For most New Yorkers, paying

the bills is a routine chore, an

unpleasant but necessary task

to keep the water running and

the lights on. New York City’s

exclusive water provider, the

Department of Environmental

Protection (DEP), plays a key

role in this routine and has

sought to improve billing

accuracy by installing more than 800,000 new automated readers in all

City homes and businesses. But a comprehensive study by Public

Advocate Bill de Blasio, sparked by complaints from 145 home and

business owners1, shows these new transmitters can result in

inaccurate readings that overcharge residents—sometimes by

tens of thousands of dollars. Worst of all, red tape puts home and

business owners on the hook for paying these unwarranted charges,

and often force them into paying money they don’t owe with threats of

late charges and liens on their property.

With a few simple solutions, the City can ensure New Yorkers don’t

foot the costly bill for the new meter readers’ technical problems and

have a fair process to appeal when a mistake has been made.

Automatic v. Manual Meter Readers

In the winter of 2009, DEP began installing automated meter readers in

all homes and businesses across New York, to replace older ones that

1 Complaints received by the Public Advocate’s office between January 2010 and April 2012.

required physical visits from inspectors. DEP literature emphasized

that the new meters come free of charge, and bring “no change in the

regular billing process.”

The new meters were designed to:

Save the City money by ending physical visits to read a meter;

Electronically send water readings to DEP headquarters;

Improve billing accuracy by eliminating ‘estimated’ readings; and

Allow ratepayers to track their water usage online.

‘Estimated’ vs. ‘Actual’ Readings:

What’s the Difference?

Manual meter readers

required a visit from

DEP in order to

measure water usage

for a home or business

— ‘actual’ readings

were taken when an

inspector physically

visited and read one.

Because inspectors cannot always gain access to a meter during

business hours, the Department relies on ‘estimated’ readings to bill

customers, based on the customer’s water usage in previous billing

cycles. When DEP could not physically read a meter, it simply used the

customer’s last actual reading, carried it over to the current billing

period, and later updated it during the next one. Automated meters

were designed to correct this process, and improve billing accuracy by

eliminating estimated readings altogether.

Inaccurate Readings, Huge Costs

Complaints to the Public Advocate’s office have found the new

automated meter readers prone to significant error; New Yorkers often

saw their bill skyrocket after the installation of a new automated meter.

DEP claims these jumps are the result of leaks or inaccurate old

estimated readings—neither of which can explain why many bills return

to normal after a single sky-high bill. A closer look at the most severe

cases, where a new automated meter resulted in water bills that

doubled in cost, shows why:

DEBUNKED: “Leaky Pipes”

If a pipe leak were responsible for

bill increases, those amounts would

remain consistently high until the

leak was fixed. In the 18 cases

where the DEP blamed a leak for

water bills doubling after an

automated meter was installed, 14

returned to the normal billing

amount after one cycle — even

though no repairs were made. In

only one of these cases was a leak

discovered.

DEBUNKED: “Old Estimates

Were Too Low”

DEP told 18 customers their one-

time sky-high bill was the result of

old estimated readings that were too low, meaning customers owed the

City for past water usage. If that were the case, the new actual

readings should be consistently higher than old estimated ones. But in

half (9) of the cases where DEP blamed big increases on past-

underestimates, the new actual readings were equal to or less than

previous estimated amounts*.

*In the remaining 9 cases, the Office of the Public Advocate was unable to verify an increase in the new actual readings.

CASE STUDY:

The $53,000 Water Bill

Prior to August 2010, the

immigrant owner of a small

laundromat in Sheepshead Bay

typically paid $5,000 for water

bills every three months. But

after a new automated meter was

installed, her bill skyrocketed to

$53,000. When the owner

appealed, the DEP contended a

leak was responsible for the

increase.

After six months without action

and a second bill for more than

$50,000 from the DEP, the owner contacted the Office of the Public

Advocate. With additional pressure and photo evidence, the DEP

acknowledged a technical problem with the new meter, which had

added an extra ‘0’ at the end of its measurement. The $100,000 in

unwarranted charges were finally corrected.

Unclear Bills & Unfair Appeals

Customer bills like the one pictured below bring confusion by displaying

cancellations, billings, and ‘rebillings’ without any explanation. In this

case, a homeowner’s bill shot up from $97 to nearly $2,800 after the

installation of a new meter—with no explanation.

Even when customers know such drastic increases must be mistakes,

and choose to appeal, they are met with a series of bureaucratic

hurdles that stack the odds of favorable resolution firmly against them.

New Yorkers must:

1. File a written complaint with DEP (and wait for a response within 90

days);

2. File an initial appeal with DEP’s Deputy Commissioner, if the

decision is unsatisfactory (and wait for a response within 120

days); then

3. File a final appeal with the Water Board.2

The entire process can take up to eight months, during which

ratepayers are held responsible for the full cost of the bills. DEP

advises New Yorkers “to pay all water and sewer charges during the

Dispute Resolution Process,” even if the bill is unjustified, and warns

that “Late Payment Charges will continue to accrue until all charges are

paid in full.” Homeowners and businesses that do not, or cannot afford

to pay the bill up front face late charges and even a lien on their

property.3

2 Customer Dispute Resolution Process, NYC Department of Environmental Protection. http://www.nyc.gov/html/dep/pdf/water_sewer/dispute_resolution_overview.pdf.

3 A lien is a legal hold placed on a property. http://www.nyc.gov/html/dep/html/customer_services/lienfaq.shtml.

Solutions

With three policy changes, DEP can clarify, simplify and

streamline this process for thousands of New Yorkers.

Public Advocate de Blasio recommends:

1) Eliminate the possibility of technical error before charges are paid.

Whenever a bill goes up by more than 100% after the installation of

an automated meter reader, DEP must immediately dispatch an

agent—at no charge to the ratepayer—to inspect the meter and

rule out the possibility of a malfunction. A quick inspection will

reduce the significant costs to taxpayers of adjudicating an

unjustified bill, and save bill-payers a needless months-long

appeals process if a technical or billing error is to blame.

2) Don’t bully customers into paying charges they don’t owe. To

ensure New Yorkers have a fair shot at challenging their bills

following the installation of an automated meter, the City should not

assess late fees or threaten a lien on a property during the appeals

process.

3) Put water bills in plain easy to understand language. New charges

assessed after an automated meter reader is installed should be

clearly labeled. The DEP should replace the confusing

“cancellations” and “rebillings” with easy to understand language

that explains why past bills are being revised.

Office of New York City Public Advocate Bill de Blasio | (212) 669-7200

1 Centre Street, 15th Flr, NY, NY 10007 | www.advocate.nyc.gov