NOTICES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Chapter 14 Implementation
[35 Pa.B. 1845] Public Meeting held
March 3, 2005Commissioners Present: Wendall F. Holland, Chairperson; Robert K. Bloom, Vice Chairperson; Kim Pizzingrilli
Chapter 14 Implementation; Doc. No. M-00041802F0002
Implementation Order By the Commission:
On November 30, 2004, the Governor signed into law SB 677, or Act 201. This law went into effect on December 14, 2004. The Act amended Title 66 by adding Chapter 14 (66 Pa.C.S. §§ 1401--1418), Responsible Utility Customer Protection. The Act is intended to protect responsible bill paying customers from rate increases attributable to the uncollectible accounts of customers that can afford to pay their bills, but choose not to pay. The legislation is applicable to electric distribution companies, water distribution companies and larger natural gas distribution companies (those having an annual operating income in excess of $6,000,000).1 Steam and waste water utilities are not covered by Chapter 14.
Chapter 14 supersedes a number of Chapter 56 Regulations, all ordinances of the City of Philadelphia and any other regulations that impose inconsistent requirements on the utilities. Chapter 14 expires on December 31, 2014, unless reenacted. Two years after the effective date and every two years thereafter, the Commission must report to the General Assembly regarding the implementation and effectiveness of the Act. The Commission is directed to amend Chapter 56 and may promulgate regulations to administer and enforce Chapter 14.
Chapter 14 seeks to eliminate the opportunities for customers capable of paying to avoid paying their utility bills, and to provide utilities with the means to reduce their uncollectible accounts by modifying the procedures for delinquent account collections. The goal of these changes is to increase timely collections while ensuring that service is available to all customers based on equitable terms and conditions. 66 Pa.C.S. § 1402.
On January 28, 2005, the Commission issued a Secretarial Letter identifying general subject areas and encouraged interested parties to file written comments. In addition, on February 3, 2005, the Commission held a ''Roundtable Forum'' to address the implementation and application of Chapter 14. Written comments were filed by the following interested parties: Energy Association of Pennsylvania (EAP), Office of Consumer Advocate (OCA), Philadelphia Gas Works (PGW), Community Legal Services (CLS), Pennsylvania American Water (PAW), PPL Electric Utilities Corporation and PPL Gas Utilities Corporation (PPL or the Companies), PECO Energy Company (PECO Energy), Pennsylvania Utility Law Project (PULP), Pennsylvania Coalition Against Domestic Violence (PCADV), Pennsylvania Apartment Association (PAA), AARP, and Housing Alliance of Pennsylvania (HAP). PGW filed reply comments on February 24, 20052 .
Based upon our review of the comments filed by interested parties pursuant to our January 28, 2005 Secretarial Letter and the oral comments expressed at the Roundtable Forum, we will address seven threshold issues in this Order. Although we consider these issues, at this time, to be the most fundamental, we understand that this is an on-going process and that other implementation issues will need to be resolved in the future.
In reaching our dispositions herein, we have considered all the comments filed by the parties and, to the extent that we have not specifically referred to all the parties' comments on a particular issue, that omission does not mean the comments were not reviewed. Moreover, a number of parties have taken the same position on an issue and we shall not repeat their arguments. The issues we have identified for review and disposition are as follows.
1. § 1405(d): Number of Payment Agreements
Section 1403 defines ''payment agreement'' as ''[a]n agreement whereby a customer who admits liability for billed service is permitted to amortize or pay the unpaid balance of the account in one or more payments.'' With respect to the use of the term ''payment agreement'' in § 1405(d), the EAP has expressed the opinion that absent a ''change in income'', the Commission shall not establish or order a utility to establish a second or subsequent payment agreement if a customer has defaulted on a previous payment agreement. EAP asserts that the § 1405(d) prohibition against Commission ordered second payment agreements (absent a change in income) applies even if the first payment agreement was not ordered by the Commission. EAP states that absent a ''change in income'' the Commission cannot order any payment agreement if the customer defaulted on a utility established payment agreement.
PGW supports this position and argues that the definition of payment agreement in § 1403 does not make a distinction between a Commission ordered payment agreement with the customer and a utility's agreement with the customer. Therefore, the ''one payment agreement'' rule of § 1405(d) applies whether the prior agreement was established by the Commission or by the utility.
