PSC schedules hearings on utility rules

Objective is to revise regulations governing payments, shut-offs

Preliminary report next month

Review has its origins in complaints about BGE service termination

April 08, 2002|By Dan Thanh Dang | Dan Thanh Dang,SUN STAFF

In the first comprehensive review of utility customer protections in 17 years, the Maryland Public Service Commission has set a hearing schedule to revise the regulations that govern payment plans and utility service shut-offs of residential customers.

A preliminary report expected to be issued next month by a hearing examiner could include provisions restricting gas and electric service shut-offs until utilities have notified customers about alternative payment plans and attempted to contact them at least twice before termination.

The review grew out of allegations that Baltimore Gas and Electric Co. unfairly cut off service early last year to thousands of residential customers who didn't pay their bills on time. People's Counsel Michael J. Travieso, the consumers' advocate on utility issues, had originally requested an investigation into BGE's policies but agreed to a thorough examination and revision of the state's customer protection regulations when the PSC severely limited the investigation into BGE's practices to 13 cases.

"We are pleased that the commission has decided to open a formal proceeding to revise current regulations for residential service terminations, payment plans and deposits," Travieso said. "Enhancing these basic customer protection rules will benefit all gas and electric consumers in Maryland, particularly the elderly, disabled and families on limited incomes.

"We are also pleased that the commission plans to convene one or more public hearings as part of the review process. Public hearings around the state provide valuable input to the commission and should result in an improved regulatory process."

Seventeen utility companies across the state provide service to about 800,000 gas customers and 2.2 million electric customers. According to PSC data, gas and electric companies significantly increased terminations during winters in the late 1990s.

In the initial request by the Office of People's Counsel for an investigation in August, the OPC said BGE cut off the power of about 22,700 residential customers from April to June last year because they were unable to pay winter bills that doubled and tripled after unusually cold weather and soaring natural gas rates. More than 2,000 of them were low-income residents who qualified for state and public assistance, which was delayed by computer problems and did not arrive in time to help pay bills, according to the OPC.

The OPC charged that BGE discriminated against low-income customers by not granting special payment plans. BGE immediately took the rare step of suspending electric service cut-offs for all residential customers through a heat wave and then filed a request to dismiss the OPC petition. The company accused the People's Counsel of unfairly singling out the Baltimore utility in the inquiry.

Revising the regulations, which haven't been changed since 1985, will not be easy.

The OPC wants to require utilities to offer automatic payment plans to customers struggling to pay their bills; restrict service shut-offs when temperatures fall below 32 degrees for a 48-hour period; and waive credit rules for customers who demonstrate "financial hardship."

OPC also wants to raise from $50 to $150 the amount of customer arrearage that triggers a termination notice. Utilities have proposed raising the amount to $100 and argued that forcing them to offer automatic payment plans to all customers would be "unlawful delegation of the commission's regulatory authority."

"We're like any other business, a payment plan is an interest-free loan, and we have to look at past payment and credit history before extending that type of loan to a customer," said Charles B. Welsh, a BGE spokesman. "We think this is the appropriate forum for the issue. We're looking forward to a complete discussion of the issues involved, which we believe will be beneficial to all the parties."

Participants in the case have until June 4 to file initial comments on the proposed changes after the PSC hearing examiner's report is issued next month.

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