Tuesday, October 02, 2007

New Barrier to Utility Service: National Grid's "One Grand Demand"

The One Grand Demand
In recent weeks, PULP's Helpline received calls from low income consumers involving denials of utility service by National Grid because they owed money from prior accounts, sometimes closed years ago. National Grid demanded large DPA down payments of as much as $1,000.

In each of the instances we learned of, Grid's "one grand demand" was far beyond the financial means of the applicant. Further, National Grid refused to negotiate the amount of the up front payment demanded for service, even when charitable groups offered assistance that would partially meet the demand.

As a result, households go without electric service. For example
  • A household with a 14 month old infant was without service because they could not meet the demand for $1000
  • A mother with four children was evicted and became homeless when the father halted child support payments. The family was living in a car, and is now in a costly and possibly dangerous motel situation. The mother found an apartment, but is unable to move in because the landlord requires utility service to be on before giving possession. She could not resolve her homeless situation because she could not meet Grid's demand for $1000
  • A senior citizen who receives SSI and who is moving to a different apartment where utilities are not included in rent, who has arrears dating back more than six years, was refused service unless he paid at least $1000, which he does not have.
  • A disabled amputee with seizures was denied service due prior arrears and could not satisfy Grid's inflexible demand for $1000
The Emergency Utility Assistance Program Does Not Cover an Applicant's Old Arrears
National Grid referred the customers to the local welfare office, where they were denied emergency utility assistance.

The utility assistance safety net created in Social Services Law § 131-s provides a grant equal to the past four months service for current customers or those recently terminated. It is not designed to cover old arrears or to use public money when the applicant for service has a remedy under the Public Service Law, i.e., a fair and equitable DPA tailored to one's financial circumstances. See the PULP Help Center web pages on public assistance for utility emergencies and utility Deferred Payment Agreements.

HEFPA Requires Affordable DPAs for Applicants
Before the Home Energy Fair Practices Act (HEFPA) was enacted in 1981, utilities could insist upon full payment of arrears from prior accounts before providing service, even when it was impossible for the customer to pay the entire arrears. See PULP's web page reviewing HEFPA History.

HEFPA changed all that.

The law declares that continuous utility service is in the public interest and necessary for the public health and welfare. HEFPA requires utilities to offer deferred payment agreements (DPAs) to enable applicants for utility service retire old arrears from prior accounts over time with affordable payments. The DPA includes an agreement to pay current bills on time plus installment payments on the arrears. Breach of an existing DPA by a current customer is grounds for termination of service, unless the customer can obtain a new DPA with lower payments based on a change of financial circumstances.

Further, regulations of the Department of Public Service require utilities to negotiate fair and equitable DPAs to as little as nothing down and $10 per month, based on the applicant's financial circumstances. The Department of Public Service also is also required to resolve disputes between utilities and applicants over the terms of a fair and equitable DPA.

The apparent rationale of National Grid to demand the "one grand" up front payment from an applicant for service is a section of HEFPA that allows the utility to terminate service to a current customer who has broken a DPA. National Grid apparently maintains that an applicant, who defaulted on a DPA previously when he or she was a customer, can never get a new DPA. The PSC regulations, however, clearly differentiate between applicants for service and current customers. The cessation of service to a customer for defaulting on an existing DPA does not preclude a DPA for an applicant who has not had service within the past 60 days, and who has not broken an existing DPA. Applicants who were recently terminated for non payment can be required to make a deposit.

National Grid's rigid "one grand demands" amount to a refusal to negotiate a fair and equitable DPA.

A Pattern of Undermining HEFPA Protections
National Grid's "One Grand Demand" is an effort to roll back the effects of HEFPA legislation intended to protect applicants for utility service and the public health and welfare. It is resulting in denial of service contrary to the intent of the legislature when it adopted HEFPA. This is not the first time. Several years ago, National Grid denied service to more than one thousand applicants by demanding deposits in situations not allowed by HEFPA. PULP opposed that move successfully, the PSC did not adopt harsher deposit rules proposed by the utility and DPS staff during the litigation, and Grid was directed by the PSC to take corrective action.

Section 31 of the Public Service Law expressly recognizes that some applicants for service will owe the utility for prior service. The law expressly provides the solution for those who cannot afford to pay arrears in full: a negotiable DPA that is a fair and equitable arrangement based on the customer's ability to pay for old arrears.

National Grid appears to be creating new, unreasonable barriers to utility service to some applicants with old arrears, contrary to the purpose of HEFPA. In addition to family hardship and frustration of the public policy of the state favoring continuous utility service, it is quite possible we will see new tragedies as a result. See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households

Persons denied service by National Grid may call the PSC Hotline at 1-800-342-3355 for assistance in negotiating a fair DPA. In some instances, the staff of the Department of Public Service has supported National Grid in its demands for more money than applicants can afford. If calling the PSC Hotline does not solve the problem applicants denied utility service, they, or their advocates, may call PULP at 1-800-255-7857 for further information.

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