Friday, September 26, 2008

State Utility Assistance is Not a "One-Shot Deal"

State Emergency Utility Assistance for Customers Who Cannot Pay Utility Bills.
Last week, PULP received a call from a Con Edison customer living in the Bronx. Her electric service had been terminated the week before for nonpayment of spiking electricity bills. The customer, a multiply disabled recipient of SSI assistance, had no defense to the termination of service, and simply lacked funds to pay the charges.

The food in her refrigerator had spoiled, she was unable to cook, and she was using candles to light her apartment

She applied for emergency utility assistance from New York City Human Resources Administration (HRA) for a grant to restore her utility service. Under Section 131-s of the New York Social Services Law, local social services districts are required to make a payment to a utility when necessary to preserve or restore utility service to a recipient of public assistance. She filled out an application, but was denied.

The So-Called "One-Shot" Deal
The HRA worker told the customer she was ineligible because she had received a grant eight months previously and utility assistance could not be provided more than once a year -- it was a “one-shot deal.”

The SSI recipient was not given a written denial notice stating the factual or legal basis for the denial and was not advised of her right to appeal to the state OTDA through its “Fair Hearing” process.

In fact, there is no “one-shot deal” in the Section 131-s utility assistance program.

The SSI recipient was clearly eligible for a grant from HRA under Social Services Law Section 131-s. We surmise that the HRA worker may have been confused about programs in which federal reimbursement had been limited to one emergency per year. The availability of federal or state reimbursement, however, has no bearing at all on the statutory duty placed on local officials by Section 131-s to resolve a utility shutoff emergency with a payment to the utility of an amount equal to the most recent four months bills.

Waiting for HEAP is Dangerous
It seems that every year, at this time of year, we hear of cases where desperate utility customers are denied emergency benefits to maintain or restore service without adequate notice for bogus and palpably wrong reasons. Are local welfare departments trying to defer assistance to resolve energy emergencies until after November 3, when the HEAP program -- which has full federal reimbursement -- begins? If so, they are
  • disregarding statutory duties adopted in 1981 to coordinate the state utility assistance program with the Home Energy Fair Practices Act
  • frustrating the state’s policy that residential utility service should be provided continuously to promote the public health and welfare, and
  • playing with fire.
See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households.

The "Fair Hearing" Remedy
Normally, if adequate denial notices are provided, applicants denied utility assistance can access the state OTDA informal “Fair Hearing” process and obtain a review of the assistance denial, without a lawyer. Even though it may take time to get a hearing and decision afterwards, simply requesting a state hearing can trigger a supervisory review at the local welfare office, and this can result in correction of a mistake even before the hearing is scheduled, when the agency cannot defend its action or inaction.

In this case, where the state hearing process had been circumvented by the failure to provide adequate and timely notice of the assistance denial, PULP notified an official of the state OTDA who intervened swiftly to ask HRA to review the situation. HRA reversed the denial of assistance, notified Con Edison that a grant would be provided, and Con Edison promptly restored service, as it is required to do under Public Service Law 65-b. HRA also provided a restaurant allowance to the customer to defray the added costs due to the loss of electric service and food spoilage.

Systemic Problems
Beyond the mistaken denial of aid that was corrected on an individual basis, this case illustrates problems that need to be addressed by the PSC and OTDA:
  • The New York PSC has established electric rates that simply are not affordable to many SSI recipient customers. Con Edison's PSC-approved rates allow only a meager $5.92 per month discount to low income customers, in contrast to the 20% reduction in rates that California has for its low income utility customers. See A Well Kept Secret: Con Edison's Low Income Rate.
  • The PSC encouraged Con Edison to introduce volatile electricity prices that create hardship for the poor. Customers living on tight budgets need to be able to predict their expenses. The lack savings to absorb price shocks and their incomes do not fluctuate with the NYISO spot market prices, which Con Edison pays for too large a portion of its energy supply. See Excelsior! Excelsior! Con Edison Rates Peak Again: Bills Up 30% Since May.
  • The PSC should revise utility incentives that favor disconnection of service as a bill collection tactic. Con Edison's disconnection and reconnection of the SSI recipient in this case, who was entitled to utility assistance to prevent a termination, imposed many costs that could have been avoided with a wiser and safer approach. Just as the PSC sets targets and imposes sanctions when there are too many outages due to equipment failures, etc., the PSC should set targets for Con Edison and other utilities to reduce the number of deliberate service terminations. This can be achieved through more enlightened customer service and customer education, and would further the policy of safe, continuous service. See The Gas Company as Social Worker; Brooklyn Utility Tries Softer Approach to Pursue Unpaid Bills.
  • Local social services offices need more OTDA oversight. Mistakes of the sort illustrated by this case are far too frequent. Simply correcting individual errors when brought to light is not a substitute for stronger supervision and administration of the state's utility assistance programs.
With even greater energy burdens anticipated in the coming winter, it is time for the PSC and OTDA to take action to protect New York's vulnerable low-income utility and energy consumers.


stella said...

I had this problem today. Con Edison is going to shut off my power unless I pay them $215 immediately, even though I am unemployed, on food stamps AND had been making monthly installments payments on the past-due balance. A couple times the payments were late but they were made. I'm prepared to make my installment payment today but they won't accept it because I was late a couple times before. I already received a $50 "one-shot" assistance several months ago. This is an outrage given that I'm prepared to continue making the installments but cannot due to a technicality. They are called "Con" Edison for a reason.

Gerry Norlander said...

The Public Service Commission Hotline has power to assist in working out this problem without termination of service.

The PSC Hotline number is 1.800.342.3355.