Subchapter N. CREDIT AND DEPOSITS STANDARDS POLICY
PROCEDURES FOR APPLICANTS Sec.
56.281. Policy statement.
56.282. Credit standards.
56.283. Cash deposits; third-party guarantors.
56.284. Deposits for temporary service.
56.285. Payment of outstanding balance.
56.286. Written procedures.
56.287. General rule.
56.288. Payment period for deposits by applicants.
PROCEDURES FOR EXISTING CUSTOMERS
56.291. General rule.
56.292. Payment period for deposits by customers.
CASH DEPOSITS
56.301. Amount of cash deposit.
56.302. Deposit hold period and refund.
56.303. Application of deposit to bills.
56.304. Periodic review.
56.305. Refund statement.
56.306. Interest rate.
56.307. Application of interest.
Authority The provisions of this Subchapter N issued under the Public Utility Code, 66 Pa.C.S. § § 1401—1419, unless otherwise noted.
Source The provisions of this Subchapter N adopted October 7, 2011, effective October 8, 2011, 41 Pa.B. 5473, unless otherwise noted.
Cross References This subchapter cited in 52 Pa. Code § 56.1 (relating to statement of purpose and policy); 52 Pa. Code § 56.251 (relating to statement of purpose and policy); and 52 Pa. Code § 56.252 (relating to definitions).
PROCEDURES FOR APPLICANTS
§ 56.281. Policy statement.
An essential ingredient of the credit and deposit policies of each public utility shall be the equitable and nondiscriminatory application of those precepts to potential and actual customers throughout the service area without regard to the economic character of the area or any part thereof. Deposit policies must be based upon the credit risk of the individual applicant or customer rather than the credit history of the affected premises or the collective credit reputation or experience in the area in which the applicant or customer lives and without regard to race, age over 18 years of age, National origin, marital status, color, religious creed, ancestry, union membership, gender, sexual orientation, gender identity or expression, AIDS or HIV status, or disability.
Authority The provisions of this § 56.281 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.281 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359034).
§ 56.282. Credit standards.
A public utility shall provide residential service without requiring a deposit when the applicant satisfies one of the following requirements:
(1) Prior public utility payment history. The applicant has been a recipient of public utility service of a similar type within a period of 24 consecutive months preceding the date of the application and was primarily responsible for payment for the service, so long as:
(i) The average periodic bill for the service was equal to at least 50% of that estimated for new service.
(ii) The service of the applicant was not terminated for nonpayment during the last 12 consecutive months of that prior service.
(iii) The applicant does not have an unpaid balance from that prior service.
(2) Ownership of real property. The applicant owns or has entered into an agreement to purchase real property located in the area served by the public utility or is renting the applicant’s place of residence under a lease of 1 year or longer in duration, unless the applicant has an otherwise unsatisfactory credit history as a public utility customer within 2 years prior to the application for service.
(3) Credit information. The applicant provides information demonstrating that the applicant is not an unsatisfactory credit risk.
(i) The absence of prior credit history does not, of itself, indicate an unsatisfactory risk.
(ii) The public utility may request and consider information including:
(A) The name of the employer of the applicant.
(B) The place and length of employment.
(C) Residences during the previous 5 years.
(D) Letters of reference.
(E) Credit cards.
(F) Significant source of income other than from employment.
(iii) Public utilities shall take appropriate actions needed to ensure the privacy and confidentiality of identification information provided by their applicants and customers.
(4) Cash deposit prohibition. A public utility may not require a cash deposit from an applicant who is, based upon household income, confirmed to be eligible for a customer assistance program. An applicant is confirmed to be eligible for a customer assistance program by the public utility if the applicant provides income documents or other information attesting to his or her eligibility for State benefits based on household income eligibility requirements that are consistent with those of the public utility’s customer assistance programs.
Authority The provisions of this § 56.282 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.282 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial pages (359034) to (359035).
Cross References This section cited in 52 Pa. Code § 56.283 (relating to cash deposits; third-party guarantors); and 52 Pa. Code § 56.302 (relating to deposit hold period and refund).
§ 56.283. Cash deposits; third-party guarantors.
If an applicant does not establish credit under § 56.282 (relating to credit standards), the public utility shall provide residential service when one of the following requirements is satisfied:
(1) Cash deposit. The applicant posts a cash deposit.
(2) Third-party guarantor. The applicant furnishes a written guarantee from a responsible customer which, for the purposes of this section, means a customer who has or can establish credit, under § 56.282, to secure payment in an amount equal to that required for cash deposits.
(i) A guarantee must be in writing and state the terms of the guarantee.
(ii) The guarantor shall be discharged when the applicant has met the terms and conditions which apply under § § 56.302 and 56.303 (relating to deposit hold period and refund; and application of deposit to bills).
Authority The provisions of this § 56.283 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.283 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359035).
Cross References This section cited in 52 Pa. Code § 56.286 (relating to written procedures); and 52 Pa. Code § 56.302 (relating to deposit hold period and refund).
