Central Hudson Gas and Electric is going through a period of intense public scrutiny and a related leadership transition. Chris Capone has just taken over as president and CEO as the utility responds to widespread criticism over its billing practices. Last year, the New York state Public Service Commission faulted Central Hudson for problems with billing, leading to errors for thousands of customers. Capone has been with Central Hudson since 2003 and says a key priority will be rebuilding trust. He spoke with WAMC’s Ian Pickus.
So, specifically, how will you rebuild trust? What do you look at as keys to that?
First and foremost, Ian, what's important is to acknowledge the problems and the frustrations we've caused for our customers. That has to be said right up front and we recognize we have not met our own quality of standards of service quality, and we haven't met our customers. That's important first and foremost to get out there. What I also want to discuss with you, is really the steps that we are taking in order to address these issues. And while we've made significant progress, we know there's continuing work that we have to do. We are going to be hiring upwards of one hundred people, including thirty-six people specifically in our contact center. We spent over $30 million of non-ratepayer funds to address these issues, and we'll continue to invest funds as needed to resolve these issues and we'll continue to do all the work that's necessary to bring, again, the service quality back to what customers have expected of us and what we expect of ourselves and to resolve the remaining issues.
What is the timeline for correcting the outstanding problems?
That's a little bit harder to pin down, only because the work is ongoing. So, I'd rather really not focus in on the how long it will take, but more so on the fact that we are working day in day out with some pretty extraordinary people, outside resources, additional inside resources to address these issues. So first and foremost, we want to make sure we have the system at the stage that it needs to be in order to make sure that all the bills go out correctly, and that we can respond to our customers the way they deserve.
I mentioned while introducing you that you've been with Central Hudson for 20 years. In your view, what went wrong?
In terms of the decision we made to roll forward and go forward, I just want to take a step back for a moment and talk a little bit about why we even undertook this project in the first place, because I think that's an important question that we haven't told as broadly and as completely to our customers. We have a homegrown mainframe system, which served us very, very well throughout the years, but it's at a point now where just getting the skills necessary in order to work on that mainframe has simply become harder and harder and the upgrades to this, what we call CIS (Customer Information System) urgently needed to be upgraded again because as time went by, it just got harder and harder to find those skills necessary in order to maintain and really improve the system and help us meet the customer needs and their growing expectations. So, in terms of the decision that we made to go live back in September of 2021, we did that in consultation with the system integrator, which is a world class firm that we employ to help us with this entire process. And with the information that we had in hand, even though we knew that there were some remaining issues, we did not feel that we should hold off going live and that we would be able to address them on a going forward basis, because every system after it goes live, as we've been told, will have certain issues that you just have to address in real time. But that's to be expected.
At some point between when that went online in September 2021 and now, obviously complaints were growing, people's bills were wrong. Was there something that Central Hudson could have done after the system went live that it didn't do, in your view to address the thousands of people who ended up with inaccurate bills?
Once we went go live and even leading up to that, again, we had a significant amount of incremental resources and after go live, as these issues emerged to the volume that they did emerge, we continue to add resources. And again, we're in the process of getting to over 100 incremental people, including over three dozen down in our contact center. And so, we think we are taking the right steps. But in no uncertain terms, again, we did not meet our customer expectations. We frustrated our customers. And that's certainly unacceptable to them. It's unacceptable to us. So now our goal is looking forward to make sure every bill that goes out is timely and correct. And that's really where we're focusing our time and energy.
Is the system working right today?
The system as it stands now, for the bills that are going out? Yes, we absolutely believe that all bills are accurate. It is essentially working as it was designed to perform. There was some work again, along the way from the time we went go live to where we are now. But we do believe that the system and the system status is as it should be, for a system implementation of this type.
You've talked in this interview, and as I mentioned in the introduction about rebuilding customer trust, and do you think that's possible, given what some of the customers have experienced over the last several months?
