Last October nearly 1,000 utility industry professionals from 100 companies descended on the Grand Hyatt hotel in San Antonio, Texas, for a three-day software conference.

Donna McNally, a veteran information technology director for Central Maine Power Co., was there to tout her company’s new customer billing system. In a presentation, she told the audience how CMP’s new software, launched exactly one year earlier, increased billing accuracy and “enhanced customer experience.”

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What she didn’t tell them was that 2,000 miles away, back home in Maine, more than 100,000 customers had been receiving inaccurate and, for many, outrageously expensive power bills. Or that many residential and commercial electric customers never received any bills at all — until they were caught off guard and alarmed by shutoff notices. Or that CMP was now the target of multiple state investigations, plus a ratepayer lawsuit alleging corporate fraud over how the company mismanaged the bungled billing system.

The Texas presentation was neither the first time, nor would it be the last, that CMP management misrepresented the customer service disaster that shattered the reputation of Maine’s largest utility. In late March of this year, CMP’s chief executive told the Maine Public Utilities Commission that the billing problems were largely solved. But even now, customers continue to complain to the agency about unexplained high bills and their ongoing frustration with trying to get answers from CMP.

A Portland Press Herald/Maine Sunday Telegram investigation has found that officials at Central Maine Power and its parent company cut corners, skirted best industry practices and failed to adequately test a new error-prone billing system launched in the fall of 2017.

The meltdown of the new $56 million billing system, paradoxically named SmartCare, reveals a pattern of corporate mismanagement and unfulfilled customer promises spanning much of this decade.

The newspaper’s examination of documents, testimony, emails and interviews reveals:

• Managers skipped critical tests and rushed through others that would have alerted officials that the system was not ready to launch.

• The origins of the fiasco date back to 2010, when the company installed a taxpayer- and ratepayer-financed smart meter system that promised customer savings. But nine years later, the most significant savings have only benefited the company after it laid off 85 meter readers.

• A poorly timed corporate employee buyout and reduction of customer service positions left CMP understaffed at crucial times.

• Top management at Avangrid, CMP’s domestic parent company, was focused on shepherding a yet-to-be-approved billion-dollar power line project through Maine and downplayed problems with the troubled billing system.

• The company also downplayed the scope of the problem in comments to the Public Utilities Commission, the body that regulates CMP; stock analysts; and the public.

As PUC probes continue, tensions will be high next month when the agency holds three public hearings. They are scheduled for July 16, 18 and 22 in Portland, Farmington and Hallowell, respectively.

For its part, CMP is defending its rollout of SmartCare. It is emphasizing that the investigations are ongoing and that it’s premature to draw any conclusions.

QUESTIONS, NO ANSWERS

For customers, the bad news began in the fall of 2017, after the company switched over from an aging, data management system.

Within days, customers were receiving erroneous bills. Soon, 97,000 of the company’s roughly 620,000 customers were sent bills at least 50 percent higher than for the same three-month period a year earlier. Many residential and commercial ratepayers got no bills at all – and were shocked when the eventual balance became more than they could afford.

A violent storm on Oct. 30 – the same day as the cutover to the new billing system – led to record power outages, followed by a brutal, early-winter cold spell that coincided with a double-digit jump in electricity supply prices. These events conspired to magnify problems and confound efforts to find the root cause of the high bills. In all, 59 distinct types of billing errors affecting more than 100,000 customers were discovered, according to the PUC.

The company was fast to blame the cold weather and the energy-supply rate increase, not the new computer system. CMP also blamed its customers, many who resorted to desperate measures to lower their electric bills after hearing unconvincing explanations from the power company.

A review of the nearly 500 complaints to the PUC paints an embarrassing picture of how the power company handled its customers’ inquiries.

CMP first would tell angry customers it was likely the weather’s fault, or a faulty appliance, or dated electrical wiring in the house. But if a customer could refute these explanations, the excuses got more creative, ranging from electrical theft to excessive showering to teens addicted to video games.

“They gave me this whole song and dance, starting off with my appliances and then getting more and more weird,” said Rob DuPaul, a Sanford contractor who called about huge spikes in his home’s monthly bill, including one $1,500-a-month charge.