§ 56.284. Deposits for temporary service.
Deposits for applicants for temporary service may be required in accordance with § 53.82 (relating to deposits).
§ 56.285. Payment of outstanding balance.
A public utility may require, as a condition of the furnishing of residential service to an applicant, the payment of any outstanding residential account with the public utility which accrued within the past 4 years from the date of the service request for which the applicant is legally responsible and for which the applicant was billed properly. The 4-year limit does not apply if the balance includes amounts that the public utility was not aware of because of fraud or theft on the part of the applicant. An outstanding residential account with the public utility may be amortized over a reasonable period of time. Factors to be taken into account include the size of the unpaid balance, the ability of the applicant to pay, the payment history of the applicant and the length of time over which the bill accumulated. A public utility may not require, as a condition of the furnishing of residential service, payment for residential service previously furnished under an account in the name of a person other than the applicant unless a court, district justice or administrative agency has determined that the applicant is legally obligated to pay for the service previously furnished. Examples of situations include a separated spouse or a cotenant. This section does not affect the creditor rights and remedies of a public utility otherwise permitted by law.
Authority The provisions of this § 56.285 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.285 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial pages (359035) to (359036).
Cross References This section cited in 52 Pa. Code § 56.286 (relating to written procedures); and 52 Pa. Code § 56.373 (relating to time for filing an informal complaint).
§ 56.286. Written procedures.
A public utility shall establish written procedures for determining the credit status of an applicant. A public utility employee processing applications or determining the credit status of applicants shall be supplied with or have ready access to a copy of the written procedures of the public utility. The written procedures must specify that there are separate procedures and standards for victims with a protection from abuse order or a court order issued by a court of competent jurisdiction in this Commonwealth which provides clear evidence of domestic violence. The procedures must also specify that any applicant that is, based upon household income, confirmed to be eligible for a customer assistance program is not required to pay a deposit. A copy of these procedures shall be maintained on file in each of the business offices of the public utility and made available, upon request, for inspection by members of the public and the Commission and be included on the public utility’s web site.
(1) Reasons for denial of credit. If credit is denied, the public utility shall inform the applicant in writing of the reasons for the denial within 3 business days of the denial. This information may be provided electronically to the applicant with the applicant’s consent. If the public utility is requiring payment of an unpaid balance in accordance with § 56.285 (relating to payment of outstanding balance), the public utility shall specify in writing the amount of the unpaid balance, the dates during which the balance accrued, and the location and customer name at which the balance accrued. The statement must inform the applicant of the right to furnish a third-party guarantor in accordance with § 56.283 (relating to cash deposits; third-party guarantors) and the right to contact the Commission. The statement must include information informing victims of domestic violence with a protection from abuse order or a court order issued by a court of competent jurisdiction in this Commonwealth which provides clear evidence of domestic violence that more lenient credit and liability standards may be available. The statement must also inform the applicant that if he or she is, based upon household income, confirmed to be eligible for a customer assistance program, a deposit is not required. The public utility shall inform the applicant or customer of the procedures and documentation necessary to qualify for an exemption from a security deposit requirement.
(2) Informing applicants of procedures. Public utility personnel shall fully explain the credit and deposit procedures of the public utility to each customer or applicant for service.
(3) Third-party requests for service. Requests from third parties to establish public utility service on behalf of an applicant will not be honored until the public utility has verified the legitimacy of the request. Verification may be accomplished by any means appropriate to confirm that the applicant consents to service being established or that the third-party is authorized to act on the applicant’s behalf.
Authority The provisions of this § 56.286 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.286 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial pages (359036) to (359037).
§ 56.287. General rule.
Once an applicant’s application for service is accepted by the public utility, the public utility shall make a bona fide attempt to provide service within 3 business days, provided that the applicant has met all regulatory requirements. A longer time frame is permissible with the consent of the applicant. If the investigation and determination of credit status is expected to take or in fact takes longer than 3 business days commencing the date after the application is made, the public utility shall provide service pending completion of the investigation. If the public utility cannot provide service by the time frames specified in this section, the public utility shall inform the customer of this fact and provide a reasonable estimate of when service will be provided. These requirements do not apply to new service installations and service extensions that require construction of facilities to provide the public utility service.
Authority The provisions of this § 56.287 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.287 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359037).
§ 56.288. Payment period for deposits by applicants.
The due date for payment of a deposit or an installment payment toward a deposit, other than an initial installment or a deposit required as a condition for the reconnection of service under § 56.291(2) (relating to general rule) may not be less than 21 days from the date of mailing or service on the applicant of notification of the amount due. An applicant may elect to pay any required deposits in three installments: 50% payable upon the determination by the public utility that the deposit is required, 25% payable 30 days after the determination and 25% payable 60 days after the determination. A public utility shall advise an applicant of the option to pay the requested security deposit in installments at the time the deposit is requested. If the applicant chooses to pay the deposit in installments, installment payments must be paid in full by the due date. Failure to pay an installment by the due date is grounds for termination of service as provided in § 56.321 (relating to authorized termination of service). The applicant retains the option to pay the deposit amount in full anytime before the due date regardless of any deposit installments previously paid.
