RG&E and NYSEG facing total of $18.5 million in penalties for not meeting customer service benchmarks

Two local utilities face millions of dollars in financial penalties for failing to achieve their annual customer service targets for last year.

Rochester Gas and Electric (RG&E) and New York State Electric and Gas (NYSEG) face a total of $18.5 million in penalties from the New York Public Service Commission.

$11.5 million of those penalties are assessed against RG&E, and $7.1 million against NYSEG. Both utilities are owned by Avangrid.

The metrics that the state measured the local utilities on include the rate at which they answer calls, the number of complaints to the PSC, a customer satisfaction survey and estimated bills.

The PSC said that RG&E and NYSEG each failed to meet all four of their customer service metrics.

In a statement, the Chair of the PSC, Rory Christian, said “Ensuring that the utilities operating in New York state maintain good customer services is a top priority for the Commission.”

The Commission noted that in an annual report, the two utilities attributed their under-performance to the COVID-19 pandemic and issues relating to increases in estimated utility bills.

RG&E and NYSEG said that they implemented a number of initiatives to address labor challenges and to assist customers, but they believe additional investments can be made to improve customer service.

In a separate announcement on Thursday, the PSC announced that New York State Electric and Gas incurred a $3.5 million penalty for failing to meet reliability standards. The PSC said that all other electric utilities met their performance targets in 2023.

The PSC report stated that “tree contacts” continued to be the single largest contributor to system interruptions for NYSEG in 2023.

The commission noted that it has authorized an expanded vegetation management budget for NYSEG it should help improve reliability for its electric system.

Avangrid released this response to the PSC findings on Thursday:

Last year, NYSEG and RG&E were faced with customer service issues mainly due to severe post-pandemic challenges and the great resignation, years of delay in smart meters approval by New York State and a higher Public Service Commission standard to meet than some other New York utilities. The companies faced these immense challenges head-on by hiring more than 140 new staff, holding more than 60 in-person community events around the state to meet our customers where they live and upgrading our technology and automation, including the game-changing rollout of 570,000 smart meters following the state’s approval.

This significant progress over the past year demonstrates that our efforts are paying off, with estimated bills dropping as low as 3% of complaint calls, answering the majority of calls within 30 seconds and overall contact satisfaction rebounding. We also continue to invest in projects to modernize our aging grid, focusing on reliability and resiliency across our service territory in the places we need to improve the most. We’re investing more than $2.1 billion into grid automation, tree trimming, and installing 45,000 new poles that will make a real difference in electric reliability for our customers. We will continue this forward momentum with investments and with our dedicated workforce to further improve the service we provide to our customers.

The PSC also issued $1.2 million in penalties against National Grid , who the commission said, "failed to meet its small/medium commercial and industrial customer satisfaction survey metric."

A National Grid spokesperson responded that in 2023, “Niagara Mohawk Power Corp. (the corporate name for National Grid) achieved 12 of 13 metrics, including – for the 16 ^th consecutive year – all metrics related to electricity reliability and gas safety.”

The company’s statement said that, “the lone customer service metric that was missed was related to the small/medium commercial and industrial customer satisfaction survey, which had an overall calendar year target of 78 percent. National Grid finished the year at 77.9 percent, resulting in a negative revenue adjustment of $1.2 million.”