Furthermore, PGW argues that the General Assembly could have referred to Commission established payment agreements in § 1405(d) and that the absence of this reference means that Commission agreements were not strictly contemplated by the use of the term ''payment agreement'' in § 1405(d). Moreover, given the number of text references to payment agreements, the General Assembly could not mean only Commission established agreements.
On the other hand, the OCA argues that § 1405 was aimed at remedying the perceived concern that the Commission was requiring utilities to enter into multiple payment agreements of inordinate length. The OCA submits that this concern was remedied by § 1405(b) which limits the maximum length of a Commission adopted payment agreement and § 1405(d) which limits the Commission to imposing a single payment agreement. Under its prospective application of the statute, the Commission is authorized to grant one payment agreement that meets the terms of Chapter 14 to any public utility customer.
CLS believes that Chapter 14 does not abrogate the duty that utilities have under Chapter 56 to attempt to reach payment terms with customers. In fact, CLS submits that Chapter 14 does not preclude the Commission from reviewing and revising a payment agreement which unreasonably requires repayment of the outstanding balance over a period which is shorter than the periods allowed in § 1405.
Resolution
The Commission acknowledges that the language of the statute lends itself to more than one rational interpretation, and the interested parties on both sides of this issue have presented strong arguments. However, for the reasons set forth below the Commission finds that absent a change in income, § 1405(d) precludes the Commission from establishing a second payment agreement if a customer has defaulted on a previous payment agreement. This disposition is legally correct as it is based on sound statutory construction and is consistent with the intent and spirit of Act 201.
As defined in § 1403, the term ''payment agreement'' includes both utility agreements and Commission agreements. As stated previously, § 1405(d) provides that, absent a change in income, the Commission shall not establish a second payment agreement if a customer has defaulted on a previous payment agreement.
The Commission finds that the Legislature in adopting § 1405(d) declined to make a specific distinction between payment agreements reached by the utility and the customer or an agreement established by the Commission. Therefore, the ''one payment agreement'' rule does not apply solely to situations in which the prior agreement is a Commission established payment agreement.
We are sympathetic with the point raised by the OCA that prior to the Roundtable Form, the notice sent by each utility to electric, gas, and water customers indicated that the Commission would have the authority to issue at least one payment agreement. Now some of these utilities have retracted from their original position to the point that they oppose even a single payment agreement established by the Commission. However, the Commission is persuaded by the plain language of § 1405(d)--the Commission shall not establish a second payment agreement if a customer has defaulted on a previous payment agreement absent a change in income.
Based on the rules of statutory construction, we cannot make a distinction that the Legislature has not written into the statute. 1 Pa.C.S. § 1921(b). The words of the statute appear to be clear that only one payment agreement is permitted, absent a change in income, and the decision to enter into a second agreement is left to the discretion of the utility, not the Commission.
We note that our BCS in 2004 received 90,797 payment arrangement requests (PAR) from electric, gas, and water customers. Therefore, we find particularly relevant the reference to the duty that utilities have under Chapter 56 in reaching reasonable payment terms with its customers. Utilities must emphasize consumer education and make sure that their customers are fully aware of this new law and the rights that they have and do not have when they enter into a payment agreement, specifically that consumers will only be granted one payment arrangement. We note that utilities have the discretion to enter into subsequent payment arrangements.
The Commission acknowledges that our determination here will deny some customers of the right to at least one opportunity to receive a payment agreement from the Commission. However, this will not necessarily mean that these customers will not file informal complaints. Many of these customers will file factual termination-related disputes, such as (1) there was no agreement to the payment arrangement terms, (2) change in income, (3) billing disputes, (4) significant change in circumstances, and (5) termination standards violations.
Our determination that consumers may only receive one payment arrangement raises the importance of the Commission being made fully aware of how each utility under Chapter 14 plans to implement its provisions and how consumers of these utilities will be informed of the changes being made to each utility's collection practices. We recognize that our disposition here may raise additional implementation issues such as, for example, how a ''change in income'' or ''significant change in circumstance'' will be verified by the utility. Therefore, the Commission directs each utility subject to Chapter 14 to file a Chapter 14 Implementation Plan within thirty (30) days of entry of this Order, with the Commission and the parties at this docket. The Implementation Plan should address practices and procedures that utilities will employ to comply with Chapter 14 and this Order.
