BETHLEHEM, Pa. — The state Public Utility Commission on Thursday narrowly voted to penalize PPL for billing issues that plagued area customers more than a year ago.
But the board also decided that a $1 million civil penalty against PPL should go to the utility's hardship fund, to help low-income people pay their bills.
The commission voted 3-2 to adopt a proposed opinion from an informal investigation of the systemwide billing issues. That probe led to a settlement between the PUC’s Bureau of Investigation and Enforcement and the PPL Electric Utilities Corporation.
Changes were implemented in the measure based on "extensive consumer feedback," the PUC said.
But the PUC has put the impetus on PPL to thoroughly investigate exactly how the billing issues happened, and to implement measures to prevent, or at least mitigate, similar circumstances in the future.
Customer impact
According to statistics cited in the petition, 48,168 PPL accounts did not receive bills during one or more billing periods between December 2022 and April 2023.
Also, 91,676 unique accounts received no bills during the same time frame, and of the 860,493 estimated bills issued from December 2022 through May 2023, “many of these bills were unusually high or low or contained missing or incomplete supplier charges.”
PPL analysis of 387,895 bills that were estimated in January 2023 found that 67.31% had an estimate 10% or more than the customers actual usage.
Of that 67.31%, 34.36% were shown to have an estimate that varied from actual usage by more than 25% of usage and 47,904 by more than 50%.
Had the billing issues been fully litigated, evidence and legal arguments would have demonstrated that “PPL committed violations of the code, and the commission's regulations related to customer billing" because of PPL’s meter data management software, or MDMs, failed.PUC Chairman Stephen M. DeFrank
Furthermore, 82,784 customer bills lacked any supplier charges, or, at most, included only partial charges, leading to “severely inaccurate bills,” PUC Chairman Stephen M. DeFrank said.
Had the billing issues been fully litigated, evidence and legal arguments would have demonstrated that “PPL committed violations of the code, and the commission's regulations related to customer billing" because of PPL’s meter data management software, or MDMs, failed, DeFrank said.
The PUC acknowledged PPL took some action, including reaching out to customers impacted by the issues and instituting or pursuing practices and protocols to help prevent and insulate technical issues caused by billing errors.
It also did not terminate electric service for any customers for nonpayment from January 2023 through June 2023, waived late payments from January and February 2023 and didn't try to collect $1.7 million from underbilled customers.
It also refunded about $1 million to customers through a credit and promising not to try to recover from rate payers the $16.2 million cost it incurred to address the billing issues.
Changes to the settlement
The original settlement called for PPL to pay a civil penalty of $1 million, and the PUC called for additional changes.
“We find it prudent to revise the terms," DeFrank said. "We find such revisions are necessary to sufficiently address the harm to the public and to provide impacted customers with adequate remedies.
Those changes include demanding PPL provide the PUC with a timeline to implement the settlement provisions and to file quarterly progress reports.
“PPL will not recover the cost of the billing system malfunction from any ratepayers [and] PPL will share its methodology in calculating the $1 million in refunds and provide details on how refunds were distributed."PUC Chairman Stephen M. DeFrank
Also, ensuring PPL will commit to being open and transparent with the PUC and other organizations regarding fixing billing issues.
It also calls for PPL to provide a root cause analysis report to PUC within 120 days, with details on how customer balances and terminations were impacted.
“If PPL finds through this analysis that any of its customers were not properly issued a refund or provided with other necessary relief due to the termination moratorium, PPL should issue those customers a refund or provide other relief as appropriate,” DeFrank said.
“PPL will not recover the cost of the billing system malfunction from any ratepayers [and] PPL will share its methodology in calculating the $1 million in refunds and provide details on how refunds were distributed."
One standout adjustment to the proposal involved reallocating a tentative $1 million penalty for PPL to their hardship fund — which helps low-income customers pay their bills.
Commissioner Kathryn L. Zerfus commended that move, as it nearly doubled the amount in the fund.
Zerfus was adamant in demanding action as soon as possible because of the lengthy nature of the investigation.
"There was a nearly yearlong investigation, and I don't want to delay any more in providing these remedies, protections, assurances, and dollars to impacted customers,” Zerfus said.
“I want assurances that this isn't going to happen again now. I want improved policies, procedures and protocols in place now.
"I want protections on rate recovery now. I want assurances in place now that if a customer is later found to be eligible for relief, that this customer will be made whole."
Not all back settlement
But when it came to redirecting the civil penalty to PPL's hardship fund, not all commissioners agreed with the decision.
PUC Commissioner John F. Coleman, Jr. , who voted against the joint motion, was concerned about the prospect of the entire penalty to go to the hardship fund.
“They're used for PPL customers that are struggling to pay bills, and the funds go to that customer and then back to PPL. So effectively, the funds stay within PPL, and I don't think that that's appropriate for this matter, as has been articulated by my colleagues.PUC Commissioner John F. Coleman Jr.
“They're used for PPL customers that are struggling to pay bills, and the funds go to that customer and then back to PPL," Coleman said.
"So effectively, the funds stay within PPL, and I don't think that that's appropriate for this matter, as has been articulated by my colleagues.
“I also believe that it would be more prudent to return the proposal, the proposed settlement, to our Bureau of Investigation and Enforcement or other actions that are deemed necessary rather than trying to articulate those here this morning.”
PUC Vice Chairwoman Kimberly M. Barrow voted against the revised proposal.
She said it was a “large improvement” over the original document, but also said she had qualms about the lack of information set to appear in PPL’s reports.
“My issue is that all of that information should be reviewed by the commission," Barrow said. "If not by the commission, by the parties to the settlement, prior to making a final determination on whether a settlement is in the public interest.
“Without that information that's been requested in the motion, I’m not sure how any of us can say that we have sufficient facts to render an appropriate decision to figure out ... an appropriate civil penalty or fine.
"And whether — and this is more important to me than actually the civil penalty or the fine or the contribution — enough remedial actions have been taken to prevent this from happening in the future.”
DeFrank responded that “getting hit with additional uncollectibles on the back end, I wanted to try to minimize that as much as possible. So that's why we made that decision.”
Also Thursday, PUC reviewed a formal complaint from Susan Lloyd against PPL. The complaint, filed June 13, 2023, alleged overbilling and incorrect charges on Lloyd’s January 2023 bill.
Barrow said the case was among 166 filed regarding billing issues with PPL, and expressed hopes PPL would look into the matter.
“I simply want to ask that PPL review this case as well as any of those other 100-plus cases that work their way through our process to see if there's any additional relief that may stem from whatever resolution comes out of the larger complaint," Barrow said.
