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AII-1002-48173
ConfirmedA court, a regulator or the organization itself has stated the core facts, or the record cites a court or regulator source.

Portland Water Bureau AI Algorithm Offers 40% Discount to Wealthy CEO in Pilot

The Portland Water Bureau's machine learning algorithm, developed by SERVUS to identify utility customers eligible for discounts, reportedly selected Columbia Sportswear CEO Timothy Boyle—one of the city's wealthiest residents and largest water consumers—to receive a 40% bill discount in a pilot program intended to help low-income customers.

14 October 2024 · SERVUS · Discrimination and fairness
14 October 2024
AII-1002-48173View source ↗
Quick facts
Category
Discrimination and fairness
Country
United States
Source
wweek.com
Date
14 October 2024
Drafted by
Raidu Incident Detection

What happened

The Portland Water Bureau contracted with SERVUS in February to use machine learning to distribute discounts to customers who cannot pay bills in full, under a $350,000 contract. The contractor ran pilot programs using randomization software to test whether its algorithm could accurately identify customers' ability to pay.

In October, Columbia Sportswear CEO Timothy Boyle received a letter from the Water Bureau offering him a 40% discount on his water bill as part of the first 90-day pilot test. Boyle earned more than $1.6 million in compensation the prior year, held Columbia shares worth more than $1.7 billion, and was the ninth-largest residential water consumer in the city in 2021, using more than 770,000 gallons annually.

Reported impact

Boyle was offered a utility discount intended for customers who fall behind on bills and cannot pay in full, despite being among the city's wealthiest residents and highest water consumers.

Index analysis

The Water Bureau's $10 million customer assistance program has been means-tested since 1995 but has never reached its annual goal of helping 10,000 customers, assisting at most 8,500 per year. The bureau intended the algorithm to identify eligible customers who had not sought discounts due to lack of awareness or discomfort sharing income information.

Governance controls

The City Council approved the $350,000 SERVUS contract in February, and the machine learning pilot covered randomized selection of customers for one 90-day billing period, with no guarantee of selection in a second round or long-term discounts.

Classification

Category
Discrimination and fairness
Industry
Energy, raw materials and utilities
Country
United States
Harm status
Actual harm
Intent
Unintentional
Timing
Post-deployment
Harm types
Reputational, Economic or property
Harmed
Consumers
Failure modes
Biased model
AI systems
SERVUS Smart Discount Program

Sources and evidence

This record was researched and written by the Index, based on the following original reporting.

wweek.com
Portland Water Bureau AI Algorithm Offers 40% Discount to Wealthy CEO in Pilot