Couple seek LIPA refund after overbilling

For years, Elizabeth and Robert Rizzo scratched their heads as LIPA bills arrived in the mail with sky-high charges that sometimes topped $800 a month.

The East Patchogue couple couldn't always pay on time and got hit occasionally with late charges, they said -- all the while wondering how two people who were rarely home with no children in a newly built house could rack up such bills. "It was like paying a mortgage," Elizabeth Rizzo said.

It was also a mistake. LIPA acknowledges the Rizzos had been wrongly billed as a commercial customer instead of a residential customer, resulting in higher rates. Since the rate class was fixed, the bills have plummeted. In January, it was $197.

But the couple are still wrangling with the utility for the full refund they contend they are owed for the 11 years they were erroneously classified.

"LIPA's attitude is, 'It's your fault,' " Elizabeth Rizzo said.

Elizabeth Rizzo was alerted to the error last summer while trying to work out an extended payment plan for one of the high bills. The commercial rate schedule meant she paid higher sales tax and a delivery charge up to 2 cents per kilowatt higher, according to a comparison of her bills.

Since commercial customers have always paid late fees, she was hit with those. LIPA only started charging residential late charges this year.

In letters to the Rizzos, LIPA acknowledged the incorrect billing, but said the Rizzos were partly to blame. The utility said it was the couple's responsibility to get the rate class corrected after they moved into their house, which was originally classified as commercial when it was a model home for sales in their development.

"The monthly [LIPA] bill and the yearly rate booklet [mailed with bills] are the opportunities for our customers to review their rate and make any necessary inquiries," read the March 8, 2011, letter.

The same letter points to the state Public Service Law stipulating that the Rizzos were eligible for a bill credit for only two years of overbilling, or around $1,000 including interest -- thousands less than they would get if the utility corrected bills for the additional nine years.

However, LIPA's own bylaws say it's the authority's obligation to refund overpayments and interest for up to six years. LIPA is not regulated by the state Public Service Commission.

In a statement, LIPA spokeswoman Vanessa Baird-Streeter said the Rizzos have "already received a significant adjustment entitled to under the Public Service Law." She added: "The customer has filed an appeal with LIPA and we are currently investigating."

Baird-Streeter did not address the distinction between LIPA's bylaws and the Public Service Law.

The Rizzos, and local lawmakers, argue it's the utility's job to make sure a customer is correctly classified, particularly because bills and rate sheets are difficult to understand.

"You need to be a rocket scientist to decipher them," Elizabeth Rizzo said. Lawmakers say the Rizzos should be reimbursed for 11 years of overcharges, not two.

"If someone is improperly overcharged they should be fully refunded," said Assemb. Robert Sweeney (D-Lindenhurst), whose bill seeking PSC review of LIPA rate increases went to the full state Assembly last Friday. Sweeney said it could be voted on this week, and he'll push the bill forward, but he's still waiting to hear from Gov. Andrew M. Cuomo on how LIPA should be regulated. Cuomo last month ordered an inspector general audit of LIPA.

Bill Faulk, an aide to Suffolk Legis. Ed Romaine (R-Center Moriches), called LIPA's refusal to fully reimburse the Rizzos "ridiculous."

"Acknowledge you made a mistake and fix it," Faulk advised LIPA. "It's the Rizzos' money. They overpaid. They should get it back."

He seconded Baird-Streeter's advice about reviewing bills, however difficult.

"Customers need to read their bills, and question them if they think it's the wrong rate code." Faulk acknowledged he doesn't take his own advice, however. His LIPA bill is automatically debited out of his checking account, and he rarely sees it.

As for her appeal, Elizabeth Rizzo said, "I'm not optimistic, based on the way we've been treated."

Don't get overbilled

LIPA customers are advised to check their rate class, which appears at the top of page two of the bill. Most residential customers are rate class 180, "Residential General Use."

If you live in a residence and your bill says rate 280, "Commercial, Small, General Use," as the Rizzos' bill did, call LIPA at 800-966-4818 and ask for it to be changed.

If LIPA balks, ask for a rate investigation.

If you don't like the results of that investigation, you can file an appeal. Payments on the disputed amount will be suspended until the dispute is resolved by LIPA.

Don't call the Public Service Commission -- that agency doesn't regulate LIPA.

Carefully review your bill regularly, and question excessive charges. Says LIPA spokeswoman Vanessa Baird-Streeter, "We encourage all customers to examine their bills to ensure that they are on the correct rate."