2. § 1406(c): Immediate Termination for Unauthorized Use and User Without Contract
The EAP takes the position that ''users without contract'' are unauthorized users where service is being used without the utility's authorization. According to the EAP, under § 1406(c) the user is subject to immediate termination without notice. PGW views users without contract as akin to people who receive a windfall withdrawal from an ATM machine and then demand 5 years to pay it back.
The OCA emphasizes that a ''user without contract'' does not constitute ''unauthorized use'' as that term is used in § 1406(c)(1). Unauthorized use of service is not defined in Chapter 14, but it is defined in Chapter 56 as follows:
Unauthorized use of utility service--Unreasonable interference or diversion of service, including meter tampering (any act which affects the proper registration of service through a meter), by-passing (unmetered service that flows through a device connected between a service line and customer-owned facilities), and unauthorized service restoral.52 Pa. Code § 56.2. The OCA submits that unauthorized use goes to specific improper acts, particularly acts that have safety consequences, and would not apply to usage by someone just because they are not a customer of record.
PULP believes that because of the high importance and life sustaining nature which utility service has to consumers, notice prior to shut-off for non-safety related matters should continue to be maintained. PPL agrees and will continue its practice of sending a notification to premises involved in users without contract situations. PPL believes that some type of notification would be particularly helpful during the winter months where injury to persons and property may occur. The utility would not know if the household contained low-income residents without notification. In addition, notification will allow occupants to call the utility to establish service. Regarding fraud, the Companies will investigate the situations and take appropriate steps such as termination of service or legal action.
Resolution
We disagree with the EAP and PGW's position on this issue. It is important from a safety standpoint to maintain the distinction between a user without contract and unauthorized use of service. The Commission historically has viewed unauthorized use of service and user without contract as separate and distinct issues. Unauthorized use of service usually refers to meter tampering, diversion of service, or some other means of stealing utility service from the company. Whereas a user without contract involves situations where the customer has not been identified.
The Chapter 56 definition of unauthorized use of utility service does not conflict with any provision in Chapter 14. The Commission's Regulations have historically permitted the immediate termination of service in these unauthorized use cases where there is an obvious threat to human safety and/or the utility delivery system. While Chapter 14 does not contain a definition of unauthorized use, the context of § 1406(c) indicates that the Legislature intended utilities to have the authority to immediately terminate service that was obtained through theft or fraud. Immediate termination in these instances is warranted. Indeed, our regulations already permit termination without advance notice in these situations. We must, however, caution utilities to use this authority judiciously and only under circumstances that address clear safety concerns. See, e.g., 52 Pa. Code §§ 56.98, 59.24(b).
User without contract, on the other hand, refers to using utility service without the knowledge or approval of the utility. While in the strictest sense this may be an unauthorized use of service, user without contract generally implies no intent to deceive on the part of the customer. A user without contract situation normally arises when the utility company chooses to let the service remain on after a ratepayer vacates a property and discontinues service. This is not an uncommon occurrence in utility operations. See, e.g., Pat Marioni v. PECO Energy Company, C-00968276 (July 7, 1997).
When a new occupant moves into the property, the new occupant is a user without contract until completing an application for service and having an account initiated. The utility can easily prevent these situations by physically disconnecting the utility service between customers. Most companies, however, try to reduce costs by avoiding repeated trips to the property. The Commission supports these efforts to reduce costs but believes that customers should not be subjected to immediate termination as a result. If a new customer does not apply for service in a timely manner, the utility company should be able to detect usage on an inactive account and should pursue termination, minimizing the potential losses to the company.
Another principal cause of user without contract situations is having a ratepayer move from a property without advising the utility or officially requesting discontinuance of the account. Another customer may move in without requesting service, thereby creating a user without contract situation. Under these circumstances, Section 56.16(a), which has not been superseded by Chapter 14, places the responsibility for the service on the ratepayer. Other user without contract situations can arise when one ratepayer moves from a property and a roommate remains at the premises, or when a ratepayer dies and the family remains at the property.