I genuinely do. I think part of everything that's out there now, again, are the customers that are frustrated. It's a portion of our customer base. We take that very seriously and we are doing everything we can, again, to make sure the bills are accurate, work with them specifically and directly to rebuild and for that trust to be restored. The other part I don't want to lose sight of is all the tremendous work that the remainder of our organization does day in, day out and I think that's important for people to recognize. We've been here for over 120 years. We have caused this frustration for our customers and we get that. But that day in day out work, the storm response, responding to gas odor complaints, all the other work we do for our customers, I still think that is incredibly valuable in helping the community live the lives that they need, getting the energy they need in a safe and reliable fashion. So, while I know it's important to address this issue, I think these other things that we do, what we've done in the past, what we'll do today, and what we'll do going forward, also factor into rebuilding that trust. Because when things turn difficult, such as storms, we are the ones who show up. We in effect run towards that difficult weather, while other people are waiting for that assistance to arrive. We are those people, and I'm very proud of our workforce to undertake those responsibilities. And I do think that, plus correcting the system issues and again, guaranteeing that the bills are timely and accurate, will help rebuild our trust and will get us back to that place where people look at us with confidence. We look at ourselves certainly with pride, in that I think we get back to where we were prior to these issues.
The state and the state PSC report from late last year found that more than 8,000 customers had been wrongly billed. What number of customers bills are still wrong now?
Well, again, rather than focus on the exact number, I do think it's important to focus on the steps that we're taking. Again, the adding additional people, the spending of the over $30 million dollars. And that is to drive down that number down to zero and we are on that pathway. And it's important for us, obviously, to make sure that we assess very, very carefully what any remaining issues are for customers and to make sure, again, that those bills go out accurately. And then certainly over time go out timely as well as accurately.
Well, respectfully, it sounds like given the resources that Central Hudson is putting into fixing the problem that it's still a sizable issue.
I don't think it's still a sizable issue, but if you're the customer impacted, it's a critical issue. So, we have resolved many of the issues that were there in the go live period in the post go live period. There are some customers that we're still working with to make sure that the bills are accurate and timely. But that number has come down considerably. But until it's zero, our work isn't done.
Okay, you know what the number is? Is that right?
At any given point, it's a number that's moving as we make progress. So, to give you a specific number, I'm not sure that that will have any real context. But what I will say is, we are in the process of developing metrics that we will be sharing with our regulators and with the communities and those will be out soon. That will allow people to assess and evaluate and hold us accountable to the kind of progress that I think you’re really getting to which is, when are we going to bring that number down to zero? So again, rather than focus on an exact number, we're focusing on the resources we need the progress we need to show and being more visible with everybody to create that opportunity for people to be able to measure us on a very frequent basis to assess how good a job we are or are not doing.
Your predecessor as CEO was removed under pressure from state and federal elected officials. So, as the new leader of this utility, what do you plan to do differently?
Well, the initial part of your statement, the decision to change CEOs, that is something that the board made a determination on and I really don't want to get into the details at this point. But there are things that I will be doing differently. A lot of it is building on what Charlie Freni did. He had a four-plus decade career here and he made some pretty extraordinary contributions to the success of our company over time. But what I see doing a little bit differently and doing more of, is increasing the communication with all of our stakeholders. Again, our customers, elected officials, regulators. It's having all of us as Central Hudson being even more visible in the communities, answering the difficult questions, giving progress updates, so that people are confident that we are moving in the direction that we all know we need to move, and again, that they can measure and hold us accountable. So, we can return back to what we felt was a very strong, if not excellent level of customer service. So again, it's to be out there more, telling people what we're doing, reassuring them that this is extremely important to them. And it's extremely important to us. And we will continue these efforts, again, until we resolve all of the remaining issues.
Have you spoken with people like State Senator Michelle Hinchey and Congressman Pat Ryan who had given intense scrutiny to Central Hudson since taking over this position?
