Saturday, October 26, 2013

Fire Kills 3 Boys After Con Ed Shut Power Off to Collect Unpaid Bill and Mom Used Candles

The importance of continued, safe electric service was tragically underscored again last night, when three young Bronx boys, ages 4 months, 2 years, and 5 years died in a fire apparently caused by a candle used for light.  According to a CBS news report,  "Con Edison confirmed that it had shut off power to the apartment due to non-payment. Neighbors said the mother of five who lived in the unit had been using the candles as an alternative to light the apartment. The power had only been off for a few days, Con Ed told CBS 2.

According to ABC News, "The mother had been approved for public assistance, and the lights were due to come back on Saturday."

According to a story, "A Con Edison spokesman said the apartment's electric meter had been removed and power shut off on Thursday. The electric bills had totaled $8,700 and had about $500 of late fees tacked on, a landlord told He said the one-bedroom unit was still in Turner's grandmother's name..."

The Utility Project has repeatedly warned that utilities are being allowed by their regulator, the Public Service Commission, to have rates unaffordable to the poor, to reduce customer service to those in need, and to unduly rely on service interruption, as a bill collection tactic, instead of negotiation or assistance in obtaining public aid as a last resort.  See, e.g.,
After Tropical Storm Irene raised awareness of the cost and danger of electric service interruptions due to storm blackouts, AARP issued a White Paper on the less noticed but no less dangerous and harmful deliberate service interruptions for collection purposes.  See The Quiet Blackout, New York’s Utility Termination Storm (2011).

After Hurricane Sandy resulted in electric service interruption to many thousands of customers, poor and nonpoor alike, a Moreland Commission was convened.  The Utility Project and AARP submitted a report questioning the deregulatory style of Public Service Commission, which relies on "performance regulation" to reward cost cutting, which has no performance standards for major storms, which maintains revenues at the same level even when service is off, and which defers for later recovery from customers all costs of major storms. As with major storms, utility revenues are unaffected by the 80,000 or so annual service terminations for collection purposes, due to the "revenue decoupling" mechanism promoted by environmentalists to guarantee the same utility revenues regardless of the amount actually used, and there is no performance "metric" to measure and discourage the interruption of service as a bill collection tactic.

In the recent Central Hudson/Fortis merger case, the Utility Project objected to approval of the merger and a rate plan extension without improvement of low-income rates and investigation of Central Hudson's practices regarding the interruption of service for bill collection purposes, submitting data showing that shutoffs have risen from 4,688 in 2005 to 13,687 in 2012, and that the percentage of customers shut off rose from 1.89% in 2005 to 5.99% in 2012.

In the Con Edison rate case now underway, the Utility Project is raising the issue of undue reliance on service interruption as a bill collection measure. See Utility Project Files Testimony in Con Edison Rate Case, Seeking Improved Low Income Rates, Reduced Service Interruption to Collect Bills, Improved Storm Cost Recovery Measures, June 2013.  See also, Testimony of Nancy Brockway, a former Commissioner of the New Hampshire Public Service Commission, who stated in her rate case testimony:
[R]ates charged by a Con Edison electric and gas are too high and too volatile for many low-income families. Second, with regard to the use of service interruption as a collection tool, the Company relies too much on this practice and not enough on better practices for engaging with payment-troubled customers who lack the resources to pay in full and on time. Third, steps should be taken to expand the reach and effectiveness of the low-income affordability program.
Usually quick to invoke confidentiality of customer information, in this situation Con Edison appears to be taking inoculatory PR measures to justify the interruption of service that preceded the fire and deaths:  According to a CNN report,
"The account had a significant amount of arrears -- well into the thousands of dollars," Consolidated Edison spokesman Allan Drury told CNN.   "We try to avoid turning service off to customers. We'll put them on payment plans to work with them to avoid turnoff, but this account had substantial arrears."  
The situation, where service was off while the customer sought public assistance, is similar to a 2005 incident  involving the death of a New York City child in a fire started by a candle while power was shut off. It was reported that the customer had made payment arrangements sufficient to be reconnected, the reconnection was scheduled for the next day, but the 2005 fire occurred during the intervening night:
  • "[A] Con Ed spokesman ... confirmed electricity to the apartment had been cut off at 1:45 p.m. Monday. Two hours later, [the customer] appeared at a local Con Ed branch to pay $700 - almost half the outstanding bill. [A]n order to restore electricity within 24 hours was issued two hours later. Tragically, it was not in time - firefighters responded to the scene of the fatal fire at 10:45 p.m."
Questions that should be answered in any investigation include:
  • Did Con Edison comply in all respect with the Home Energy Fair Practices Act when it terminated electric service to the customer?  See Lawsuit Involving Death of Velma Fordham Settled by National Fuel
  • Did Con Edison have a written deferred payment agreement (DPA) with the customer that was broken by the customer, or was it unwritten?  The HEFPA statute requires DPAs to be signed by both the company and the customer.  Utilities frequently enter into oral, unwritten agreements with customers.  As noted by the PSC, "However, 16 NYCRR § 11.10(a)(1) requires the utility to offer a written deferred payment agreement, signed "by both the utility and the customer," prior to terminating service for nonpayment. Therefore, a customer who defaults on a verbal deferred payment agreement remains eligible for deferred payment terms, as per 16 NYCRR § 11.10(b)(1)." 
  • If there was a written DPA that was broken, was it negotiated based on the customer's individual financial circumstances, as contemplated by Section 37 of the Public Service Law?
  • Did Con Edison shut the customer off for breach of an "oral" DPA?  The deregulation minded Public Service Commission gave its OK to unwritten oral DPAs and countered objections with the promise that if a customer broke an oral DPA they would still have the chance to keep service with a new written DPA.  See Utilities Must Offer Written, Negotiable Payment Agreements Before Terminating Electric or Natural Gas Service, August 2008. But Con Edison is known to threaten shutoffs for breach of an oral DPA.  
  • Did the utility provide aid to the customer in accessing public assistance for utility arrears? 
  • Did the bills include excessive charges for ESCO service, purchased from the ESCO by Con Edison and demanded from the customer under threat of shutoff?  
  • Did the customer have phone service to communicate and negotiate with Con Edison, which has been allowed by the PSC to close most of its walk-in service centers?  
  • Does Con Edison have effective liaison with public assistance agencies, and why does it leave power off after public assistance is assured?
  • Should Con Edison be required to make same-day reconnections when payment is guaranteed by HRA?
  • Were some of the arrears for which the customer was terminated stale, transferred from other persons, backbilled, reversal of shared meter charges, or incurred prior to other public assistance payments under Social Services Law 131-s that should have precluded repeat terminations to collect old arrears?
  • Could another adult person in the household have opened a new account in their name?
  • Did the customer have access to legal assistance to forestall the shutoff or pursue bankruptcy remedies?
Gerald A. Norlander

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