User without contract situations are covered by 66 Pa.C.S. § 1503(b) which states that except when required to prevent or alleviate an emergency or except in the case of danger to life or property, a utility may not terminate service for any reason without personally contacting the customer at least three days prior to such termination. Since user without contract is not specifically defined or addressed in Chapter 14, the Commission sees no inconsistency between § 1503(b) and Chapter 14, and finds that a 3-day notice prior to terminating these accounts is still required.
Requiring a 3-day notice prior to termination may also minimize losses to the utility company. Many customers, when faced with the threat of termination, will come forward and formally apply for service. This reduces the utility's costs associated with terminating and reconnecting the account.
If utilities are allowed to treat users without contract the same as unauthorized use, an unnecessary tragedy may occur. The Commission finds that it is always the customer's responsibility to contact the company and to apply for utility service when the customer begins to use the service. There is a possibility of fraud, but common sense dictates that not all of these customers are attempting to avoid paying for their utility service. Customers must act responsibly to insure that the utility has the proper billing information and utilities must implement and follow appropriate tracking procedures. Diligent maintenance of accounts by the utility company can prevent or reduce lost revenues due to these types of billing problems.
3. § 1407(c): PUC Decisions re: Reconnection of Service
The EAP comments that § 1407 empowers public utilities to set the conditions for reconnection of service. In other words, the Commission has no role in reconnection decisions other than to ensure a utility's compliance with § 1407. Specifically, the EAP contends that § 1405 does not apply to customers who have been terminated and EAP submits that the Commission has a limited, if not non-existent, role in ruling on cases where utility service has been terminated.
Apparently, EAP's position is that § 1405(b) formulas do not apply to situations where a customer's service has been terminated. Moreover, EAP points out that § 1407 applies only to what utilities may do. PPL supports EAP stating that § 1405, which addresses payment agreements, does not appear to apply to the reconnection of the service.
CLS submits that § 1407 regarding reconnection terms does not preclude Commission review. Accordingly, the Commission can revise reconnection terms which require repayment of the outstanding balance over a period which is shorter than the periods allowed in § 1407.
Resolution
Section 1405(b) does not make a distinction between payment agreements where the service is off or on. Moreover, Chapter 14 does not specifically address how the Commission may respond to contacts from customers seeking restoration of utility service.
Therefore, in applying the plain language meaning to § 1407 which details the payment requirements a public utility may apply to restore service, we conclude that the Commission's role in restoration cases should be limited to making sure that the utility is properly applying the provisions of § 1407(c) and that ''life events'' are properly considered for those consumers above 300% of the federal poverty level. Once the utility's proper application of § 1407(c) is verified, the Commission will inform the complainant that the utility's payment requirements are consistent with Pennsylvania Law and must be met in order to have service restored.
4. 52 Pa. Code § 56.97(b): Utility Payment Agreement Obligations
The EAP states that the law requires the customer to contact the utility first, which allows the customer the opportunity to enter into a payment agreement according to the provisions of Chapter 14. Therefore, the EAP concludes that 52 Pa. Code § 56.97(b) and § 56.151(3) have been abrogated by § 1405. Section 56.97(b) provides as follows:
(b) The utility, through its employes, shall exercise good faith and fair judgment in attempting to enter a reasonable settlement or payment agreement or otherwise equitably to resolve the matter. Factors to be taken into account when attempting to enter into a reasonable settlement or payment agreement include the size of the unpaid balance, the ability of the ratepayer to pay, the payment history of the ratepayer and the length of time over which the bill accumulated. If a settlement or payment agreement is not established, the company shall further explain the following:(1) The right of the ratepayer to file a dispute with the utility and, thereafter, an informal complaint with the Commission.(2) The procedures for resolving disputes and informal complaints, including the address and telephone number of the Commission: Public Utility Commission, Box 3265, Harrisburg, Pennsylvania. 17105-3265, (800) 692-7380.(3) The duty of the ratepayer to pay any portion of a bill which the ratepayer does not honestly dispute.Similarly, Section 56.151(3) provides as follows:
Upon initiation of a dispute covered by this section, the utility shall:(3) Make a diligent attempt to negotiate a reasonable payment agreement if the ratepayer or occupant claims a temporary inability to pay an undisputed bill. Factors which shall be considered in the negotiation of a payment agreement shall include, but not be limited to:(i) The size of the unpaid balance(ii) The ability of the ratepayer to pay.(iii) The payment history of the ratepayer.(iv) The length of time over which the bill accumulated.PGW submits that when a utility offers a payment agreement that is within the § 1405 parameters, the utility must be deemed to have acted in accordance with the law. Therefore, such a payment agreement may not be found to be inconsistent with the ''good faith . . . fair judgment [and] reasonable payment agreement'' requirements of 52 Pa. Code § 56.97, thus abrogating § 56.97 and the parallel § 56.151.
