearing told stories of being billed hundreds and thousands of dollars more than they expected, Newman said. In some cases it was electricity the customers said they used, but for which successive low estimated meter readings made the true-up unusually burdensome; in others, customers said the estimate did not match the meter, but, she said they asserted, the company would not make adjustments.

Newman, who is an avid electricity industry observer and who blogs at www.stoppathwv.com, relates the West Virginia PSC investigation to a case opened in April by the Maryland Public Service Commission to look into Potomac Edison meter-reading and billing practices there.

She referenced a Potomac Edison filing in that case for an explanation for the decreased frequency of meter reading.

"… in Potomac Edison's last rate case in 1994, the expense filed for meter reading was just under $1.3 million (per year)," the company wrote. More recently, as set out in a footnote, "… the company was spending $2.0 million on meter reading."

Newman suggested that the company postpones filing for new base rates in both states to cover its meter-reading costs because it doesn't want to risk reductions in the favorable returns on equity built into current base rates: 11.9 percent in Maryland and 10.5 percent in West Virginia.

"I know that that assertion is incorrect," Meyers said.

He said messages about the meter-reading adjustments were included in customer bills in January, February and March. In April, the company called more than 50,000 customers affected by the longer billing cycle, and also communicated with the media asking customers with billing questions to call the customer contact center at 800-686-0011.

Calls to the contact center are down from the peak in March and April, he said.

Newman hopes the PSC will require the companies to file a base rate case and, if money was collected toward meter reading and unspent, will cause that money to be refunded to customers.

"It's a great thing and it's timely and it's been needed for a while," she said of the commission's investigation. "A lot of people are suffering because of this."

The commission intends to issue its order initializing a general investigation next week, Hitt wrote.