“They asked me if I had started running a business out of my home, or if somebody might be stealing electricity from me,” DuPaul said. “My answers were all no, no, no. I think they just wanted me to give up and pay, but I can’t. I shouldn’t have to go broke paying for something that ain’t right.”

Faced with unusually high bills, some frustrated CMP customers took drastic action, such as moving all their cooking outside, even in winter, or spending their summers living in a small camper, or not putting up lights on their Christmas tree, or showering with a garden hose.

Shanon Dixon, 54, of Waterville took extreme steps after her monthly electric bill more than doubled in early 2018, topping out at $300 a month. The family now light their home with solar lamps. They closed their pool. They don’t flush the toilet after they urinate and have stopped using their home shower.

“The lamps, a state park pass instead of the pool, I’ll keep doing those things even after they figure out what’s up with our bills,” Dixon said. “The flushing the toilet, though, and taking the girls to shower at the Boys & Girls Club when they have a function, that’s more than we should have to do.”

A MATTER OF TRUST

For many Mainers, the nightmare continues as state investigators try to determine why the billing mess happened, who’s responsible and who should pay.

A $400,000 audit couldn’t definitively answer those questions. It criticized the company’s management, but concluded that the new billing and metering system was not at fault.

That explanation didn’t satisfy thousands of CMP customers. Nearly 8,000 have joined a Facebook opposition group, CMP Ratepayers Unite.

More than 600 customers have joined a lawsuit seeking class action status. A bill that would seize CMP’s assets and turn the company into a consumer-owned utility will be studied by PUC staff for consideration in the next legislative session.

Related Smart meter swap promised savings that never came

In the court of public opinion, CMP is battling to restore its reputation while still downplaying its culpability.

“We’re probably the most mistrusted company now,” said CEO Doug Herling in an August 2018 interview.

He blamed social media, news coverage, suspicion of CMP’s foreign ownership and opposition to company initiatives as primary reasons for that mistrust.

Customers disagree.

“CMP should be ripped upside down ASAP,” says Michael Harvey of Winthrop. “I have totally lost all trust and confidence in them. I’m getting bills higher than a mortgage.”

The 39-year-old owner of a small cleaning company reports that he’s received monthly bills as high as $1,400 to power his 1,100-square-foot home. His April bill was $900.

As the investigation at the Maine Public Utilities Commission nears its eighth month, the total number of customers affected by incorrect bills remains unclear. By CMP’s own accounting, there were 100,832 inaccurate customer bills from November 2017 through April 2019.

But the number is likely to be higher. The 97,000 customers who received extraordinarily high bills in early 2018 were not cross-referenced with the spreadsheet of inaccurate bills. Nor were the accounts that didn’t receive bills for months, then got hit with a huge balance owed. The bulk of the bad bills occurred in the six months immediately following the launch.

SMART METERS, OR NOT

CMP’s billing troubles actually began a decade ago when it performed a different technology upgrade – the rollout of 625,000 digital smart meters between 2010 and 2012.

Aided by a $96 million federal grant, CMP swapped out old analog meters for new digital models. It promised customers that the technology would eventually allow them to monitor electricity use in their homes in real time, offering the potential to lower monthly bills.

But smart meters can’t meet their full potential unless they pass off detailed usage information to a modern billing system. CMP’s previous billing system was antiquated – dating back to the 1970s.

Without that system, the ability of customers to interact with their smart meters to lower their bills was delayed. Documents show that CMP’s project managers had missed deadlines for years, before rolling out the new billing system.

Nearly a decade later, that potential is largely unrealized, mostly because a competitive electricity marketplace that had been anticipated for home customers has failed to develop in Maine.

Smart meters have produced some savings, but the bulk of them went primarily to the company. CMP has been able to cut 2 million miles a year of driving. It also laid off 85 employees who read the meters, a savings of about $8 million.

‘PEOPLE WANT ANSWERS’

When inaccurate bills started showing up in the fall of 2017, some customers blamed the smart meters. While some deficiencies were found, most of the attention by state regulators and consumer advocates is focused now on the actual billing system.

