CMP faces lawsuit which may involve tens of thousands

Public Advocate looking into possible CMP coverup
Posted:  Thursday, July 5, 2018 - 11:00am

A class action lawsuit that could involve tens of thousands of Central Maine Power customers got a boost June 21 when LD 1729 passed as an emergency measure. It needed and got more than two-thirds of the Legislature’s “yea” votes. The bill, which was amended and renamed by the Energy, Utilities and Technology Standing Committee, “An Act To Restore Confidence in Utility Billing Systems,” was sponsored by Sen. Lisa Keim, R - Dixfield. Rep. Tina Riley, D-Jay, amended it with Keim's consent. It passed unanimously, 127-0, with 24 absences.

On July 2, Gov. Paul LePage vetoed the bill. He stated in his veto message, the bill targeted Central Maine Power specifically and unfairly. It would affect any investor-owned utility, including CMP, and Emera, the state's two largest electricity transmission companies. Then on Monday, July 9, the Legislature on Monday overrode the governor’s veto of LD 1729 that lets the Public Utilities Commission put part of an audit’s cost on shareholders of investor-owned utilities, if the audit found “imprudence” by the utility.

The bill became law after the Legislature unanimously voted to override the veto.

CMP had record numbers of customer complaints after installing its new billing system in October. The PUC has received over 97,000 complaints from customers, alleging overbilling.

Despite passing out of committee in April with a divided report along strict partisan lines, with Democrats for and Republicans against, the bill had bipartisan support as an emergency measure in the summer’s special session. Rep. Seth Berry, D - Bowdoinham said that was because between April and June, memos written by various managers at CMP had been leaked to the press, indicating CMP knew of billing and possibly metering issues long before customers, the Public Utilities Commission, and the Public Advocate had identified them.

LD 1729 will let the PUC split an audit's cost between ratepayers and shareholders, if the audit contributes to an imprudence finding that gives ratepayers a break.

The PUC will also determine a method of system accuracy routine auditing, not unlike the Bureau of Weights and Measures performs on gas tanks at filling stations, and will create rules for when and how that auditing will be done by an independent auditor. In addition, it requires the PUC to produce a report on whether the investor-owned utilities are doing enough to protect and strengthen their systems, “especially with what appears to be an increase in high-intensity storm events.”

The class action lawsuit, begun in May by a Facebook User group called CMP Ratepayers Unite, currently has about 3,000 ratepayers who have expressed interest in joining the class, according to members of the page, although more are inquiring every day. Complete details will not be known until interested class members file a response to one of the lawyers involved. Local attorneys Sumner H. Lipman of Lipman & Katz and James Belleau of Trafton, Matzen, Belleau & Frenette retained the New York law firm of Napoli Schkolnik, PLLC to take the lead on behalf of CMP customers.

According to the Public Utilities Commission,  97,000 customers experienced bills at least 50 percent higher than normal from December 2017 through March 2018, just as the investigation in the Legislature and at the PUC got underway.  CMP initially claimed it had found no evidence of any billing or metering issues. The memos demonstrating its knowledge to the contrary were leaked to the Portland Press Herald in May and later delivered to the Public Advocate’s office and the PUC.

In one of the memos, a Jan. 15 email from CMP’s director of electric supply Susan Clary, to customer services head Rachel Grenier and other CMP managers, Clary acknowledged billing errors and warned that the company had to get a handle on the issue or risk being in the middle of a PUC investigation. For at least three months after this email, the company denied any problems with the billing system beyond cosmetic issues such as graphs not appearing correctly on the bills.

By February, CMP was trying to figure out how to increase customer service personnel to deal with the onslaught of calls and complaints. By March, the PUC had opened an investigation, and by April,  the Legislature’s Energy, Utilities, and Technology Committee had scheduled hearings.

On May 4, when he learned of the leaked memos, Public Advocate Barry Hobbins asked the PUC to elevate the inquiry to an adjudicatory investigation, which he said would be the only way he as advocate could intervene with the utility on the consumers’ behalf. He said if the PUC did not act, he might consider taking legal action himself on behalf of ratepayers, referring to the memos as “part of the smoking gun.” Hobbins said he did not receive copies of the memos until they had been published in the paper and he asked the PUC for copies, around the middle of May. “The company had represented to the Legislature that there was no problem, when they were certainly aware of ongoing issues, so now we have to question what CMP knew, and when did they know it?”

Henry Lanphear of the PUC said May 7 that legal action would be premature, but held out the option of the PUC taking legal action after the audit is complete.  In a phone interview, Hobbins said he was disappointed and not happy, and said he intended to maintain his pressure on CMP and did not rule out filing suit on his own.

The passage of LD 1729 gave the Legislature the legal rationale to ask the PUC to act.