PPL Electric Utilities Enters $17 Million Settlement With PUC Staff Over Billing Issues, Including Alleged Missing Supplier Charges

November 21, 2023

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Copyright 2010-23 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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A joint settlement has been filed at the Pennsylvania PUC by the PUC's Bureau of Investigation and Enforcement ('I&E') and PPL Electric Utilities Corporation ('PPL' or 'Company') which addresses, as termed in a PUC news release, "widespread consumer billing issues by PPL Electric Utilities Corporation[.]"

The settlement would include payment of a $1 million civil penalty by PPL and PPL’s agreement to absorb more than $16 million in related costs. The settlement remains subject to consideration and approval by the PUC

PPL Electric Utilities issued the following statement concerning the matter:

"We hope the Commission will approve the proposed joint settlement, the elements of which build upon the significant changes we already have made to PPL Electric Utilities’ processes and systems over the past year to prevent a billing issue like this from happening again. Supporting our customers and continuously improving our service are top priorities."

--- Statement from PPL Electric Utilities

The settlement states, "As a result of [a] MDMS [Meter Data Management Software] failure, 48,168 PPL accounts received no bill during one or more of their December, January, February, March, or April 2023 billing periods."

The settlement states, "As a result of the MDMS failure, PPL indicated that it issued estimated bills to 794,816 unique accounts from December 20, 2022, to January 9, 2023, and a total of 860,493 estimated bills from December 20, 2022, through May 5, 2023. Many of these estimated bills were unusually high or low or contained missing or incomplete supplier charges."

The settlement states, "Understanding that energy supply costs can increase over time resulting in higher generation costs from the customer’s supplier or a higher Price to Compare for customers who receive default supply through PPL, customers complained that some amounts had doubled or tripled. Based on discovery responses provided by PPL, the Company analyzed 387,895 bills that were estimated in January 2023 as a result of the MDMS issue to determine whether or not the estimates were accurate. PPL’s analysis revealed that 67.31% (261,104 customers) of the bills had an estimate differing from the customers’ actual usage of 10% or greater. Of these bills, 34.36% indicated an estimate that varied from actual by more than 25%. Nearly 48,000 customer bills were based on an estimate differing from actual usage by more than 50%. Inaccurate usage estimates combined with increased or inaccurate supply charges (as will be discussed below) resulted in customer bills that were far-removed from customers’ bills from a historical perspective."

The settlement states, "After sending its first wave of estimated bills, PPL discovered that 82,784 of these estimated bills did not include any supplier charges or included, at most, only partial supplier charges, thereby resulting in severely inaccurate bills. As a result, in February 2023, PPL began the process of cancelling the estimated bills and rebilling these accounts in order to correct the supplier charges portion of the bill."

The settlement states, "In some instances, customers were asked to pay the estimated bills or, on their own volition, paid the estimated bills anticipating that any difference between the estimated bills and actual usage would be reconciled when the next bill was issued. Concurrently, the Company began the process of cancelling and rebilling some customers. Some estimated bills paid by customers were cancelled and rebilled before the payment was processed resulting in further inaccurate rebills. The events that ensued took months to unravel."

The settlement states, "Due to the aforementioned billing issues, PPL experienced an increase in call volume from customers seeking explanations for their higher-than-normal bills. The unanticipated influx of inbound customer calling overwhelmed PPL’s customer service support, resulting in customers experiencing long wait times on hold before reaching a PPL representative or hanging up before reaching a representative. According to discovery responses provided by PPL regarding abandoned calls, between January 2023 and April 2023, PPL received an average of 193,529 calls per month. In January 2023 alone, PPL received 217,539 calls, 89,315 (or 41%) of which were abandoned, compared to an abandoned rate of less than 20% on average in 2022."

I&E was prepared to allege that the above-described actions violated various portions of the Pa. Code and Commission regulations

The settlement states, "PPL incurred significant costs when responding to the billing issues to help mitigate customer impacts, including, but not limited to: (1) experiencing approximately $2.3 million loss of revenue from voluntarily waiving late fees; (2) incurring approximately $7.8 million of additional bad debt expense arising out of the voluntary service termination moratorium; (3) forgoing collection of approximately $1.7 million from customers who were underbilled in the estimation true-up process; (4) incurring an additional approximately $3.7 million of unplanned costs in engaging external vendors; and (5) incurring approximately $700,000 of unbudgeted employee overtime expense (totaling approximately $16.2 million in mitigation costs). PPL agrees not to recover any of these mitigation costs from Pennsylvania consumers by any future proceeding, device, or manner whatsoever."

The settlement details various remedial and mitigation measures PPL undertook to correct the issues. "PPL Electric made significant efforts to modify internal practices and procedures to address the conduct at issue and prevent similar conduct in the future," PPL said in a statement in support of the settlement filed with the joint stipulation

In a statement attached to the settlement filing, PPL said, "although PPL Electric fully acknowledges the Billing Issues’ impact on the affected customers, PPL Electric’s conduct did not result in personal injury, property damage, or any similar consequence of a similar nature that may warrant a higher civil penalty. See 52 Pa. Code § 69.1201(c)(2). The Company also took steps to address the Billing Issues’ impact on the affected customers, including: (1) voluntarily waiving all late payment fees for January and February 2023; (2) voluntarily instituting a service termination moratorium for all customers from January 2023 to June 2023; (3) not seeking to collect approximately $1.7 million from customers who received estimated bills and were underbilled due to the application of the incorrect rates in the bills that trued up the estimated billing periods; and (4) refunding, through a one-time line-item credit, approximately $1.0 million to customers who received estimated bills and were overbilled due to the application of the incorrect rates in the bills that trued up the estimated billing periods."

Docket No. M-2023-3038060

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