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Cen Hud PSC Agree Monitor
Cen Hud PSC Agree Monitor
Matter 22-M-0645: Proceeding on Motion of the Commission Concerning Central Hudson Gas
& Electric Corporation’s Development and Deployment of Modifications to its Customer
Information and Billing System and Resulting Impacts on Billing Accuracy, Timeliness, and
Errors.
INTERIM AGREEMENT
WHEREAS, this Interim Agreement (“Interim Agreement”) is by and between the New
York State Department of Public Service (“DPS” or “DPS Staff”) and Central Hudson Gas &
Electric Corporation (“Central Hudson” or the “Company”) (each individually a “Signatory Party”
and, collectively, the “Signatory Parties”);
WHEREAS, this Interim Agreement relates to but does not resolve allegations arising
from the Company’s development and deployment of the SAP System contained in the Order to
Show Cause (“Order to Show Cause”) filed in Case 22-M-0645 and the report filed in the same
case by the DPS Office of Investigations and Enforcement (“OIE”), issued on December 15, 2022;
WHEREAS, the OIE and other DPS Staff have continued to investigate allegations related
to the Company’s SAP System through Case 22-M-0645;
WHEREAS, the Company has demonstrated efforts to rectify billing and other impacts
resulting from the deployment of the SAP System;
WHEREAS, the Company has invested time and funds in an effort to improve stability of
the SAP System;
WHEREAS, the Company seeks to demonstrate billing system accuracy, stability, and
timeliness;
WHEREAS, Central Hudson contends that the Dashboard shows that billing performance
associated with the SAP System has shown recent improvements, and the Signatory Parties agree
that Central Hudson customers, DPS Staff, and Central Hudson would benefit from the assurances
of an expert, independent third-party examination of the Company’s customer information and billing
system data utilized by the Dashboard;
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WHEREAS, a March 2023 Public Service Commission-directed audit recommended,
among other things, that Central Hudson transition to reading customer meters on a monthly basis;
WHEREAS, the Signatory Parties agree that every month meter reads would provide
significant benefits to customers and would provide greater confidence in Company billing practices;
1. The Company shall continue to thoroughly investigate all complaints of billing errors
and shall continue to promptly refund overpayments to any and all customers who have
been overcharged as defined by the Public Service Law, 16 New York Codes, Rules and
Regulations parts 11 and 13, and Central Hudson’s tariffs.
2. The Company agrees to targeted testing and verification of the SAP system, with the
objective of confirming the accuracy of current and prospective billing associated with
the SAP System, under a DPS Staff-selected independent third-party monitor, which will
include the following:
a. The Company agrees to the engagement and scope of an independent monitor as
set forth in Attachment A hereto.
b. Said oversight monitor shall have access to Company information, data, and staff
commensurate with that of DPS Staff.
c. Said oversight monitor shall issue a final report containing findings and
recommendations within the time frame specified in Attachment A.
d. The Company, and not ratepayers, will bear the cost of the third-party monitor up
to an amount not exceeding $750,000, unless additional expenditures are deemed
reasonably necessary by DPS.
e. The Company agrees to implement monthly meter-reading consistent with the
Updated Meter Reading Plan (included in Attachment B hereto). To the extent
practicable, and in consultation with DPS Staff and the third-party oversight
monitors described herein and in Attachment A, the Company will adhere to the
timeline described in the Updated Meter Reading Plan.
3. The Company shall continue to monitor system defects and shall file a monthly written
report to DPS reflecting any change in the current downward trends in defects and billing
exceptions including the:
a. Number of new defects,
b. Number of defects resolved, and
c. Number of billing exceptions documented (BPEMs).
4. The Company shall continue to monitor customer service metrics as part of the
Dashboard, which it shall file monthly with DPS reflecting any change in currently
observed improvements including the:
a. Percentage of current bills,
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b. Percentage of bills requiring adjustments,
c. Percentage of actual bills replaced with estimates,
d. Call service levels, and
e. Average wait-times and percentage of calls abandoned.
5. The Company shall continue its Customer Experience Training Enhancement Initiatives,
which commenced in January 2023 and shall provide quarterly written updates to Staff
related to program development and proficiency measures.
6. The monthly written reports referred to herein shall be signed and verified by a senior
officer or counsel for the Company.
7. Release From Actions:
a. Resolution of Settled Matters: This Interim Agreement does not finally resolve
issues, concerns, claims, and actions raised and/or asserted, or that could properly
have been raised and/or asserted by either Signatory Party, in connection with or as a
result of SAP System Modifications or other issues included in the December 2022
OIE report or Order to Show Cause.
b. Voluntary Interim Agreement: This Interim Agreement has been entered into
voluntarily by the Signatory Parties.
8. Governing Law
This Interim Agreement and the rights and obligations of the Parties shall be governed by
and construed in accordance with the laws of the State of New York without regard to the
principles of conflicts of laws thereof.
9. Authorization
The execution, delivery, and performance of this Interim Agreement by each Signatory
Party hereto is within its corporate or statutory powers, as appropriate, has been duly authorized
by all necessary corporate or statutory action, and does not and will not: (i) require any governing
or governmental consent or approval except as required in Paragraph 10 below, (ii) contravene its
organizational documents or enabling legislation, or (iii) violate applicable law.