Furthermore, PGW explains that if a utility and a customer voluntarily agree to a payment agreement, such an agreement by definition is ''mutually acceptable.'' Moreover, since the § 56.97(b) and § 56.151 standards are based upon a completely different set of criteria than those imposed by § 1405, the § 56.97/56.151 standard is no longer valid. In PGW's opinion, the Commission will need to articulate a new set of standards for evaluating first PARs that do not include the § 1405(b) terms. If after investigation the Commission determines a non-1405(b) payment agreement proposed by the utility is unsatisfactory, then the Commission is still limited by § 1405(b) in fashioning a revised payment agreement for the customer.
PULP argues that Chapter 14 neither directly supersedes nor abrogates these sections by inconsistency. Finally, PULP maintains that the requirements of Sections 56.97 and 56.151 which require a utility to exercise good faith in entering into a payment agreement and advising a customer of the right to file an informal complaint, respectively, are consistent with the position that the Commission can order a payment agreement separate and apart from a utility's payment agreement with its customer.
The OCA submits that there is nothing in Chapter 14 that relieves the utilities of their Chapter 56 good faith obligation to attempt to achieve ''mutually satisfactory'' payment agreements with their customers. CLS maintains that a utility is still bound by the Chapter 56 requirements to consider: (a) the size of the unpaid balance; (b) the ability of the ratepayer to pay; (3) the ratepayer's payment history; (4) the length of time over which the bill accumulated. 52 Pa. Code § 56.97. In particular, in considering the ability of the customer or applicant to pay, the utility must obtain information concerning the household's income and expenses. In sum, as set forth in § 1402 (Declaration of Policy) and as consistent with historical Chapter 56 goals, an express purpose of the Act is to ''ensure that service remains available to all customers on reasonable terms and conditions.''
Resolution
Chapter 14 includes directions addressing Commission obligations when making payment agreements (§ 1405(b)) and also includes directions to utilities when making payment agreements to get service restored (§ 1407(c)). However, Chapter 14 does not provide any explicit direction to utility companies with respect to their obligations when negotiating payment arrangements with their customers when the customer is attempting to avoid the termination of service.
Because utility payment agreement obligations are not specifically addressed in Chapter 14, and since § 56.97 is not inconsistent with Chapter 14 or listed as one of the sections specifically superseded under Section 4 of Act 201, we believe that § 56.97(b) remains fully in effect. However, utility representatives at the Roundtable expressed the opinion that § 56.97(b) is superseded. Their comments did not include what section of Chapter 14 they believe supersedes § 56.97 and why. The utilities also failed to articulate in any detail the portions of § 56.97 they find offensive and burdensome. So it appears that utilities are advocating the elimination of their obligation to apply § 56.97(b) without proposing any specific rules that should apply as they negotiate payment arrangements. Indeed, PGW advocates that we need to articulate a new set of standards for evaluating first PARs at the same time they are advocating doing away with the standards that we already have in place.
If there is no obligation for the utility to apply § 56.97(b) and ''exercise good faith and fair judgment'' or consider ''the ability of the ratepayer to pay,'' then the Commission will be required to respond to termination-related informal complaints by investigating on a case-by-case basis whether a utility/customer payment agreement is reasonable and whether the customer agreed to its terms. We believe that not only is § 56.97 not superseded by any part of Chapter 14, but that its application in no way impedes the attainment of the stated policy goals of Act 201. In fact, several sections of Chapter 14 make distinctions based on the customer's poverty level (ability-to-pay); a criteria that is found in § 56.97.
