Utility Bill Pay Plan Set

Shut-off Ban Lifted, But Customers Can Arrange Interest-free Payments

April 29, 2009|By Lorraine Mirabella | Lorraine Mirabella,lorraine.mirabella@baltsun.com

The more than 120,000 Maryland customers who are behind on their home gas and electric bills will have a chance to work out interest-free payment plans with the state's utilities to avoid service disruptions under a plan approved by state regulators.

The Maryland Public Service Commission lifted its temporary ban on service terminations Friday, but it said the utilities must offer plans to give consumers a chance to pay bills.

Last month, the PSC ordered utilities to temporarily halt terminations to give regulators a chance to address growing delinquencies among customers grappling with high winter utility bills amid a recession.

"The commission intends ... to provide customers who are genuinely struggling a fair opportunity to pay their bills without interruption of service," Doug Nazarian, chairman of the PSC, said in a statement. "This should benefit the utilities as well, since the payment plans should increase the likelihood that customers are able to pay bills they otherwise might not."

The PSC began looking into utilities' termination practices in January and found an unacceptably large number of households stood to have gas and electric service turned off. Baltimore Gas & Electric Co. said more than 80,000 customers could be facing termination, while Potomac Electric Power Co. estimated more than 40,000 of its customers could have service cut off.

In March, regulators ordered a group of consumer advocates, utility companies and commission staff to sort out the details of payment plans.

"We're in the process of determining how we would implement the order," said Rob Gould, a BGE spokesman. "At the same time, we have received some calls from customers, where we are engaging with them in dialogue about an extended payment plan."

Only 2 percent of the turnoff notices BGE sent out last year resulted in disruption of service, which typically was restored within 72 hours, Gould said.

The PSC said the numbers of at-risk customers has increased, but a commission spokeswoman on Tuesday had no updated figures and Gould said he had no updates for BGE. Most of the customers at risk of termination by BGE and Pepco were not known to be low-income customers, the order said.

Before sending termination notices or proceeding with terminations, BGE, Pepco and other large utilities must first notify customers in writing that flexible payment plans are available, with no interest or late fees. Late fees accrued prior to the start of a payment plan would not be waived.

Payment plans can be as long as 12 months but should be tailored to a customer's individual circumstances, the PSC said.

The Office of the People's Counsel, which represents consumers, had urged the PSC to offer customers at least up to 12 months to pay delinquent amounts.

The PSC order gives a customer 14 days after receiving a written notice to contact the utility to negotiate a payment plan. Customers who are unable to work out a plan may appeal to the PSC.

The order prohibits utilities from requiring any down payment from customers whose service has not previously been terminated, who have made payments within the last 90 days or who have not defaulted on previous payment plans. Otherwise, the utilities can require up to a 25 percent down payment.

In a dissenting opinion, Commissioner Harold D. Williams said he felt more generous terms should be given to consumers to pay higher than expected bills.

"It is readily apparent that some are finding it difficult to manage these continually high utility bills now, and the problem will only exacerbate during the summer months," Williams said in a written opinion.

Williams said no customer should be required to make a down payment and that already incurred late fees should be waived. He also said all payment plans should be for a period of up to a year, at the option of the consumers.

The PSC said it is continuing to investigate a spike in consumer complaints about higher-than-normal energy bills.

cutoff rules

The Maryland Public Service Commission lifted its temporary ban on service terminations, but it is requiring state utilities to offer payment plans to consumers who are behind on their bills. Before turning off service, utilities, including Baltimore Gas and Electric Co., must:

* Notify customers in writing that flexible payment plans are available.

* Offer plans with no interest or late fees.

* Offer repayment terms of up to 12 months.

* Require down payments only if a customer has had service terminated in the past or failed to make a payment within the past 90 days.

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