Making the Case for Submetering Reforms
October 20, 2009
Residential submetering of electricity is a practice with significant implications to tenant protection, consumer protection, and environmental conservation. But despite the high stakes, it is an issue that has received relatively little attention. While submetering has proliferated under the political radar, changing the lives of low- and middle-income tenants, few attempts have been made to address the issue systematically.
Earlier this year I blogged about five bills that I introduced to reform submetering in New York State. Last week, I was pleased to be offered an opportunity to discuss my legislative efforts at the New York State Bar Association’s Eleventh Annual Institute on Public Utility Law held in Albany.
10.16.09 IPUL Sub Met Ring Leg Remarks
A Landmark Victory for Eastwood Tenants on Submetering
September 18, 2009
Yesterday, the New York State Public Service Commission issued a landmark decision on electrical submetering in residential buildings - delivering a big victory to tenants at Roosevelt Landings and elsewhere. (See today’s New York Daily News article, “Mitchell-Lama Housing Tenants Win Out in Dispute Over Electric Bills.”) The Commission’s order, which came in response to my petition to overturn submetering at Roosevelt Landings, ordered a permanent halt to submetering at that building and several others, until and unless the landlords consult with tenants and develop a new submetering plan with substantial tenant protections.
I cannot thank PSC Chairman Brown and the Commissioners and staff of the Public Service Commission enough for their groundbreaking decision to permanently stay the submetering orders for Roosevelt Landings, Frawley Plaza, Metro North, and the Alpacas I&II. The full order is linked here from the Public Service Commission website.
Initially, when I challenged the PSC’s approval of submetering at Roosevelt Landings, the PSC issued a temporary stay. Now that the Commission has made that stay permanent, tenants can rest assured that they will not be subjected to any submetering scheme without their full consultation and basic tenant protections to ensure they are not unduly burdened.
The PSC’s decision promises a brighter future that doesn’t pit tenant rights against environmental goals—it proves that we can do both. The protections won are meaningful acknowledgments of what has been a deeply flawed process from a tenants’ rights perspective—and while more needs to be done, there is no question that we are moving in the right direction.
The Commission’s order addresses the need for tenants to be protected from illegal eviction proceedings that are too often brought over unpaid utility bills. It also acknowledges that asking tenants to use energy more efficiently means requiring landlords to give tenants the tools that make this possible, such as installing thermostats in electrically-heated buildings.
While I am pleased with the victories won yesterday, more work needs to be done to ensure that tenants are treated fairly. Some of the requirements do not go far enough—for instance, I do not believe that submetering should ever be allowed in the minority of buildings left in New York City that use electric heat. At a minimum, I will continue to push for the metering of electric heating to be separated out from other electrical uses.
Also, while this order relates to four specific buildings—creating tremendous precedent for future cases—the reality is that these basic tenant protections should be clearly written into law so that all New Yorkers share the same rights and are governed by the same rules.
A Message from Assembly Member Micah Z. Kellner
June 18, 2009
While the New York State Senate is completely dysfunctional, the Assembly is hard at work doing the people’s business. This week, we held dozens upon dozens of committee meetings and acted on well over 300 bills. Among the important legislation we have passed this week is a measure improving New York City’s school governance by making the mayor and chancellor more accountable and giving parents a greater role in their children’s education, as well as a balanced and fair tax package for the New York City budget which includes relief for freelancers and entrepreneurs, and my own bill expanding the tax credit for wheelchair-accessible taxis.
I am also proud to report that my bill to require that residential tenants who have submetered electricty (A.7867) are provided with annual notice of their right to access the Public Service Commission’s complaint process without going through any other court or arbitration has passed the Assembly. This bill is part of my 5-bill package to reform the way that submetering works for residential rental tenants in New York, which I blogged about in May.
As well, my bill to prohibit the siting of a waste transfer station within 800 feet of a public housing project (A.6829) is advancing in the Assembly and has already been passed by two of the three committees it needs to go through before it can come to the floor. This bill would prevent the City from implementing its disastrous proposal to build a marine transfer station near Asphalt Green in the northern most part of my district.
