Lawyers for aggrieved customers pan CMP compensation fund

Lawyers representing Central Maine Power customers seeking a class-action lawsuit against the utility say CMP’s proposed $6 million compensation fund is just a tactic to avoid paying out what they estimate to be $140 million in damages.

Comments this week by Jeff Russell and Sumner Lipman follow a recent letter that Lipman sent to plaintiffs in the case against CMP, for what they say are incorrect bills tied to the trouble-plagued rollout of a new billing system in 2017. The plaintiffs are seeking class-action status.

In the letter, Lipman alleges – without providing evidence – that as many as 300,000 customers were overcharged at least $200 million by CMP and its parent companies, Avangrid and Iberdrola.

“We believe the proposal (compensation fund) is an attempt to avoid a class-action lawsuit for a bargain price, while also demanding that Maine customers pay for it through a rate increase,” Russell said Monday.

CMP has acknowledged 107,047 billing errors, and has told the Public Utilities Commission that 97,000 customers got bills in which their delivery costs were 50 percent or more higher than a previous three-month winter period. Another 58,000 were under-billed, CMP reported.

The company has proposed establishing a $6 million compensation fund, among other measures, to resolve the ongoing dispute through state regulators rather than the courts. CMP stipulated in the proposal that the $6 million would be paid in lieu of financial penalties recommended by the PUC’s staff for poor customer service.

A CMP spokeswoman, Catharine Hartnett, declined to comment on the lawsuit, but defended the company’s accounting.

“We have acknowledged these (errors), corrected them and reported them to the PUC,” she said. “When necessary we have compensated customers.”

DIFFERENT DETERMINATIONS

The wide gulf between the numbers alleged by the plaintiff lawyers and those provided by CMP highlight the level of disagreement and uncertainty that remains more than a year after the PUC began investigating complaints of high bills.

The suit is in a holding pattern until the PUC finishes its investigation of the billing system problems, a process recently delayed until at least December.

In a Feb. 22 ruling, Superior Court Justice Michaela Murphy noted the PUC has jurisdiction over regulated utilities. She denied a request for a temporary restraining order and postponed any further action until the PUC probe wraps up. The named plaintiffs have since sought to expand their complaint to include fraud charges and to add Avangrid and Iberdrola, as well as CMP’s top officer, Doug Herling.

But last week, a development at the PUC provided their lawyers with a new and more immediate avenue of attack.

In a parallel rate investigation before the PUC, CMP is making an attempt to settle up with customers with disputed bills by proposing a unique compensation fund that would be administered by the PUC. The agency said last week that it won’t rule on the merits of the proposal until its investigation is complete.

Lipman’s letter, as well as comments by him and Russell in interviews with the Portland Press Herald, are aimed at putting pressure on the PUC not to approve the fund and on the judge to allow the class-action suit to move forward.

In an interview Monday, Lipman said media coverage of the fund proposal, first reported by the Press Herald, has triggered a new round of calls from more than 30 people seeking to join the class-action suit. He’s adding them to the more than 3,000 people who he says have contacted his office and had their information taken down by paralegals and accountants.

In his letter, Lipman makes reference to 97,000 customers who were “overcharged 50 percent or more” by billing errors. His legal team found the average bill was $1,473, and he multiplied that by 97,000 to arrive at the $140 million figure.

“We need your help to prevent CMP, Avangrid and Iberdrola from avoiding court action,” Lipman wrote to the plaintiffs, asking them to contact media outlets and editors.

That appeal was repeated Tuesday on CMP Ratepayers Unite, an online forum for 8,000 customers opposing rate hikes and high bills. It included an image of a Trojan horse, implying that customers were being fooled by CMP deception and lies.

Lipman called CMP’s proposed fund “totally inadequate,” and further estimated that a total of 300,000 customers may have been overcharged as much as $200 million. Asked by the Press Herald if he has evidence to support that claim, Lipman said he was basing it on the number of people contacting his office and their average bills, as well as CMP Ratepayers Unite.

“I don’t think we can prove 300,000 cases individually,” he said. “But I think we have enough evidence that a jury would find that this was the general practice. People have a right to a jury trial.”

That theme was amplified by Russell. Only a small percentage of customers who were affected by the billing problems have filed formal complaints at the PUC, he said, and the agency isn’t designed or equipped to assess how much each customer could be owed. He noted that some customers hired electricians to test their meters and others bought new appliances in the belief that something was wrong with their equipment. They, too, should be compensated for those expenses.

“The purpose of a class-action lawsuit is to provide the best path toward compensating a large group of affected people without requiring that each one be individually assessed and administered,” Russell said. “The court lawsuit is the correct way to resolve this for Maine’s customers.”