Funk & Zeifer Settles a 5+ year Dispute for a Multi-family, NYC Condominium Client with Con Edison on Favorable Terms

NEW YORK, NY (April 7, 2017) — Energy law firm Funk & Zeifer LLP achieved a favorable settlement for a multi-family, NYC condominium which had been substantially overcharged by Con Edison.

Con Edison had installed an oversized gas turbine meter in a new residential condominium in 2004, and, in 2012, realized that the meter was not reading a small portion of gas usage due to its size. Instead of installing a meter capable of properly measuring the gas volume, Con Edison attempted to correct the situation by reprogramming the “Mini-Max,” a device connected to the meter that corrects for gas pressure and temperature volume (not under-reading). As a result of the “correction,” the gas usage the meter recorded was now multiplied by a factor of 10, but the turbine meter specifications instead required a 1:1 factor.

The net effect of the “correction” was to overbill the customer by more than 300% for both gas transportation and the cost of commodity provided by an ESCO.

To obtain relief from these excessive costs, the customer complained to Con Edison, commenced a formal complaint with the NYS Department of Public Service (“DPS”) Office of Consumer Services (“OCS”), appealed an adverse decision at the lower level and sought to negotiate with Con Edison to resolve the matter. Throughout the process, Con Edison maintained that testing showed that the gas usage indicated by turbine meter and reset Mini Max was correct throughout this time period – in spite of mounting evidence to the contrary.

In collecting and analyzing the evidence of gas usage, Funk & Zeifer worked with Steve Stone of DSM Engineering Associates, a well-known engineering firm focused on energy system engineering including facility energy use monitoring and analysis. The evidence clearly showed that actual gas usage was far less than the charges suggested. One interesting calculation performed by Mr. Stone based upon domestic hot water (“DHW”) usage showed that the condominium could not possibly be using the amount of gas claimed by Con Edison even if the occupants of each of the 64 units in the building took 25 hot showers every day.

Mr. Stone also urged that the turbine meter be replaced by a smaller rotary meter that could accurately measure small amounts of gas. In 2014, the Department of Public Service gas staff (“Staff”) found that the installation of the oversized turbine meter had been a mistake and recommended that it be replaced by a smaller, properly sized rotary meter and new Mini Max. Upon that replacement, the gas readings abruptly, sharply and correctly dropped and the overcharges ceased. That fact, however, did not result in a settlement.

The case was decided by an Informal Hearing Officer of OCS on October 31, 2014 who recited all the evidence of overcharges proffered by the condominium (including the abrupt drop in usage recorded upon installation of the replacement rotary meter) but held for Con Edison in 2 sentences with no analysis. The condominium appealed to the PSC, and for another 3 years the appeal, which included submissions of additional facts supporting the customer’s position, continued. During the course of 2016 and early 2017, while the appeal was pending, the parties were brought together by the OCS for the purpose of conducting negotiations and the parties ultimately entered into a settlement on terms favorable to the customer.

Throughout this case, Funk & Zeifer made numerous legal filings and was greatly assisted by the members of the board of the condominium, who helped gather factual evidence and took the lead in several areas, including preparing explanations of the severely adverse financial impact of Con Edison’s intransigence upon the residents of the condominium.

Peter Funk is an energy attorney whose renewable and alternative energy practice encompasses comprehensive handling of renewable energy, cogeneration and energy conservation projects. Engagements have included private and public on-site cogeneration, metering, renewable energy conservation measures, energy management and data centers as well as solar, biomass and biogas installations and waste-to-energy.

Funk is co-founder of the energy law boutique Funk & Zeifer LLP based in New York City.