How did this happen? The first thought is Covid, right? It screwed everything up, probably utility debt too. But the data doesn’t bear that out. 

The pandemic started in March 2020 and we don’t see a meaningful change in the percentage of households in arrears until September 2021. Central Hudson instituted their shut off moratorium in March 2020 as well, which meant that regardless of how much a home owed the utility, they would not lose service. So it’s not that policy either. Although I’ve heard that explanation from Central Hudson employees. And it makes sense. Without the threat of losing service, more people might skip paying their bills. 

There is a small increase in customers in arrears from March to May but the slight uptick does not explain where we are today. 

The significant increase occurred in September 2021, the same month Central Hudson instituted their new billing system – after thirty years of using a previous system. And the roll out was fraught to say the least. You can read about the Public Service Commission’s investigation into Central Hudson and the botched roll out here. It’s dated 12/15/2022.  

The report details a slew of errors and issues with the new system. It overcharged “over 8,050” residential customers, produced inaccurate bills and estimates, and delayed billing as well. Further, the system automatically withdrew an incredible amount of money from customers’ bank accounts, 

“…several customers whose bills were delayed as the result of system errors, suddenly had money withdrawn from their accounts for multiple months’ worth of bills. Between September 2021 and June 2022, over 30,000 customers who were accustomed to receiving a monthly bill, had multiple months’ worth of charges automatically withdrawn from their bank accounts. During that period, Central Hudson automatically withdrew over sixteen million dollars ($16,000,000) from customers’ bank accounts…” (p. 17).

It seems that the confusion, errors, and delays caused by the billing system’s roll out doubled the percentage of accounts in arrears. For example, someone could have been paying their balance regularly, received two or three months of charges suddenly, and then carried those extra charges forward, slowly paying it down over the course of months and months, thus adding them to the graph above. It’s much easier to get into debt than to get out of it. 

Although Central Hudson has corrected their billing errors and settled with the Public Service Commission, the numbers indicate that customers are still struggling under the weight of the billing errors. 

Central Hudson’s new billing system was instituted in September 2021 and they “… reported that as of September 11, 2022, over 8,000 customers’ bills were still not current” (p.17) in the PSC’s investigation. 

The PSC’s report explains what led to the botched rollout as well. Central Hudson’s budget for developing and implementing the new billing system expanded and expanded and Central Hudson employees in support roles – the people responsible for using the system, answering calls, and troubleshooting errors – were under prepared before the rollout in September 2021. 

“… [T]he planned training curriculum contained zero hours of training for ‘Complex Billing’, zero hours for ‘Net Metering’, and zero hours for ‘Manage Retail Choice Suppliers’. Rather than dedicate training to these complex scenarios, Central Hudson instead chose to hope that employees would pick up proficiency through testing in a manner that was ‘ad hoc’ and ‘not tracked’” (p. 27).

The result of this lack of preparation? Our neighbors are still dealing with the accumulated debt in 2024. 

The situation facing thousands of Central Hudson customers in arrears is an excellent example of why, at MHET, we believe we need a system that prioritizes the wellbeing of the people it serves, not the profits it can make from them. Such a system would deliver a wholly different service. 

The status quo of our current energy system empowers for-profit entities to make sweeping decisions for our region and the same goes for most other regions in New York State. The fallout from Central Hudson’s implementation of a new billing system is exactly the kind of harm that current incentives fail to prevent. And exactly the kind of harm that current residents of the Hudson Valley are forced to shoulder. 

This is why Mid-Hudson Energy Transition champions energy democracy. Our energy system should be owned, controlled, and responsive to local communities. If the local community is unhappy with the quality of service or the cost of their bills there needs to be a way to express that dissatisfaction and meaningfully change the causes of dissatisfaction. In this way, the priority of the energy system would be the wellbeing of community members and not shareholders. 

The people affected by a system should have the final say in its structure and implementation. If we create a system that prioritizes the wellbeing of our neighbors, we will have a system that supports the wellbeing of our neighbors. And if we continue along with the same for profit incentives with the same structure of accountability, we will continue to see our communities suffer for it.