This Interim Settlement is subject to ratification or approval by the New York State
Public Service Commission and will have no effect in the absence thereof. If the Commission
does not approve this Interim Agreement in its entirety, without modification, Central Hudson
may withdraw its acceptance by serving written notice on the Commission and shall be free to
pursue its position without prejudice or consequence in Case 22-M-0645 or any other case or
matter before the Commission. If the Commission approves this Interim Agreement or modifies
it in a manner acceptable to Central Hudson, the Signatory Parties intend that this Interim
Agreement thereafter be implemented in accordance with its terms.
11. Counterparts
This Interim Agreement is being executed in counterpart originals and will be binding on
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each Signatory Party when the counterparts have been executed.
Engagement and Scope of Independent Monitor Regarding SAP Billing System and Integration
of Monthly Meter Reads
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Attachment A
(Unless otherwise indicated, defined terms in this Attachment A shall have the meaning ascribed
to them in the Interim Settlement Agreement)
1. Independent Monitor – Subject to consultation and agreement with DPS Staff, Central
Hudson Gas & Electric Corporation (“Central Hudson” or the “Company”) agrees to
related to the Company’s SAP System and Updated Meter-Reading Plan, as defined in
2. Qualifications – The Independent Monitor shall possess the appropriate expertise and
qualifications including, but not limited to, (1) expertise and direct experience with
relevant computer codes and platforms (including, but not limited to, SAP products),
to electric and utility company billing practices, and (2) appropriate professional licenses,
certifications, and/or other accreditations that are current, active, and in good standing
3. Scope of Work and Review – Central Hudson agrees that the Independent Monitor’s
scope of work and review related to the Company’s SAP System and Updated Meter-
i. Review and verify the accuracy of Central Hudson’s SAP System. As part of
this review, the Independent Monitor shall review and verify if the SAP
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System properly, accurately, and timely issues bills for energy usage by
ii. Review and evaluate Central Hudson’s proposal to initiate monthly meter
reading and transmit bills based on such monthly meter reading to Central
Hudson’s customers. This review shall include, but not be limited to,
alternate month bill estimates would impact the SAP System and its
operability. The review shall also include and take account of the
market penetration.
4. Company Cooperation – Central Hudson shall cooperate fully with the Independent
Monitor and with all reasonable requests within the scope of the Interim Agreement,
Monitor, and permitting, facilitating, and requiring relevant Central Hudson employees
and agents to supply such written or oral information and documents as may be
set forth herein or as may be agreed to by the Signatory Parties. Central Hudson shall
instruct all its officers, employees, contractors, and agents (including, without limitation,
its information technology staff, technology staff, and implementation consultants (to the
extent within Central Hudson’s authority, if any)) to cooperate with the Independent
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Monitor and that a duty of candor applies to all communications any such person may
Hudson shall also make available to the Independent Monitor, subject to the scope of the
materials, and code adjustments related to the Company’s SAP billing system. In
addition, Central Hudson shall make available to the Independent Monitor all information
a. Central Hudson shall provide the Independent Monitor with desk and office space
b. Central Hudson will provide the Independent Monitor with reasonable access to
in order to complete the scope of work set out herein and in the Interim
Agreement. Central Hudson agrees that it will provide the Independent Monitor
with reasonable access to the Company’s books and records necessary to carry out
5. Term – Central Hudson agrees that the Independent Monitor’s engagement shall extend
6. Cost – The costs incurred for the Independent Monitor will be conducted at Central
Hudson shareholder’s expense, which amount shall not exceed $750,000, unless
7. Report – The Independent Monitor will prepare and deliver a written report describing
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a. The Independent Monitor shall complete the written report on or before February
29, 2024.
b. The Independent Monitor will report the results of the review simultaneously and
directly to Central Hudson’s Senior Management and General Counsel and to the
Accounting, Audits and Finance (“OAAF”) and the Office of Investigation and
Enforcement (“OIE”).
c. As it performs the scope of work and prepares its written report, the Independent
Monitor will provide regular updates to, and communicate with, OAAF, OIE, and
d. The Independent Monitor will meet with Senior Management of Central Hudson,
OAAF, and OIE to review the Independent Monitor’s Report; and Central
Hudson, OAAF, and OIE shall have 14 calendar days within which to provide
Central Hudson, OAAF, or OIE believes that any recommendation in the Report
8. Regulatory Compliance – Central Hudson agrees that separate and apart from the
Independent Monitor’s efforts to complete the scope of work and prepare and submit the
Independent Monitor’s Report, if the Independent Monitor obtains any evidence that
reasonably reflects a violation of any provision of the Public Service Law, PSC regulations,
or PSC orders, the Independent Monitor shall promptly notify Central Hudson’s Senior
Management in writing and Central Hudson’s Senior Management shall promptly provide
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that notification to OAAF/OIE in writing of the evidence of what the Independent Monitor
believes to reflect a violation of the Public Service Law, PSC regulations, or PSC orders.
