KALAMAZOO, Mich. (WOOD) — Renee Ridley’s power was shut off twice because she couldn’t pay a nearly $3,000 gas bill that reached back 19 months. Her troubles were the after effects of poor billing practices for which Consumers Energy was slammed months earlier.
According to the Michigan Public Service Commission, Consumers was estimating customers’ bills too often and sending them estimated bills that were often too low. Then, when Consumers got updated figures, it issued new invoices that asked resident to pay for power they had used months ago — the company calls them “catch up” bills.
Renee Ridley had no idea how she would catch up.
“I can’t afford it,” she told Target 8 investigators last month. “I live off Social Security. How was I supposed to eat, drink or do anything else?”
The Michigan Public Service Commission found that last year, Consumers estimated 49,000 customer bills for three months or more and 13,000 for a year or longer. In June, the state told Consumers to shape up and hit the company with a $515,800 fine.
Consumers says that since then, it has whittled the estimated bills down to fewer than 1 percent. The MPSC says Consumers is meeting all the demands for improvement.
Target 8 investigators found that MPSC staff had known for years — as early as 2008 — about the large number of estimated bills. So why did it take so long to take action?
“The Commission staff did have meetings during the entire time with the utility to address the issue, but it had reached the point where we hadn’t seen any real improvement,” spokesperson Judy Palnau explained to Target 8.
Consumers says there are a lot of reasons for estimating bills. In Renee Ridley’s case, it was because her meter was not outside her Kalamazoo house where readers could see it. It was in her basement, so somebody had to be home to let meter readers in every month and that didn’t work out well.
But if it was causing problems, why didn’t Consumers move meters outdoors? Spokesman Roger Morgenstern said the company has “worked on this over a number of years. We’ve actually had a meter move out program across the state.”
Now, the company is installing smart meters. That’s likely to solve the excessive estimating of customer bills because the new meters read electric and gas usage and report it automatically — no human reader needed.
It’s also why Ridley suddenly had to pay a big bill. When the company installed the smart meter, it read and reported actual gas used over the past 19 months when no one was reading the meter. It turned out the usage was more than the company had initially estimated, and it wanted her to pay up.
After Target 8 investigators started asking questions, Consumers got Ridley into a program that helps people pay their utility bills. It’s a program Michigan residents pay for with a small portion of their monthly payments.
Consumers warned that places in that program are limited.
Target 8 investigators wondered if any of that $515,800 fine went to help the customers stuck with difficult catch up bills?
“No,” said the MPSC’s Palnau. “The law is very specific with regard to that fine that it had to be put into a certain fund used to regulate utilities.”
Essentially, the money went to fatten the state budget.
Should the law be changed?
“That’s something I have not heard anybody bring up, but that could be something that will be addressed in the future,” Palnau said.