Thursday, October 16, 2008

PSC-Approved Utility Collection Practices Render Family Homeless

A customer of an upstate utility recently contacted PULP with a story illustrating how utility collection practices allowed by the Public Service Commission can result in loss of service and drive a family from their home.

The customer is a divorced mother of two young children who at the time of divorce moved to a place with utilities included. Her former husband, who had customarily paid the utility bill, apparently did not, and arrears of several thousand dollars accrued. The utility bill had been in her name at the former residence. When she again moved to new premises and needed utility service, she signed a payment agreement and made monthly installments to reduce the large arrears balance each month, along with payment of her regular bill.

Last winter she lost her employment and due to a delay in receiving an unemployment check, she called the utility and asked for a few more days to get the regular payment in. The utility refused. When the customer sent in the late payment, the utility considered the payment plan to have been broken by the customer. When a payment plan is broken, PSC rules allow the utility to demand the full balance. In the next bill the utility demanded full payment of all arrears -- several thousand dollars which the customer did not have. The customer could not afford to pay that, and she was referred by the utility to the local department of social services, as it must do in its notice of termination.

The customer received a Regular HEAP payment of $240, which, under vendor agreements negotiated by OTDA with the utilities, obliged the utility to provide service for 30 days.

The utility billed the customer again for payment of all the arrears, which she could not pay. The utility would not enter into a new payment plan based on her financial circumstances. The PSC does not require utilities to offer new plans if a plan has been broken in the past. The utility again referred her to social services, where she received an Emergency HEAP grant of $375.

Under the vendor agreement between OTDA and the utility, the Emergency HEAP payment only obliged the utility to provide service for 30 days, which appears to be at odds with the federal requirement that a state's plan for Emergency HEAP must "resolve" the home energy crisis. The 30 day service commitment only postpones the crisis, particularly in the context of PSC greenlighting of harsh collection practices.

Under past PSC practices, an Emergency HEAP payment was deemed to be a basis for a new deferrred payment agreement, tailored to the customer's financial circumstances, notwithstanding a prior broken agreement. Under the PSC's current laissez faire style of regulation, however, the PSC apparently leaves it up to the utility whether to offer a new DPA based on the customer's financial situation, and instead allows the utility to demand full payment again, or to insist on very large down payments to start a new DPA, without regard to the customer's financial situation.

After the Emergency HEAP grant, the utility again demanded payment of an amount the customer could not afford. Instead of negotiating a new DPA with the customer based on her financial circumstances, the utility customer was again threatened with termination, and again referred to DSS.

This time, the HEAP program was closed for the season. The DSS made a state and locally funded emergency utility assistance payment of over $900 under Section 131-s of the Social Services Law, equal to the bills for the most recent four months service. The customer was required to sign a repayment agreement with DSS.

Next, instead of offering a DPA negotiated based on the customer's financial circumstances, the utility demanded half the amount due, which the customer simply could not pay.

The customer sought the assistance of the PSC Hotline [1-800-342-3355] and Complaint line [1-800-342-3377]. The PSC supported the utility's demand, and said the customer needed to pay more than $1,500, which she did not have, to start a new DPA.

Service was terminated.

The customer and her young children cannot stay safely in the cold and dark house. See No Electricity: Middletown Residents in Critical Condition from Lantern Fire; Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households.

The family moved out of their home due to the lack of electricity and heat, and is temporarily staying with friends.

The utility is getting nothing for current service, for which the customer could pay. The meter is not turning. The utility is not getting even an installment payment on the arrears. The family is constructively evicted from their home due to the lack of essential service. The state policy of continued utility service has been completely frustrated.

Utility terminations are on the rise all across New York State, due not onlyto harder economic times, but also due to misguided utility practices supported or tolerated by the PSC. See PSC Policies Foster Increase in Utility Service Terminations as a Collection Tactic.

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