A federal court judge has denied an attempt by Central Maine Power and its parent company to dismiss or delay a case being brought by customers who claim they received inaccurate charges from a new billing system, and that the company then tried to cover up the defects.
The decision opens the door for plaintiffs' attorneys to gather information and question company officials, potentially leading to a class-action lawsuit on behalf of customers.
In a ruling Nov. 25 in U.S. District Court, Chief Justice Jon D. Levy dismissed CMP’s motion, which argued that the five plaintiffs in the case should rely solely on a process for disputing inaccurate bills that’s already in place at the Maine Public Utilities Commission.
CMP’s parent companies, Iberdrola of Spain and Connecticut-based Avangrid, sought to have the case thrown out or at least have the court issue a stay until the customers pursue remedies offered by the PUC. They argued that the plaintiffs were creating the threat of a class-action lawsuit, instead of trying to prove the facts of their individual claims at the PUC.
Levy acknowledged the role of the PUC and its authority on regulating utilities. He also noted that the agency had completed its investigation into the billing issue and put in place an audit process to address some outstanding problems with SmartCare, as the billing system is called. But those steps didn’t preclude him from hearing the claims, Levy concluded.
“This is because those claims are focused on the overarching question of whether a systemic failure occurred with the 2017 launch of SmartCare that led to erroneous metering and billing of CMP customers,” Levy wrote, “and whether (CMP) misled the plaintiffs about this failure.”
The decision opens the door for lawyers representing the plaintiffs to ask formal, written questions of CMP, in an attempt to learn more details. They then will seek to gather sworn statements from top officials and eventually ask the judge to certify the case as a class action, to include additional customers who allege they were overcharged by SmartCare. This process could take several months.
“This is a good decision for us and the people who have been overcharged,” Sumner Lipman, an attorney involved in the case said Monday. “It looks more likely now that they’ll get their day in court.”
CMP said Monday that it can’t comment on the specifics of litigation but will consider its options on how to move forward.
“Regarding the basic complaint,” the company said in a statement, “following two independent system audits analyzing approximately four million bills, the PUC has definitively determined that CMP’s metering and billing system is accurately measuring and billing customer electricity usage.”
Last January, the PUC voted to penalize CMP by cutting its earnings by nearly $10 million over 18 months, citing the company’s longstanding customer service failings and mismanagement of its new metering and billing system.
The PUC’s conclusion also reflected findings by the Portland Press Herald in 2019 that CMP misled the public and mismanaged the rollout of SmartCare.
The $9.9 million earnings reduction was the largest single financial penalty ordered for a utility and its shareholders by the PUC in recent history.
But at the same time, consultants from the Liberty Consulting Group found no system-wide defects that would explain the higher-than-expected bills in early 2018. They blamed the surge on a winter cold snap and parallel rise in electricity supply costs.
The plaintiffs, however, charge that the PUC didn’t get to the bottom of what was happening.
In his ruling, Levy recounted the history and allegations surrounding the dispute.
He summarized how CMP switched from an aging, mainframe computer in October of 2017 to SmartCare, a metering and billing system designed to link up with the company’s digital smart meters; how 97,000 customers then saw average bills go up by 50 percent or more, while 200,000 customers noted lesser increases.
He noted allegations that CMP and its parent companies failed to adequately test SmartCare, billed customers despite knowing the system was defective and blamed the increases on factors ranging from old wiring to kids playing video games.
Levy recounted how in January of 2019, CMP’s chief executive, Douglas Herling, sent a letter to customers stating that Liberty found SmartCare was working as intended, that bills were accurate and the only shortcoming identified involved customer service staffing and management oversight after the rollout. The plaintiffs say that was a false statement. They say Herling, who is personally named in the lawsuit, repeated those assertions in articles published in the Portland Press Herald and Bangor Daily News, attempting to instill a false sense of security among customers and make them less likely to challenge bills.
“We are claiming CMP had known that there was a problem,” Lipman said, “and has used the Liberty report to try to claim everything was okay to convince people to pay their bills.”
In a separate but related matter, customers who say they are being sent improper winter disconnection notices by CMP filed a lawsuit in Cumberland County Superior Court on Nov. 23, asking a judge to stop the practice.
CMP said the allegations are inaccurate, and that the utility recently collaborated with the PUC and the state Public Advocate’s Office to make sure wording in disconnection notices complies with state regulations.