I have not spoken with them yet, but we have a plan and we have some meetings established to work with them, and I look forward to that. We need to hear it directly, obviously, they have been out in the public domain representing their constituencies, which is exactly what they should be doing. Our customers were voicing their frustration and they in their leadership roles certainly had to communicate that to us loud and clear and they did. The message was very well received. So now again, as I was mentioning, going out there and working directly with stakeholders and elected officials, we have a much more comprehensive plan, where we're going to meet with people such as Congressman Ryan, Senator Hinchey, and certainly other elected officials, county executives, to again meet with them in person and explain what we're doing, field their questions, let them tell us what their constituents, which are our customers, are telling them and to voice their frustrations as well, so we can address this head on. It really is about transparency, visibility and also going out there again, and giving people the opportunity, these elected officials especially, to voice their concerns directly to us, and I look forward to working with them. We all have the same interest at heart serving our customers in their cases, obviously serving their constituents well. So, we have a common interest. I think we're very much aligned. And that is very much part of our plan going forward as part of what I think we will do more of and do a little bit differently.
Let me ask you a practical question. What does Central Hudson, what do you think of State Senator Hinchey’s bill that would end estimated billing for utility customers, which was part of the issue here?
We're aligned with Senator Hinchey’s bill. We hear the frustration of our customers, even aside from these billing issues, that people don't like estimates. So, as part of our response to the show cause order, we submitted a plan to move from bimonthly meter read to monthly meter reading, and we look forward to having those discussions continue because it's a source of frustration for our customers, and so it'd be something that we would actually look to eliminate by moving to monthly meter reading over time. So, we look forward to those discussions and seeing how we can best meet our customer needs.
Would ending estimated billing impact the cost of a bill?
It will likely impact the cost of a bill because there will be incremental resources necessary. Additional meter readers, equipment and things like that will have to be put in place and paid for. It'd be a very, very modest change to the bill or increase to the bill, but it would have slight impact going forward. Yes.
Okay. Just a couple more questions. If somebody is listening to this right now and they’re a Central Hudson customer and they feel like they have not been heard in this process or they still have an outstanding problem, what should they do?
Well first, if they feel like they're not being heard, again, that's our responsibility to give them the opportunity. I think what has been done so far, in terms of the outreach to the electives, and what they are doing in terms of communicating directly with us, has given us a very clear sense of their concerns and their frustration. I would ask them to continue to do the outreach to us directly, rather than say filing a PSC, Public Service Commission complaint. That complaint actually takes away some of the resources to address those complaints that we could be spending talking directly with our customers. We want the opportunity to explain their bills, because sometimes when you look at New York utility bills, they're fairly complicated, and a lot of it is prescribed. So, we would rather be able to engage directly with that customer, walk them through what the line items are in order to give them the visibility. What we would also like to do and what we are doing, and we’ve begun to do is working with the elected officials to give them even more information, so as the outreach happens directly to them, they can help explain the bills and explain what's going on with a customer's utility bill. So again, continued outreach, but also from our standpoint, again, we need to do a better job communicating how the bill is made up. It's made up of two primary parts, the commodity portion, we make no profit there, we buy on behalf of others, and we pass it through, and then the delivery portion, which we certainly control. So, we will need to put out and we will be putting out more information and that, hopefully, will give customers the information that they need, so that they won't even feel compelled to call us in the first place.
Do you think somebody who's gone through months to more than a year of frustration over inaccurate billing should trust Central Hudson to solve the issue itself, rather than involving a call to an elected official or the PSC?
I genuinely do. I believe that we have the most knowledge and insight and understanding, given it’s what we do day in day out. The elected officials have an awful lot of issues that they have to deal with on a day in day out basis. And while they're very knowledgeable, even on these types of issues, I really feel that we are the experts in the area, and certainly we should be. So, I believe that yes, we are the right people to address these issues, to regain that confidence of our customers to say, I get a bill and it's accurate.
Did you yourself ever have an inaccurate bill?
I did not.
Okay. We've been speaking with the new CEO of Central Hudson, Chris Capone. I want to thank you for taking all the time to answer these questions. I tried to think of questions that we have heard from Central Hudson customers and the elected officials and I really appreciate you coming on the air to address them.
Ian, thank you very much for the opportunity to discuss these critically important issues and I'm glad that I was able to answer some of your questions.