Company officials insist they followed best industry practices in rolling out SmartCare. In early May, McNally testified at the PUC that CMP “carefully, methodically and effectively” carried out the project.

The company also disputes key evidence about testing deficiencies, gathered by a PUC-hired auditor, Liberty Consulting Group, a utilities consultant.

“Analyzing CMP’s IT project management of SmartCare was not within the scope of the investigation of the Liberty consulting team,” CMP spokeswoman Catharine Hartnett said.

But last week, Liberty Consulting stood by its conclusions and said McNally’s testimony inaccurately portrayed its review. Contrary to what McNally alleged, Liberty said it conducted a detailed assessment of the SmartCare rollout through interviews with CMP managers and examination of thousands of pages of documents.

The contention that the project’s outcome was effective defies reason, since there’s ample evidence that CMP and Avangrid officials cut corners and failed to adequately test the new billing system as they raced to meet a long-delayed deadline.

The Liberty audit found that the company skipped 13 weeks of testing – a charge CMP denies – and failed to fix roughly 100 system defects by Oct. 29, on the eve of the launch.

To Maine’s utilities watchdog, the answer to whether CMP acted appropriately is clear.

“It’s hard to believe all those protocols were followed,” said Barry Hobbins, Maine’s Public Advocate, whose office is conducting its own $250,000 probe.

“It’s just baffling to me that they followed all those practices and procedures. We wouldn’t be having this protracted, litigated debate if they had acted in a prudent manner.”

He faults the PUC for not being more aggressive in trying to uncover the root causes in a way that will satisfy customers.

“People want answers,” Hobbins said. “That’s the problem. We haven’t had answers and it’s very frustrating.”

One top executive who may have insight into problems preceding the launch is Sara Burns, CMP’s former president and chief executive. She retired at the end of 2017, just as customer complaints were ramping up, although she remains on the Avangrid board.

Reached by phone in early June, Burns said she’d rather not answer any questions because she’s no longer the head of CMP.

“It puts me in a very uncomfortable position,” she said. “I don’t think it’s the right thing to do.”

PROMISING START, MULTIPLE DELAYS, THEN A RUSH TO THE END

For its new billing system, CMP chose to go with SAP, a German global-software company with products and services used across the utility industry. It was a SAP-related group that organized the Texas conference. CMP’s Spanish parent company, Iberdrola USA, and its affiliates were already running a number of SAP-based applications, and an experienced support team was located at CMP’s headquarters in Augusta.

Company officials filed their initial request for PUC approval in February 2015. Executives told the regulators that it would take 19 to 22 months following PUC approval to bring the new billing system online. Their target was June 2017.

But they missed the mark. Several times.

By the time the system actually launched – despite assurances the project was on track – the company was facing a $1.5 million penalty for excessive delays from the PUC.

Corporate pressures to push the button were beginning to grow.

What began as a slow, methodical approach to a complex project eventually turned into a rush for the finish line, leaving some executives troubled by what could go wrong.

Things seemed to be going well until January 2017. Then a quarterly report from CMP vice-president Eric Stinneford simultaneously indicated the project was both on schedule and required a delay. There was concern that the billing system would launch just as a rate hike took effect in the summer of 2017.

“Status Summary: …Overall, the project is on schedule and projected to be completed within budget.”

And then, in the same document: “Given this scheduling conflict [with the rate hike] and its undesirable implications, the company determined that the best course of action is to …defer the project…”

A conflict over moving some data from the old to the new system required the cutover date to be pushed back from June to August. Various tests were completed, ongoing or planned, the company said.

But even that assessment turned out to be optimistic.

Starting in early 2017, CMP delayed the launch of SmartCare at least three more times, from unspecified dates in June or July of 2017, to August, and then to a specific day, Sept. 5, 2017.

On May 3, 2017, the PUC staff, as well as managers from CMP, Avangrid and the Office of Public Advocate, met to review the progress.

McNally outlined some reasons for the delay and rising costs. One was hardware. Another was labor. More people were working longer hours than anticipated.

