NOTICES
PENNSYLVANIA PUBLIC UTILITY COMISSION
Insuring Consistent Application of 52 Pa. Code § 56.12(7) Equal Monthly Billing
[35 Pa.B. 6970] Public Meeting held
November 10, 2005Commissioners Present: Wendell F. Holland, Chairperson; James H. Cawley, Vice Chairperson; Bill Shane; Kim Pizzingrilli; Terrance J. Fitzpatrick
Insuring Consistent Application of 52 Pa. Code § 56.12(7) Equal Monthly Billing; Doc. No. M-00051925
Order By the Commission:
At the Public Meeting held on April 12, 1978, the Commission adopted a final Order that implemented Consumer Standards and Billing Practices for Residential Service, which is generically referred to as Chapter 56, 52 Pa. Code Ch. 56. In responding to comments related to equal monthly billing (budget billing), the Commission noted that:
As energy costs rise, consumer interest and interaction with the utility will increase. An equitable and uniform system for billing will minimize rather than create confusion.1The Commission's comments are as relevant now as they were then, and budget billing has become a key tool for customers to mitigate spikes in utility bills and for utilities to manage account receivables. Now is the time to ensure that utility budget billing programs optimize both the customers' and companies' ability to manage higher prices this winter.
Every utility budget billing program should allow new customers, and existing customers not previously enrolled in a budget billing program, to obtain the maximum benefits from the program, while benefiting utilities by reducing their exposure to uncollectible expenses. To accomplish this aim, there can be no restriction on customers' ability to avail themselves of budget billing procedures based upon a 10-, 11-, or 12-month past usage period.2 It is acceptable for an initial budget period to exceed 10, 11 or 12 months, but basing equal monthly billing on a usage period that averages less than 10 months violates the Commission's regulations and is therefore invalid. This means that when a customer enrolls in a budget billing program, the utility must use that customer's consumption from the previous 10-, 11-, or 12-month period when determining the customer's budget billing payment or base the budget on a valid estimate of potential use for a 10-, 11-, or 12- month period when the customer has no prior history. 52 Pa. Code § 56.12(7). Utilities are also permitted to review customer accounts a minimum of three times during the budget billing period and make adjustments as necessary.
Other elements of an acceptable budget billing program are:
* Budget billing must be available to all utility customers with residential end use irrespective of the rate the account is billed.3
* Based on well-established case history, budget billing must be the method by which customers in arrears pay current bills while liquidating the past due amounts owed the utility.4
* Budget accounts are to be routinely monitored and adjusted consistent with the Commission's regulations to prevent over or under collections to the extent possible.
* Any tariff provision that is inconsistent with the Commission's interpretation of its regulation is deemed null and void.5
Pursuant to Section 703(g) of the Public Utility Code, 66 Pa.C.S. § 703(g), the Commission solicits comments from all interested parties in response to the proposed interpretative rule regarding 52 Pa. Code § 56.12(7) set forth in this Order. In the Comments, the Commission would like feedback on whether the interpretative rule in this Order is clear or whether this action would be better undertaken by a policy statement
Therefore,
It Is Ordered That:
1. A copy of this Order be published in the Pennsylvania Bulletin.
2. Comments to the proposed interpretative rule be filed within ten (10) days of the entry date of this Order. In addition, comments shall be sent via email to Assistant Counsel Rhonda L. Daviston at rdaviston@state.pa.us and Daniel Mumford at dmumford@state.pa.us.
3. A copy of this Order be served on electric, gas, water, and steam heating companies, the Office of Consumer advocate, the Office of Small Business Advocate, the Office of Trial Staff, the Energy Association of Pennsylvania, and the Public Utility Law Project.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 05-2393. Filed for public inspection December 23, 2005, 9:00 a.m.] _______
1 76 P.R.M.D. 10--Consumer Standards and Billing Practices for Residential Service, entered May 2, 1978.
2 52 Pa. Code § 56.12(7) provides: ''Equal monthly billing. A gas, electric and steam heating utility shall provide its residential ratepayers with an optional billing procedure which averages estimated utility service costs over a 10-month, 11-month or 12-month period to eliminate, to the extent possible, seasonal fluctuations in utility bills. The utility shall review accounts at least three times during the optional billing period.''
3 See 52 Pa. Code § 56.1 (relating to definition of ''residential service'').
4 Mary Frayne v. PECO Energy Company, C-20029005 (Order entered September 10, 2003).
5 See 52 Pa. Code § 56.223 (relating to inconsistent tariff provisions).
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