In addition, the obligations imposed by § 56.97 are general and flexible in nature and do not impose strict formulas or payment term requirements. The Regulation requires that a utility demonstrate that it considered the factors found in the Regulation when negotiating a reasonable payment agreement.
5. § 1404: 90-Day Payment Periods for Deposits
EAP explains that § 1404 revised the deposit rules and under subsections (a) and (e) a public utility shall not be required to provide service without paying the full amount of the cash deposit if the applicant fails to pass the credit worthiness test of the utility. A ''no score'' result means that the applicant is not an acceptable credit risk and may be required by the utility to post a security deposit.
In addition, EAP submits that subsection (h) applies to reconnection security deposits only. The section states that ''[a]pplicants required to pay a deposit upon reconnection under subsection (a)(1) shall have up to 90 days to pay the deposit in accordance with Commission regulations.'' EAP believes that if the customer falls within Section 1404(a)(1), then he will be allowed to pay the deposit under 52 Pa. Code § 56.42 in installment payments. To be specific, 50% is payable upfront as a condition to restore service and this may be followed by two installments of 25% payable in 30 days and 60 days after the determination that the deposit is required. PPL also supports using the current deposit process.
In PGW's reply comments, the company acknowledges that the OCA is correct that a customer has up to 90 days in which to pay the deposit authorized by § 1404(a)(1). However, PGW disagrees that the § 56.38 requirement that payments be made in 50%/25%/25% increments is inconsistent with the 90 day rule. According to PGW, the two provisions should be applied by establishing that applicants have up to 90 days in which to remit their deposit, but must pay 50% prior to service being initiated with the remaining 50% being paid in two installments-- one installment after 30 days and one due 60 days thereafter.
Resolution
Subsection (h) provides certain customers with the opportunity to have service restored and then up to 90 days to pay a deposit. At the same time, § 1404(a) and (e) indicate that a utility is not required to provide service until a deposit is paid in full. Therefore, it appears that the industry is advocating applying § 1404(h) in conjunction with the Chapter 56 standard at 52 Pa. Code § 56.42, which addresses the payment period for deposits. Section 56.42, like § 56.38 provides a 60-day payment period (50% up-front, 25% 30 days later, and 25% 60 days later).
We believe that § 1404(h) will be difficult to implement if it is interpreted to mean that a utility does not have to restore service until the deposit is paid in full. Such a policy would likely result in numerous complaints to the Commission from customers who pay some part of the deposit but fail to have their service restored. Therefore, we shall adopt the position advocated by PGW--a customer must pay 50% prior to service being initiated with the remaining 50% being paid in two installments--one installment after 30 days and one due after 60 days thereafter. The Commission will undertake a review of these sections of its Regulations in a subsequent rulemaking proceeding.
6. Termination for Non-Basic or Miscellaneous Charges:
Traditionally, a distinction has been made between basic and nonbasic utility charges, such as the distinctions provided by § 56.13:
Section 56.13. Separate billings for merchandise, appliances and nonrecurring services. Charges for other than basic service--that is, merchandise, appliances and special services, including merchandise and appliance installation, sales, rental and repair costs, meter testing fees, line extension costs, special construction charges, and other nonrecurring charges, except as provided in this Chapter--shall appear on a separate bill.In addition, the electric customer information regulations (52 Pa. Code § 54.2) define basic and nonbasic services:
Basic services--Services necessary for the physical delivery of electricity service, including generation, transmission and distribution. Transition charges, although temporary in scope, are basic service charges (See the definition of transition charges in this section).Nonbasic services--Optional recurring services which are distinctly separate and clearly not required for the physical delivery of electric service.The natural gas customer information regulations (52 Pa. Code § 62.72) include similar definitions. Moreover, these distinctions have been used to determine whether termination of service is an authorized collection tool or not, such as the prohibition at § 56.83 against unauthorized termination of service:
(3) Nonpayment, in whole or in part: for leased or purchased merchandise, appliances or special services including but not limited to merchandise and appliance installation fees, rental and repair costs; of meter testing fees; of special construction charges; and of other nonrecurring charges that are not essential to delivery or metering of service, except as provided in this chapter.Resolution
The Commission finds that utilities have adequate remedies to collect balances owed for nonbasic service. Therefore, we will retain our prohibition against terminating essential utility service for nonpayment of nonbasic charges. To allow utilities to include charges for services that may be unregulated by the Commission would result in additional terminations, and create administrative difficulties relating to determining the validity and accuracy of the nonbasic delinquent amounts that form part of the grounds for termination. We note that our resolution here is consistent with the Commission's Regulations relating to billing and collection efforts of jurisdictional telephone companies found in § 64.63 which prohibits suspension of basic phone service for nonpayment of nonbasic services. See, e.g., Ruby Gandy v. MCI Worldcom Communications, Inc., F-01234911, entered July 11, 2004.