But the project, she said, was now on its critical path, industry jargon for the technical steps to bring a project to fruition. She then outlined the various test cycles, the “dress rehearsal” for a process that would take three weeks.

Chuck Cohen, the PUC hearing examiner, then asked McNally: “So what could go wrong between now….”

McNally replied: “I don’t think we know. I don’t want to be flippant. I mean, as you can imagine, there’s a lot of moving parts.”

One of the biggest moving parts, McNally told the PUC, was training. That meant getting both CMP employees and as many as 30 external partners and vendors in different places and time zones to work together on the new system.

“There are several months of training on the system that needs to happen,” McNally said.

Integration testing is complicated, McNally explained. To test complete business transactions, such as a customer moving in or out, CMP developed specific scenarios for call center representatives. For one test cycle, workers developed 47 scenarios, but those involved 1,448 individual tasks, according to CMP.

She later added: “You know, our No. 1 priority is we want to get it right.”

PRESSURE TO LAUNCH

Completing a project of such complexity is a finely tuned choreography of disparate systems, schedules, software, data, hardware, employees and, in this case, vendors across the globe. And, of course, testing. But with financial penalties mounting and corporate pressures growing, CMP was running out of time to complete the testing and launch the system.

“The approach changed from the more cautious intended approach of ensuring completion of planned tests, to one that allowed only such testing as fit into the ever-compressed time remaining before the end of October 2017, and as the remaining budget permitted,” according to the Liberty audit.

Top executives became keenly focused on the launch date. As summer approached, managers set yet another final target: Oct. 30, 2017.

According to PUC testimony from project director McNally, the CMP steering committee reviewed “Go-Live” readiness scorecards and checklists on Oct. 20 and Oct. 27. She said they were satisfied the project was on track. It approved moving ahead to Go-Live at the latter meeting.

But according to one executive who took part in depa­­­rtment head meetings in CMP’s board room with former CEO Burns, the group was feeling pressure from higher-ups at Iberdrola to finish testing and launch the new billing system. They worried about facing further financial penalties at the PUC.

“Most of the discussion was on timeline,” the former employee said. “I think it was because the company had requested so many extensions from the commission.”

The executive asked not to be identified because the person still works in the industry and fears retribution from the company.

HURRY UP AND GET IT RIGHT

But executives at parent company Iberdrola shared another worry: Scottish Power.

Scottish Power is an Iberdrola subsidiary that launched a new IT system in 2014, similar to the SAP system bought by CMP. It led to more complaints than any energy supplier in the United Kingdom had ever seen, from customers who didn’t receive bills, got incorrect ones or were charged for late payments.

“There was pressure from Iberdrola for CMP not to repeat Scottish Power’s mess,” the former executive said. “In meetings, it was brought up a lot. Representatives from Iberdrola were telling upper managers at CMP and Avangrid, ‘Don’t let this happen again.’ ”

But it did happen.

Unlike CMP, whose officials continue to deny that they mishandled their project, Scottish Power executives admitted blame and were effusive with their apologies to customers:

“We are sorry about this. It is our fault and that is why we have committed that no customer will be left out of pocket from our mistakes,” wrote Scottish Power CEO Neil Clitheroe in a public statement.

In April 2018, CMP finally apologized for the way it responded to customer complaints, but it didn’t take responsibility for the underlying causes of the problem.

At the Texas conference, McNally showed a slide heralding the company’s top rating for customer service by J.D. Power, the global marketing company, when in fact the utility ranked 12th out of 17 in New England among utilities in its size category.

Hartnett, the CMP spokeswoman, sought to clarify McNally’s Texas presentation, which was headlined: “Year of Progress: Exploring strategy, results and lesson learned…” The talk, she said, was meant to be a project management case study that outlined a series of goals, rather than actual accomplishments.

FROM 30 to 17 WEEKS OF TESTING

The rush to get it done and the warning to get it right left some members of the launch team feeling frustrated. They include two key managers who had concerns about the Oct. 30 launch date and felt the project was being rushed with insufficient testing, the same former executive told the Portland Press Herald.

“I think the company felt that they had so many delays, they had to meet that final deadline,” the former employee said.

