Wednesday, March 19, 2008

PSC Nullifies National Grid's $1,000 "Grand Plan" Requirement for Utility Service

In October, 2007 applicants for utility service represented by PULP who had been denied service under Niagara Mohawk d/b/a/ National Grid's $1,000 "Grand Plan" requirement for utility service, and whose requests for help from the Department of Public Service Consumer Services Division Hotline (1-800-342-3355) had been denied, petitioned the Public Service Commission for a Declaratory Ruling that the National Grid "Grand Plan" is invalid.

On March 19, 2008, the PSC announced it is nullifying the $1,000 requirement. See National Grid's `One Grand Demand' Struck Down, Schenectady Daily Gazette, March 20, 2008; NY Regulator: National Grid Must Be More Lenient on Payment Plans, AP, March 19, 2008.

The petitioners and seventeen other denied applicants who moved to intervene in the case typically had arrears for service to prior accounts that had been closed years ago. National Grid made no attempt to collect the arrears, but when they applied for service, typically after a change of living arrangements such as moving to a new apartment, Grid withheld service and demanded a down payment of $1,000 as a condition of service. In many of the cases Grid refused substantial payments that were short of the "Grand" demanded.

Grid referred many of the denied applicants to local welfare departments, but they were ineligible for aid because their incomes were slightly above the welfare need standard (which has not been changed for 18 years) and because the emergency utility assistance program will provide grants or loans only to those who have had utility service within the most recent four months (PULP argued that under the Public Service Law applicants should be able to get deferred payment plans for old arrears without welfare assistance).

When the applicants did not have the money demanded by Grid, they and their families went without service, and in some circumstances, experienced homelessness because they could not get the keys to move into their new apartments without demonstrating to the landlord that they had arranged for utility service in their name. As a result of the withholding of service applicants went without utility service, causing hardship and increasing the risks of tragedy. See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households.

The Legislature in 1981 declared the goal of continuous utility service to residential customers in order to promote safety and the general welfare of the state. PULP argued that the Grid "Grand Plan" clashes with specific provisions of the Home Energy Fair Practices Act (HEFPA) which govern the provision of service to applicants who owe money for service to prior, closed accounts.
  • Section 31 requires Grid to offer a repayment plan for "any amounts due" for service to a prior account,
  • Section 31 limits down payments to three months' bills,
  • Section 37 requires that all payment plans must allow for consideration of individual circumstances, fairness, and equity.
Evidence in the case indicated that National Grid had provided "training" sessions to the PSC Consumer Services Division staff on its informal "Grand Plan" requirement. PULP argued that the rule had been adopted by Grid without filing tariffs that can only be adopted after public notice and review by the PSC. Also, persons denied under the "Grand Plan" did not receive proper notice of the reasons for denial and of their opportunity to seek review of the denial by the Public Service Commission.The case is discussed in our prior postings on the "Grand Plan":
A PSC press release announcing nullification of the "Grand Plan" issued March 19 states:
"One of our most important roles is to safeguard and protect ratepayers, in particular consumers who are financially less fortunate or have fallen on hard times,” said Commission Chairman Garry Brown. “National Grid’s practice in this matter regarding residential applicants who are in default does not conform with the intent of Commission regulations.”
The order has not yet been released. For further information, contact PULP at 1-800-255-PULP, or by email at

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