ROCHESTER, N.Y. – The independent audit of RG&E and NYSEG is complete and it backs up years’ worth of News10NBC investigative reporting about major billing issues and customer service problems at the utilities. Auditors have made 128 recommendations for how RG&E and NYSEG can improve operations and do better for customers. In addition, the Department of Public Service issued a notice of apparent violations against the utilities stemming from staff’s review of the audit and information concerning the utilities’ recent operations.
For years, News10NBC Investigative Reporter Jennifer Lewke has been exposing billing, customer service and performance issues highlighted in this new audit.
The CEO of RG&E and NYSEG has previously admitted the utilities were understaffed coming out of the pandemic, during a transition to a new billing system and behind on meter reads. That threw thousands of customers into chaos.
While things have improved over the last few years, auditors say the utilities still have a long way to go.
In September 2023, the NYS Public Service Commission selected an independent, third-party auditor to perform a management and operations audit of NYSEG and RG&E. In the final report released on Monday which is nearly 500 pages, the auditor makes 128 recommendations to the companies which are both owned by Avangrid.
Notable findings from the audit include:
Cost Allocations and Service Level Agreements: The auditor found that Avangrid’s complex corporate structure makes it difficult to determine if the charges it allocates to NYSEG and RG&E are based on cost causation. The companies receive goods and services from 13 corporate affiliates. Some of those affiliates are holding companies for multiple utilities, thereby limiting the transparency of the allocations and making it difficult to ascertain whether costs are being allocated appropriately. The auditor recommends that the companies revise and update the Cost Allocation Manual and simplify the cost allocation process. Performance Management and Incentive Compensation: According to the auditor, all performance management activities occur at the Avangrid level. Avangrid does not develop operational plans to achieve goals related to NYSEG and RG&E. The auditor found that incentive payouts for executives are subjective and are not based on attaining goals specific to NYSEG and RG&E. The audit recommends that Avangrid conduct a third-party review of the NYSEG and RG&E CEO’s individual metrics and discontinue discretionary assessments. Physical and Cyber Security: The auditor noted that physical and cyber security programs are administered at the Avangrid level and that the cyber security program is not maturing as it should, despite cost increases. The auditor recommended that Avangrid strengthen its cyber security planning documents and metrics used to track performance and improve reporting to staff. Electric Operations: The auditor stated that asset management is also handled at the Avangrid level. Avangrid has not implemented a formalized and integrated asset management software platform and still relies on spreadsheets. Avangrid underspends on asset management, contributing to NYSEG’s poor electric reliability performance. The audit recommends that Avangrid implement an asset management system for NYSEG and RG&E. Customer Operations: The auditor found that Avangrid does not have appropriate controls for customer service outsourcing, augmented staffing invoice review and approval, or contract management. The auditor recommends that Avangrid determine drivers of call center cost increases and verify whether they are attributable to NYSEG and RG&E. The auditor also found that the companies’ customer service performance indicator (CSPI) metric reports have been inaccurate and recommends that Avangrid update its CSPI process documentation, create a formal override process, and enhance quality control.RG&E and NYSEG must file a plan addressing how they intend to address each issue with the NYS Public Service Commission by June 18th.
In addition to the recommendations, staff at the Department of Public Service believe NYSEG and RG&E may be violating state regulations in the following way:
Board of directors consists of ineligible directors because they also hold positions as officers or directors of unregulated affiliate companies, which would appear to be inconsistent with the Commission’s 2013 order authorizing the insertion of Avangrid Networks, Inc. into the ownership structure of the companies. Potential violations concerning maintaining customer billing records, and its billing procedures that resulted in prolonged estimated meter readings. On gas safety, DPS staff allege that NYSEG and RG&E have not complied with the regulatory requirements for reporting their response times to gas leaks or emergencies. On electric reliability, DPS staff allege that NYSEG has not met enforceable reliability service standards for six consecutive years, despite paying Negative Revenue Adjustment payments for these failures and despite Commission approval of larger budgets for capital and maintenance programs in the last two rate cases.RG&E and NYSEG must file a plan addressing how they intend to address each of those issues with the NYS Public Service Commission by June 18th.
News10NBC has reached out to RG&E/NYSEG, we are still awaiting a response to the release of the audit.
News10NBC’s previous coverage of RG&E billing/customer service issues:
www.whec.com/top-news/state-report-rge-and-nyseg-failed-to-meet-all-customer-service-targets/ RG&E reports answering 75% of calls within 30 seconds, 0.5% of bills required adjustments so far in 2025 www.whec.com/local/rge-and-nyseg-launch-energy-manager-for-smarter-energy-tracking www.whec.com/top-news/news10nbc-investigates-rge-vp-of-customer-service-says-utility-is-rebounding/ www.whec.com/top-news/state-report-rge-and-nyseg-failed-to-meet-all-customer-service-targets/ State attorney general looking into RG&E customer service number after News10NBC investigation (March 17) RG&E’s toll free TTY number goes to scammers (March 17) Palmyra family gets $13K bill from NYSEG (Feb. 9) Public packs hearing on RG&E billing, customer service issues (Feb. 7) 7k RG&E bill turns into 8K bill credit which turns into a shut-off notice (Feb. 2) How to fight back against RG&E billing errors and shut-off notices (Feb. 2) Customers express frustration at virtual forums about RG&E billing issues (Feb. 1) Billing and customer service problems continue at RG&E (Jan. 24) Following News10NBC investigation, state regulators expand probe into RG&E and NYSEG (Dec. 28) Frustrated homebuilder encounters more problems with RG&E (Dec. 16) Greece housing development slowed over struggles to get RG&E power (Dec. 12) RG&E billing chaos continues (Nov. 30) New Business Spends 17+ Hours Trying to Get RG&E to Hook up Gas Line (Nov. 4)Audit reveals potential violations, prolonged estimated meter readings at RG&E/NYSEG following News10NBC investigations WHEC.com.
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