Even as regulators were being assured the project was on track on May 3, 2017, managers already were cutting corners, according to the audit done for the PUC.

Scrambling to go live, managers omitted some testing over the spring and summer, according to Liberty, rushing through protocols meant to detect and fix problems prior to launch. In some cases, they simply skipped over key steps in an effort to stay within budget and hit the Oct. 30 launch date.

Project managers, for instance, had initially planned 30 weeks of testing. They only conducted 17 weeks, with some test phases overlapping.

This deviation from best practices was detailed by Liberty, which found multiple lapses leading up to the launch:

“CMP management held to a planned go-live date of October 30, 2017 by compressing its planned timelines and overlapping critical testing phases. The approach changed from the more cautious intended approach of ensuring completion of planned tests, to one that allowed only such testing as fit into the ever-compressed time remaining before the end of October 2017, and as the remaining budget permitted.”

Liberty’s report highlighted several examples, including this one: Three dress rehearsals were planned to be conducted a month before going live. Only one took place, two weeks before the cutover.

Liberty also expressed the view that one of the testing procedures CMP/Avangrid chose was outside best industry practices. It then noted that even that test, called Parallel Bill Testing, wasn’t fully completed. The test essentially runs the old system against the new one.

“CMP both used an approach that did not test all functionality and it then ran out of time to do further testing of the kind it selected,” the audit said.

CMP has challenged Liberty’s central conclusions. In her testimony last month, McNally said that the Liberty audit was designed to focus on meter and billing accuracy, and that its examination of SmartCare was brief and ignored tens of thousands of pages of documentation. For example, McNally said testing that was planned for 38 weeks actually ran 79 weeks, because certain test cycles overlapped.

BAD TIMING

Whether CMP had enough workers, and the right workers for the job, also is in dispute.

Managers were juggling work from 32 vendors across the globe. This added a layer of complexity that contributed to delays, as well as the need to schedule tests later than initially planned.

Liberty noted: “The SmartCare project involved many personnel, performing in a mix of internal and external resources working from six geographic areas (Augusta, New York, Connecticut, Spain, India & Portugal). The number of groups and locations and their geographical dispersion exceeds the norm for this type of project, and complicated efforts to integrate and advance work.”

CMP did try to address this issue by moving key information technology, software and allied team members to Augusta. But as the project timeline slipped, CMP was forced to call back 10 employees who had taken buyouts. They had key knowledge of the old and new billing systems.

CMP managers also were challenged to get all the vendors to develop and deliver their products and services around the changing schedule. That contributed to the decisions to delay the project.

McNally, however, testified that staffing was adequate and that having workers in six geographic areas was actually an asset, because it extends the workday across time zones.

WHO MADE THE DECISION TO LAUNCH?

At the heart of the investigation are the questions of who gave the go-ahead to launch the system on Oct. 30, and whether that decision was justified.

The audit report identifies a sign-off protocol for going live with SAP Networks. It required input from the project team and its steering committee.

Whether regulators find that CMP management acted appropriately in launching the system will determine if customers or shareholders bear the financial consequences. If the PUC finds that CMP acted imprudently and failed to provide “safe, reasonable and adequate utility service,” affected customers could receive refunds. The agency also could issue a financial penalty or lower company earnings.

Liberty discovered several problems in the days leading up to the launch.

CMP’s sign-off status report found no open defects ranked critical or high. There were a number of medium-ranked defects, but they had agreed-upon workarounds. But using CMP’s own data, Liberty reached a different conclusion: It found that the day before going live, roughly 35 high-ranked defects and 100 medium-ranked defects had been identified. Auditors, however, were unable to determine the precise number at the Oct. 30 go-live date.

The Liberty audit also found confusion and discrepancies among three status reports that CMP used to track the project’s progress.

“Management minimized or failed to recognize the severity of defects raised before launching the CIS (Customer Information System). Conflicting information in status reports, readiness reports and the master list of defects demonstrates a lack of recognition of the magnitude of the issues existing.”

Equally troubling, the audit found that CMP’s status report didn’t include various cautions and red flags identified by a third-party expert hired by CMP, called a system integrator. The firm, Deloitte Consulting, is a global management company that helped code and test the technology.