All of this work is essential to the neighborhoods that I represent, and I am very pleased with this progress. It is therefore doubly disappointing that the bickering in the Senate has prevented that chamber from doing its job, holding up issues of critical importance to our community and to all New Yorkers. All legislators should be accountable to the people–and that means putting the people’s business before personal or professional interest.
Despite the chaos in the Senate, I will leave Albany this month knowing that I’ve done my part to serve the people of New York. I sincerely hope that the Senate can stop its petty fighting over who gets what title, and get back to work on helping our state weather this unprecedented financial storm.
–Micah Z. Kellner
5-Bill Submetering Package Unveiled at East Side Submetering Summit
May 18, 2009
Last fall the residents of the Eastwood complex on Roosevelt Island were informed by their landlord, Urban American, of an application to the New York State Public Service Commission (PSC) to convert their building to submetered electricity.
Submetering is when tenants are billed individually for their unit’s electrical usage rather than the landlord. In 1951, the PSC prohibited all residential electric submetering, calling the practice “parasitic.” Now, the practice of submetering is again allowed by the PSC on a case by case basis, creating a host of new problems.
For Eastwood, I was skeptical from the get-go that a 33-year-old building with a baseboard electric heating system, energy-inefficient appliances, faulty thermostats, and a host of other issues, could establish a submetering scheme that wouldn’t result in a de facto massive rent increase that prices families out of their homes. However laudable the environmental goals of submetering, it doesn’t always make sense. In order for submetering to result in cost-savings and energy conservation, tenants need to be able to have the tools to conserve electricity. This is simply not possible in a building like Eastwood. I requested that two months of sample billing be sent to residents prior to the start of actual billing. Those bills were alarming bills over $200 to as high as over $1000 were not uncommon for all unit sizes. Soon after I petitioned the Public Service Commission to stay the submetering order and re-hear the landlord’s application. That re-hearing is on-going.
In the meantime, I made it my mission to find out what went wrong, and on a legislative level, work with advocates for residential rental tenants, like the Public Utilities Law Project (PULP) to find legislative solutions. Earlier this month, these efforts came to fruition with the introduction of a five-bill package, which I unveiled at a submetering summit on May 16th that was organized by the Waterside Tenants Association. If you missed the opportunity to attend that panel, you can still listen to the audio recording of Assembly Member Brian Kavanagh and I discussing the legislative solutions we are pursuing in Albany to better balance the rights of tenants with the environmental goals of submetering.
Listen to Audio from Submetering Panel (5/16/09)
I have introduced five bills, along with State Senator Bill Perkins, to reform the practice of submetering utility services to residential rental tenants.
A.7353
Bans the deeming of utility charges as rent. More and more, tenants are finding themselves in situations where landlords are taking them to court for eviction because they can’t afford to pay their electric bill. This legislation bans that practice.
A.7354a
Prohibits landlords from submetering for the heating of living quarters. It is well established under the law that landlords are legally required to provide heat to rental tenants—when a building’s heat is electric, submetering undermines this. Also, electric heat is incredibly inefficient, and a tenant can do little to control their costs meaning that the submetering of electric heat represents an undue burden on the tenant.
A.7814
Requires the PSC to perform an audit of submetering orders issued in the last five years to determine compliance to utility price caps, tenant protections, and to determine if there has been an actual energy savings. We have know way of really knowing whether or not the energy-savings that submetering is supposed to bring are really happening, nor do we know if landlords are complying with price controls and respecting tenant protections in submetering orders. Requiring the PSC to undergo an audit of the last five years of submetering orders will shed light on the situation and help determine the way forward. When this bill is passed, no new submetering orders will be allowed for one year, the same amount of time the PSC has to complete the audit and submit it to the governer and the legislature.
A.7867
Requires utility customers to be provided with an annual notice stating their right to access the PSC’s complaints process. Too often, landlords and the PSC itself will divert a tenant with a grievance against their submetering utility (the landlord in these cases) to the court system. Courts should be a last resort, and the law already provides for a grievance and resolution process through the PSC. Tenants need and deserve a straight-forward way to have issues addressed; diverting tenants to court discourages the reporting of problems and creates too much of a burden on tenants to get their issues addressed. This bill ensures they are informed of their legal rights.