Central Hudson shall provide to OAAF and OIE a written response to the Independent
Monitor within 5 days including its plans to address the Independent Monitor’s concern.
signed and executed by the Independent Monitor, Central Hudson, and DPS Staff.
10. Absence of Overlapping Contracts with Independent Monitor – Central Hudson agrees
that, unless it receives permission, it will ensure that for the duration of the Monitor Review
and Report Period, any firm with which the Independent Monitor is affiliated or of which it is
a member, and any person engaged to assist the Independent Monitor in performance of its
duties under this Attachment A and the Interim Agreement ,incorporated herein by reference,
shall not enter into any other employment, consultant, attorney-client, auditing or other
professional or financial relationship with Central Hudson, or any of its directors, officers,
11. Confidential Information – Central Hudson may request that the Independent Monitor shall
enter into and agree to be bound by a confidentiality agreement to protect any specific
or other confidential information consistent with NYSDPS practice, and the Independent
Monitor shall not unreasonably decline to enter into such a confidentiality agreement.
12. Resignation or Termination – Central Hudson cannot terminate the Independent Monitor’s
engagement at any time prior to the expiration of the Monitor Review and Report Period
without cause, but the Independent Monitor may resign at any time, provided that the
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Independent Monitor gives Central Hudson and the Director of DPS/OAAF at least 30 days’
advance notice of its resignation and, before the effective date of such resignation, prepares
and submits a report to Central Hudson and the Director of DPS OAAF. If the Independent
Monitor resigns it shall immediately cease work except that it may complete the Report to
the extent it has sufficient information to do so. If the Independent Monitor is terminated for
cause by Central Hudson, the Company shall, within five days, submit to DPS a written
report documenting the cause(s) of the termination. Central Hudson agrees that if the
Independent Monitor resigns, is unable to serve the balance of the Monitor Review and
Report Period, or is terminated for cause, a successor shall be chosen promptly by Central
Hudson, with the review and approval of the Director of DPS/OAAF to the extent that the
cost of such engagement would fall within the cap amount referenced in section 6 subject to
negotiation with DPS Staff. Central Hudson agrees that all provisions in this Attachment A
that apply to the Independent Monitor shall apply to any Successor Independent Monitor. In
addition, DPS may terminate the Independent Monitor for cause. If DPS terminates the
Independent Monitor for cause, it shall, within five days, submit to Central Hudson a written
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Attachment B
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Attachment B
Revised Monthly Meter-Reading Plan dated July 20, 2023 (“Revised Plan”)
Central Hudson Gas & Electric Corporation (“Central Hudson” or the “Company”) filed a monthly
meter-reading plan on January 17, 2023 in response to the New York State Public Service
Commission’s Order in Case 22-M-0645 Proceeding on Motion of the Commission Concerning
Central Hudson Gas & Electric Corporation’s Development and Deployment of Modifications to
its Customer Information and Billing System and Resulting Impacts on Billing Accuracy,
Timeliness, and Errors, issued and effective December 15, 2022.
The below sets forth an updated and amended tentative schedule for the Revised Plan:
August 1, 2023 Continued development and testing of a monthly meter-reading structure to
ultimate rollout to Company customers, which is anticipated to be performed
over an 8–10 week period.
October 1, 2023 Subject to completion of testing, Central Hudson will launch a proof of concept
(“POC”) to perform monthly meter reading for a small group of customers
(approximately 1,000). The Company anticipates performing the POC over
two full billing cycles (i.e., 2 months) to validate timely, accurate meter reads
and monthly bills throughout the entire monthly meter read to bill process.
December 1, 2023 Subject to completion of the testing and the POC, Central Hudson will initiate
a pilot monthly meter-reading campaign covering approximately 10,000
customers (which may include Encoded Receiver Transmitter (“ERT”)
saturated meter-reading routes). The Company anticipates that this pilot will
be performed during two full billing cycles (i.e., 2 months) and be completed
by the end of January 2024.
March 1, 2024 Subject to the successful completion of the pilot, the Company anticipates
launching Phase 1 of monthly meter reading, which would cover
approximately one-third of all Central Hudson customers. After two
subsequent billing cycles without experiencing any major issues, the Company
believes that it will be able to implement, in phases, monthly meter reading to
the vast majority of the Company’s customer base by the end of calendar year
2024.
At each of the above stages, the Company will evaluate the accuracy of monthly meter reads and
resulting bills and, if any material issues are identified, such issues will be resolved. This
verification and resolution process may require modifications to the above Revised Plan.
The Revised Plan is subject to the Company:
• being able to secure the necessary additional human resources, equipment, software
licenses, and vehicles to successfully complete the Plan and Revised Plan;
• not encountering any other significant system, technology, or operational issues that would
cause a disruption to its customer base for a prolonged period of time including, but not
limited to, adverse storm events or other emergency events;
• not being ordered to commence another billing or other system upgrade that would conflict
with its resources in order to execute the Plan and Revised Plan; and
• not being legislated by any government agency with proper authority to do anything
inconsistent with the Plan and Revised Plan.