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PSC Releases NYSEG Audit

In a recent audit released by the New York Public Service Commission (PSC), auditors identified management, security and operations issues with Rochester Gas and Electric Corp. (RG&E) and New York State Electric & Gas Corp. (NYSEG), the primary electric and gas provider for Tompkins County residents.

The audit was commissioned in September 2023, and PSC released its findings last month. NorthStar Consulting Group, a third party auditor, made 128 recommendations to Avangrid, the holding company of NYSEG and RG&E.




The recommendations require NYSEG and RG&E to file implementation plans within 30 days after May 19. In a release, PSC said a staff review of “information concerning the utilities’ recent operations” sparked the Department of Public Service to issue a notice of apparent violations (NOAV) to the companies.

NYSEG serves nearly 1 million electricity customers and over 270,000 natural gas customers across upstate New York. Recently, Tompkins County legislators and Rep. Josh Riley (NY-19) have called for independent audits of NYSEG billing practices after receiving complaints of skyrocketing NYSEG bills from constituents.

The most recent audit released by the PSC is separate from these calls for investigation, although in its NOAV, the Department of Public Service alleges violations concerning the maintenance of customer billing records and billing procedures.

“The scope of this audit focused on ways to provide value to NYSEG’s and RG&E’s customers, while also reviewing core utility operations,” said PSC Chair Rory M. Christian. “Department staff also identified certain audit findings and other information that certain company practices may be violations of Commission regulations or orders; the companies will now have an opportunity to respond to Staff’s contentions.”

The NOAV also alleged conflicts of interest on NYSEG’s and RG&E’s boards, noting that some of their directors also serve as officers or directors of unregulated affiliate companies.

Several of the issues identified in the audit stemmed from the corporate structure of Avangrid’s ownership of NYSEG and RG&E. The audit claimed that there is limited transparency with funding allocations because the two companies receive goods and services from 13 corporate affiliates.

The audit found that incentive payouts for company executives are “subjective.” Because Avangrid doesn't develop operational plans tied to company performance goals, incentives aren't based on actual goal achievement. The auditor recommended a third-party review of the NYSEG and RG&E CEO performance.

Security was also a concern of the audit. Despite cost increases, Avangrid’s cyber security program “is not maturing as it should,” according to the PSC’s release. The auditor recommended improving cyber security and better oversight on security performance metrics.

In its 2023 Electric Reliability Performance Report, the Department of Public Services reported that although NYSEG significantly decreased its outage frequency compared to previous years, it had the most frequent outages among the state’s electric service providers.
NorthStar Consulting Group said NYSEG’s poor reliability was exacerbated by Avangrid’s underspending on asset management. The audit said NYSEG’s asset management system, which uses spreadsheets for tracking, is outdated.

Avangrid’s customer service performance reports have also been inaccurate, according to the audit. The auditor found that the company doesn’t have strong systems in place to manage customer service outsourcing and recommended that Avangrid find the cause of its increasing call center costs.

NYSEG will now have to respond to alleged violations contained in the NOAV and their implementation plan to address concerns cited by
- Maddy Vogel, Ithaca Times 6/16/25