7. Definitions of Applicant and Customer
The EAP succinctly comments here that--''[t]he customer ceases to be a customer upon termination of service for non-payment or at the completion of a request by the customer for discontinuance of service.''
PGW agrees and contends that one of the purposes of Chapter 14 was to eliminate the ''60 day'' rule in Chapter 56 which permitted customers who were terminated for nonpayment to maintain their ''customer'' status. According to PGW, this allowed the customer to be reinstated merely by entering into another payment agreement. PGW explains that the definition of ''applicant'' applies only to a person ''not currently receiving service.'' A customer, on the other hand, is a person ''in whose name a residential service account is listed . . . .'' Therefore, once a customer is terminated or has had service discontinued, he or she no longer is a person ''in whose name a residential account is listed.''
PPL believes that a customer becomes an ''applicant'' after the Companies shut off service for nonpayment and issues a final bill for the account. For PPL, this happens five (5) business days after the termination of service. If the customer who was shut off for nonpayment contacts the Companies before issuance of the final bill, PPL recommends treating this individual as a customer rather than an applicant. This approach has practical benefits in mitigating the need for making system changes, developing new processes and training call center personnel. For situations involving improper termination of service, PPL suggests that the customer remain a ''customer'' rather than being considered an applicant.
CLS responds by asserting that § 1403 of the Act defines ''customer'' in pertinent part as a ''natural person in whose name a residential service account is listed and who is primarily responsible for payment of bills rendered for service . . . .'' CLS submits that this definition does not restrict the definition of ''customer'' to a person actually receiving residential service, as it defines a customer in terms of the person's listing on a residential account. Section 4(1) of the Act does not abrogate the definition of ''ratepayer'' contained in Chapter 56, a further indication that the Act does not preclude a customer from exercising the rights associated with the Chapter 56 ratepayer for 60 days after termination or discontinuance of service.
With regard to medical certifications, Sections 1406(f) and 1406(e)(2)(iii) recognize the rights of customers to obtain a suspension of termination procedures by means of a ''medical certification.'' Section 1407(b)(1) recognizes that customers whose service has been terminated may obtain restoration of service after termination by means of a medical certification in the 60-day period following termination of service.
Resolution
Traditionally, according to the definitions of ''applicant'' and ''ratepayer'' as found in Chapter 56, an individual retained the rights of ''ratepayer'' for 60 days after the cessation of service:
Applicant--A person who applies for residential utility service. The term does not include a person who, within 60 days after termination or discontinuance of service, seeks to transfer service within the service territory of the same utility or to reinstate service at the same address.Ratepayer--A person in whose name a residential service account is listed and who is primarily responsible for payment of bills rendered for the service. For the purposes of establishing credit, this term includes a transfer of service from a residence or dwelling within the service area of the utility or a reinstitution of service at the same location within 60 days following termination or discontinuance of service.However, Chapter 14 does not have a definition of ''ratepayer'' and instead has a definition of ''customer'' along with a definition of ''applicant'':
Customer--A natural person in whose name a residential service account is listed and who is primarily responsible for payment of bills rendered for the service or any adult occupant whose name appears on the mortgage, deed or lease of the property for which the residential utility service is requested.Applicant--A natural person not currently receiving service who applies for residential service provided by a public utility or any adult occupant whose name appears on the mortgage, deed or lease of the property for which the residential utility service is requested.Clearly, the 60-day reference found in Chapter 56 is missing from Chapter 14. As represented by the industry position, a ''customer'' ceases being a ''customer'' the moment service has been terminated, discontinued, etc. The industry opinion is apparently based on the portion of the definition of ''applicant'' that states ''A natural person not currently receiving service.'' The effect of this policy would be to treat anyone seeking utility service as an ''applicant'' and thus be required to meet all the standards and obligations placed upon an applicant for utility service (e.g. completion of application, providing ID, providing lease/deed information, occupant information, meeting credit standards/credit scoring, payment of all balances owed, etc.). This could incorrectly include situations where an individual is simply transferring service from one location to another.