McNally has challenged Liberty’s assessment. She testified that the steering committee found no issues a few days before going live.

She said that all key indicators on the Go-Live Dashboard were green. She said a readiness checklist was presented to the steering committee for approval and documented in minutes. But those minutes aren’t presented in the publicly available evidence.

MANAGEMENT FAILURES

It’s common for issues to crop up after switching data management systems. But in Liberty’s assessment, CMP hadn’t devoted enough time and resources to fix defects with what the industry calls a post-go-live plan.

The inadequate post-go-live plan revealed itself in the customer service area, where workers were overwhelmed with customer complaints.

Corporate cost-cutting had left it with too few customer service workers to handle the flood of calls. Information filed at the PUC for June 2018 shows 11 voluntary resignations and 18 retirements but only one new hire. Overall, CMP’s total full-time head count went from 913 in 2013 to 808 last June.

CMP is beefing up the customer service ranks again, with 28 hires planned or in progress. It plans to add 75 new workers by June 2020, documents show.

PROBLEMS CONTINUE

In recent months, CMP and Avangrid have attempted to move on. Findings in the Liberty audit that suggested the smart meters are, overall, producing accurate bills gave the utility some degree of comfort.

On April 30, CMP’s president and chief executive, Doug Herling, sent a letter to the Maine PUC, saying the backlog of delayed bills is completely cleared.

Customer complaints still come in to the PUC’s consumer division, but the volume has tapered to what Herling described as a “steady state.”

But even now, as summer approaches, problems remain. A new wave of 19 complaints filed at the PUC between June 1-17 from disgruntled customers indicates that many people are still struggling with bills they can’t explain and questions they can’t get answered.

Regulators are sure to hear from such customers next month at the upcoming public hearings.

CMP would like to put the billing problems behind it because the company has another pressing concern: Gaining approvals for a $1 billion transmission line called New England Clean Energy Connect that would run through western Maine to supply Canadian hydropower to Massachusetts.

“The power line project was all-consuming,” said the former executive, who took part in CMP department head meetings. “There was a lack of management attention to billing. But you’re going to make millions each year (from building the project), and the billing system doesn’t make you that kind of money.”

DOWNPLAYING PROBLEMS

This sense is borne out in earnings calls with analysts who follow Avangrid’s publicly traded stock. During one call last winter to review fourth-quarter earnings, Avangrid’s executives highlighted progress on the power line project and an ongoing rate case. They downplayed the billing problem and the PUC’s investigation, following an exchange with Julien Patrick Dumoulin-Smith, an analyst with Bank of America, Merrill Lynch.

To close off the discussion, Douglas K. Stuver, Avangrid’s senior vice president and chief financial officer, conveyed the impression that inaccurate billing was a non-issue:

“I mean, our focus, Julien, in Maine is strictly on a couple of things right now. So one, obviously, is serving the company, meeting the customer expectations … It’s on getting the approvals for NECEC, and it’s on getting through the rate case and the outstanding review of the billing system and getting customers some assurance that they are effective and accurate in terms of the bills that are being produced, which has been shown now by two different audits.”

“But to be very frank, there are still people that don’t believe that, and so, as Jim said, (James P. Torgerson, Avangrid’s CEO) the commission is going to investigate it further and do an audit of the audit, if you would, to just make completely sure that the system is operating as designed.”

But customers say they can’t afford to wait any longer. They live in fear as their contested, overdue bills continue to mount and face embarrassing, aggressive collection calls and notices urging them to agree to onerous repayment plans to avoid disconnection.

Last year, Michelle Knight of Old Orchard Beach got five electricity bills, all of which were ridiculously high, and three disconnect notices in the month before Christmas. She said she has lost all trust in the utility and would like to sue them for theft and mental anguish.

“I am a loyal, paying customer but I am being treated as trash,” said Knight in her complaint to the PUC. “This has gone on far too long and if something is not done, it will destroy many family budgets and force them to decide whether to pay the mortgage or the electric bill. We can’t take this anymore.”

Staff Writer Penelope Overton contributed to this article.

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