A.7871
Reforms the submetering application process; creates the requirement of written notification to the tenant when the application is first filed, a formal comment period, a public hearing, requires the landlord to replace all landlord-provided appliances that are not Energy-Star rated with ones that are, and requires that the landlord include in their application the results of a study detailing the thermal characteristics of the building. The bill also establishes a conditional approval phase which lasts one year, after which time the PSC must review billing to ensure that energy savings and billing is appropriate and doesn’t create an undue burden to rental tenants. As well, if tenants provide three bids for an independent energy analysis, the landlord must pay for one.
Opposition to Eastwood Submetering Scheme
February 9, 2009
It was standing room only as Eastwood residents packed the Chapel of the Good Shepard Church for an emergency community organizing meeting last Saturday.
Last fall the residents of the Eastwood complex on Roosevelt Island were informed by their management company, Urban American, that management was applying to the New York State Public Service Commission (PSC) for the building to be converted to submetered electricity. Submetering, as opposed to mastermetering, is when tenants are billed individually for their unit’s electrical usage rather than the landlord.
From the get-go, I was skeptical that a 33-year-old building with a baseboard electric heating system, energy-inefficient appliances, faulty thermostats, and a host of other issues, could establish a submetering scheme that wouldn’t result in a de facto massive rent increase that prices families out of their homes. However laudable the environmental goals of submetering, it doesn’t always make sense. In order for submetering to result in cost-savings and energy conservation, tenants need to be able to have the tools to conserve electricity. This is simply not possible in a building like Eastwood.
It was for these reasons that I requested two months of sample billing be sent to residents prior to the start of actual billing. What we have seen since those bills began to arrive last week is alarming. Bills totalling $600, $700, $800, $900, and even $1000 are not uncommon - for all unit sizes.
This morning, the New York Times published an article about this issue and in it Douglas Eisenberg, CEO of Urban American is quoted as saying the following:
“I think that changing one’s habits is a difficult thing to do, and this really takes people being proactive about saving energy[…] A lot of these residents have lived in this building a long time. They haven’t been responsible for their electric bills. Now they are. I think at the end of the day, I feel pretty good that we’re doing the right thing here.”
I am fairly offended by these remarks, as I am sure Eastwood tenants are. If I ran every appliance in my apartment 24-hours a day for a month, I doubt I could match most of the electric bills that Eastwood residents are facing. Electric baseboard heating is simply the most inefficient system you can have in a building like this. And what’s worse is that Douglas Eisenberg knows this. His company has been paying this electric bill since they bought the building, and now they don’t want to do that anymore. Blaming the tenants and accusing them of being wasteful is a low-ball move and it’s not fooling anyone.
I have only seen two bills so far, out of hundreds, where the rent reduction covers what was approved by the PSC, and most tenants are many hundreds of dollars away from that mark. If you are an Eastwood tenant and you have not yet faxed me a copy of your sample bill, please do so. My fax number is 917-432-2983.
One piece of good news to report is that through my negotiations with the NYS Division of Housing and Community Renewal (DHCR), the rent reduction schedule will be improved slightly. DHCR is responsible for setting the amounts for Section 8 tenants based on a strict interpretation of federal HUD regulations. (And the rent reductions for Section 8 tenants were applied to all tenants.) However, the initial calculations by DHCR assumed a lower dollar per kilowatt/hour amount than what tenants are actually going to be charged by Con Edison (14 cents per kwh as opposed to 18 cents per kwh). The new rent reduction rates can be accessed by clicking here, and while they do not solve the problems tenants are facing, I am pleased that DHCR has taken the step to review their calculations in order to ensure that tenants are at least given what they are entitled to under the law.
Despite this small victory, I do not believe that Eastwood is an appropriate candidate for submetering, under any rent reduction scheme. Having now viewed the sample bills, I, along with my colleagues (Congresswoman Carolyn Maloney, Borough President Scott Stringer, State Senator Jose Serrano, and Council Member Jessica Lappin) wrote to the Public Service Commission and petitioned for the Eastwood submetering application to have a re-hearing so that a number of factors that may have been initially overlooked may be examined more closely.
***UPDATE*** The Public Service Commission has granted my request for a stay of submetering and the landlord’s application is now in a re-hearing process. Tenants at Eastwood have until April 1st to submit comments to the PSC on the application itself. Please contact my office for more information at 212-860-4906.