These transfers could be delayed on the basis that the customer stopped being a ''customer'' when service at one location ceased and now must be treated as an applicant for the new location. The Commission finds that this policy would result in unnecessary informal complaints from customers over delays in getting service at a new location pending completion of an application process and payment of a deposit and any balance from the former residence.
The other policy option is to view the status as changing when the utility issues a final bill on the account. This interpretation hinges on the portion of the definition of ''customer'' that states, ''[a] natural person in whose name a residential service account is listed.'' (Emphasis supplied). We disagree with EAP's conclusion that if you are terminated or discontinued you are no longer a customer. The definition of ''customer'' does not require that a person be receiving service. Therefore, we agree with the position advocated by PPL which states that a residential account can still be listed in the name, for a certain period of time, of the person terminated or discontinued. This criterion is not met or satisfied until a final bill is rendered and the account ceases to be listed in the customer's name. In other words, termination or discontinuance occurs when the final bill is due and payable. However, let us make clear that improper terminations are not impacted by this resolution.
The Commission supports this policy option because it clearly limits the application of rules relating to applicants to bona fide applicants for service. It will eliminate disputes both to the utilities and the Commission about whether a person is legitimately an applicant or a customer.
Conclusion
Chapter 14 represents a significant alteration to the manner in which the Commission, the utilities that it regulates and the parties that practice before it, have traditionally addressed billing and collection issues. The Commission is committed to ensuring that the overarching goal of Chapter 14 is fulfilled so that those customers who can pay do pay. It is clear that Chapter 14 transfers many discretionary decisions that once resided with the Commission to the utilities. Therefore, the Commission has less flexibility when presented with consumer complaints relating to billing and collection efforts.
However, as shown by this Order, the Commission retains a vital role in interpreting Chapter 14 and its interplay with our existing Regulations. Today's Order has attempted to strike a balance between the rights of Pennsylvania's utilities to receive payment for the services they render and the rights of consumers to receive adequate service from their utilities. The Commission has determined that the resolutions outlined in this Order represent decisions that are consistent with Act 201 as passed by the General Assembly; Therefore,
It Is Ordered That:
1. This Implementation of Chapter 14 Order is hereby approved as being in the public interest.
2. Each electric, water and natural gas utility subject to Chapter 14 is directed to file an Implementation Plan with the Commission within 30 days of entry of this Order, at Docket No. M-00041802F0002. Attention: Secretary, P. O. Box 3265, Harrisburg, PA 17105-3265. Each utility shall file its Implementation Plan in original and 15 copies. In addition, one copy in electronic format (Microsoft Word® 2002 or readable equivalent) on diskette shall be provided to the Secretary and copies shall be e-mailed to Terrence J. Buda (tbuda@state.pa.us), Cyndi Page (cypage@state.pa.us) and Louis Sauers (lsauers@ state.pa.us). Each Implementation Plan shall be posted on the Commission's website.
3. This Order be served on the Office of Consumer Advocate, the Office of Small Business Advocate, all jurisdictional water, natural gas and electric utilities and on those parties who submitted comments on these issues under Docket No. M-00041802.
4. This Order be published in the Pennsylvania Bulletin.
5. The Law Bureau issue a Secretarial Letter describing the contents of the Implementation Plan on or before March 15, 2005.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 05-525. Filed for public inspection March 18, 2005, 9:00 a.m.] _______
1 Small natural gas companies may voluntarily ''opt in'' to Chapter 14. 66 Pa.C.S. § 1403.
2 We note that PGW has agreed to a one year moratorium on enforcement of the landlord/tenant lien provision where the customer is a tenant and not the owner. (See PGW Reply Comments, pp. 7-8.)
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