Res. No. 1602

Resolution calling upon the New York state legislature to pass and the Governor to sign, legislation requiring utility companies (including gas, electric, water, internet and telecommunications) to prorate customer bills to compensate for disruptions in service.

By Council Member Dromm 

                     Whereas, For most New Yorkers, at least thirty percent of their income is spent on housing and basic (electric, gas, water) utilities; and

                     Whereas, New York ranks as the fifth most expensive state in the country for utility bills, and residents pay more, on average, for electricity, gas and internet services; and

                     Whereas, It is not surprising then that New York City is one of the most expensive places in the world to live; and

                     Whereas, Unfortunately, even though New Yorkers are paying some of the highest prices in the country for their utilities, they do not necessarily receive the best service or most satisfying customer experience; and 

                     Whereas, According to data from the Office of the New York Attorney General, utility-related complaints, which include those against electricity, water, gas, phone, cable and internet service providers, were in the top five most-common complaints in 2019; and 

                     Whereas, Earlier this year, Verizon Fios customers in New York, and along the whole northeast of the country, experienced internet outages over a number of hours; and

                     Whereas, Such outages are frustrating at the best of times, but now, during the COVID-19 pandemic when people are forced to work and study mostly online, these outages are incredibly disruptive; and

                     Whereas, The consequences for electricity outages are even more severe; and

                     Whereas, Over the past few summers, New Yorkers have experienced numerous power outages, often during searing heatwaves; and

                     Whereas, The consequences of these outages can be deadly and, adding to the injustice, not distributed equally; and

                     Whereas, For instance, in New York, Black residents are the victims in a majority of heat-related deaths, despite only comprising around a quarter of the city’s population; and

Whereas, Such deaths are largely preventable when cooling is available, accessible and affordable; and

                     Whereas, Even when the impact of utility outages is not life-threatening, from a consumer perspective, it is trying and disruptive; and

                     Whereas, Even more frustrating for customers is that, in most instances, they continue to be billed, even when there are service disruptions; and

                     Whereas, While it is sometimes possible to get a credit or refund for interrupted services, often customers will have to negotiate for refunds, adding further  frustration and hassle; and 

                     Whereas, In some jurisdictions, the law provides for customer reimbursements if there are utility outages; and 

                     Whereas, Seattle, for example, offers cable customers a bill of rights that stipulates a range of compensation amounts for various problems with services; and

Whereas, In New York state, the Department of Public Service, which regulates utilities such as electric, gas, steam, water, cable and telecommunications, dictates that cable customers who experience an outage of more than four hours are entitled to prorated compensation, provided the customer applies for the reimbursement; and

                     Whereas, At present, no such regulations exist for electricity or steam utilities in New York, although Senator Michael Gianaris has introduced S.86, which would establish reimbursement mandates for these customers in the event that they experience service disruptions; and

                     Whereas, Until there are comprehensive regulations, utility customers are left with little recourse in securing compensation for outages, outside of negotiating with the utility company for a refund; and

                     Whereas, This gives utility companies little incentive to improve their service; and

                     Whereas, In the United Kingdom, the government communications regulator (Ofcom), which oversees television, radio, video on demand, cellphone and landline, and postal services, set up their compensation scheme to consciously tackle this consumer protection issue; and

                     Whereas, Prior to the April 2019 implementation of the compensation scheme, Ofcom found that there were more than seven million cases of customers suffering from delayed repairs, loss of service and other consumer issues, but that compensation was only paid out in small amounts in about one in seven cases; and

Whereas, By establishing a mandate for automatic compensation, however, utility companies are put on notice that their poor service will result in customer reimbursements and thus, encourages these companies to improve service; and

Whereas, Customers in New York deserve the same kinds of protections for all of their utilities; and

Whereas, Living in one of the most expensive cities in the world should guarantee reliable service of essential amenities, such as electricity, internet, gas, water and telecommunications; and

Whereas, When this cannot be guaranteed, customers should at least feel certain that they will be compensated for service interruptions; now, therefore, be it

Resolved, That the New York state legislature pass and the Governor sign, legislation requiring utility companies (including gas, electric, water, internet and telecommunications) to prorate customer bills to compensate for disruptions in service.

LS #16968

3/31/2021

LMS