Hearing Officer Proposes School District Pay Electric Bill

by June Pichel Cook

CRAFTSBURY – Public Utility Commission (PUC) Hearing Officer Michael Tousley concluded that the Craftsbury School District and Hardwick Electric Department (HED) were both at fault for inaccurate electric metering at Craftsbury Academy. 

In his March 31 Proposal for Decision, (PFD) Tousley proposed the district should pay the $141,865.80 that HED has claimed it is owed. He also concluded, however, that HED not be allowed to shut “off power to the Academy solely as a result of nonpayment of the previously unbilled amount.”

Parties to the dispute had until Friday, April 23, to make comments. The comments were to be sent to the PUC, along with Tousley’s Proposal for Decision, for a final determination and order by the PUC. At its April 14 meeting, the school district acquiesced to Tousley’s PFD and voted to pay the $141,865.80 under-billing over nine years without interest.

Attorney Pietro Lynn, on behalf of the school district, had filed comments to Tousley’s findings and had requested oral argument before the PUC. His comments and request are now moot. Lynn could not be reached for comment before press time. HED could not be reached, either.

Although Tousley found in favor of HED, Atty. Eli Emerson, representing HED, disagreed with Tousley’s conclusion regarding disallowing a disconnection and invoking Rule 3.401(B). Emerson stated that a caveat should have been at the beginning of the findings as HED had already agreed not to disconnect pending the investigation. The standard of Rule 3.402(B) is not met once the dispute is resolved, according to Emerson.

He stated in HED’s Comments on Proposal for Decision: “Therefore, the Commission should not ‘advise’ HED not to disconnect the District’s service if they (school district) fail to make payments pursuant to the Repayment Plan.”

In Lynn’s comments on the PFD, (now moot), he argued that denying Craftsbury’s request for relief from the under-billing creates a challenge for the PUC to apply in future cases and “does not promote fairness.”

He argued that Tousley concluded that HED inaccurately metered the electricity from January, 2011, through December, 2019, and underbilled the school district for electricity used at Craftsbury Academy. Craftsbury was ignorant of HED’s underbilling and detrimentally relied on HED’s billing, Lynn argued.

The drop in bills for electricity at the school was expected as extensive renovation was done and efficiency upgrades implemented. The school district had no “baseline or barometer for gauging what its electric bill should be with the new electrical distribution system and efficiency upgrades in place, as the start of Hardwick Electric’s underbilling coincided with the completion of the Academy’s renovation. From an electrical distribution perspective, the Academy was effectively a new building following the renovation,” Lynn wrote.

Lynn further argued that “The PFD does not cite Commission precedent establishing a clear rule for when a drop in a consumer’s electric bill following energy efficiency upgrades is large enough to put the consumer on constructive notice that it is being under-billed.”

He disagreed with Tousley’s findings that the savings were large enough that Craftsbury should have questioned the result. Lynn said the PFD’s recommendation put consumers at a significant disadvantage “without any standard for a consumer, like Craftsbury, to use to determine when it should suspect it is being underbilled.

“There was no rule or decision giving notice to Craftsbury that it was obligated to investigate and confirm the size of the drop in Craftsbury’s electric bills,” Lynn wrote. “While the PFD jumps to the conclusion that the size of the drop here was large enough that ‘Craftsbury should have questions the result,’ there is no rule or standard being applied to reach that conclusion.”

Lynn concluded that Craftsbury did not know it was being under-billed and relied detrimentally on HED’s billing. “Craftsbury paid every bill it received from Hardwick Electric, in full, with the understanding that Hardwick Electric would not, out of the blue, seek an additional $141,856.80 in payment from Craftsbury.”

Tousley’s PFD noted that the Department of Public Service helped HED estimate the faulty meter’s error and estimated underpayment amount.

“The general rule in most jurisdictions,” Tousley wrote, “is that a person who receives goods or services from a regulated utility must pay for them at the tariffed price, no matter what the impact upon the customer may be and no matter how careless the utility may have been in its billing.”

Billing negligence wasn’t an excuse for non-payment for services rendered by a utility. The general rule is based on public policy against discriminatory rates, he added.

“Excusing a customer from paying for electrical service because of a billing error by the utility may be seen as constituting unfair discrimination in rates in favor of that customer,” Tousley wrote.

Craftsbury failed to prove two of the four elements needed to have prevailed in its request for relief from the underbilling. It failed to meet the threshhold that “the customer must be ignorant of the true facts” and failed to prove a detrimental reliance on the under-billing.

Tousley found Craftsbury’s claim it detrimentally relied on HED under-billing when setting its annual budget was not supported by the record.

In his conclusion, Tousley acknowledged HED should bear some consequence of its mistake in failing to correct the faulty meter when it inspected and energized that meter. He concluded that HED should adopt the interest-free, nine-year payment plan the Department of Public Service had encouraged both parties to accept.