Authority The provisions of this § 56.288 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.288 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359037).
PROCEDURES FOR EXISTING CUSTOMERS
§ 56.291. General rule.
A public utility may require an existing customer to post a deposit to reestablish credit under the following circumstances:
(1) Delinquent accounts. Whenever a customer has been delinquent in the payment of any two consecutive bills or three or more bills within the preceding 12 months.
(i) Prior to requesting a deposit under this section, the public utility shall give the customer written notification of its intent to request a cash deposit if current and future bills continue to be paid after the due date.
(A) Notification must clearly indicate that a deposit is not required at this time but that if bills continue to be paid after the due date a deposit will be required.
(B) Notification may be mailed or delivered to the customer together with a bill for public utility service.
(C) Notification must set forth the address and phone number of the public utility office where complaints or questions may be registered.
(D) A subsequent request for deposit must clearly indicate that a customer should register any question or complaint about that matter prior to the date the deposit is due to avoid having service terminated pending resolution of a dispute. The request must also include the address and telephone number of the public utility office where questions or complaints may be registered.
(ii) Except in the case of adjustments to budget billing plans, a public utility may issue a notification or subsequent request for a deposit based, in whole or in part, on a delinquent account arising out of a make-up bill as defined in § 56.264 (relating to previously unbilled public utility service), under the following conditions:
(A) The public utility has complied with § 56.264. Compliance with a payment agreement by the customer discharges the delinquency and a notification or request for deposit may not thereafter be issued based on the make-up bill.
(B) If a make-up bill exceeds the otherwise normal estimated bill by at least 50% and if the customer makes payment in full after the bill is delinquent but before a notification of intent to request a deposit is given to the customer, a notification or request for deposit may not thereafter be issued based on the make-up bill.
(2) Condition to the reconnection of service. A public utility may require a deposit as a condition to reconnection of service following a termination.
(3) Failure to comply with payment agreement. A public utility may require a deposit, whether or not service has been terminated, when a customer fails to comply with a material term or condition of a payment agreement.
(4) Cash deposit prohibition. A public utility may not require a customer that, based upon household income, is confirmed to be eligible for a customer assistance program to provide a cash deposit. A customer is confirmed to be eligible for a customer assistance program by the public utility when the customer provides income documents or other information that he or she is eligible for State benefits based upon household income eligibility requirements that are consistent with those of the public utility’s customer assistance programs.
Authority The provisions of this § 56.291 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.291 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial pages (359037) to (359038).
Cross References This section cited in 52 Pa. Code § 56.288 (relating to payment period for deposits by applicants); 52 Pa. Code § 56.292 (relating to payment period for deposits by customers); 52 Pa. Code § 56.302 (relating to deposit hold period and refund); and 52 Pa. Code § 56.323 (relating to unauthorized termination of service).
§ 56.292. Payment period for deposits by customers.
The due date for payment of a deposit or any installment payment toward a deposit, other than a deposit required as a condition for the reconnection of service under § 56.291(2) (relating to general rule), may not be less than 21 days from the date of mailing or service on the customer of notification of the amount due. A customer may elect to pay a required deposit in three installments: 50% payable upon the determination by the public utility that the deposit is required, 25% payable 30 days after the determination and 25% payable 60 days after the determination. A public utility shall advise a customer of the option to pay the requested security deposit in installments at the time the deposit is requested. If the customer chooses to pay the deposit in installments, installment payments must be paid in full by the due date. Failure to pay an installment by the due date is grounds for termination of service as provided in § 56.321 (relating to authorized termination of service). The customer retains the option to pay the deposit amount in full before the due date regardless of any deposit installments previously paid.
Authority The provisions of this § 56.292 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.292 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359038).
CASH DEPOSITS
§ 56.301. Amount of cash deposit.
(a) Applicants. A public utility may not require a cash deposit from an applicant in excess of the average estimated bill of the applicant for a period equal to one billing period plus 1 additional month’s service, not to exceed 4 months in the case of water and wastewater utilities and 2 months in the case of gas, electric and steam heat utilities, with a minimum deposit of $5.
(b) Existing customer. For an existing customer, the cash deposit may not exceed the estimated charges for service based on the prior consumption of that customer for the class of service involved for a period equal to one average billing period plus 1 average month, not to exceed 4 months in the case of wastewater utilities and 2 months in the case of gas and steam heat utilities, with a minimum of $5.
(c) Adjustment of deposits. The amount of a cash deposit may be adjusted at the request of the customer or the public utility whenever the character or degree of the usage of the customer has materially changed or when it is clearly established that the character or degree of service will materially change in the immediate future.
Authority The provisions of this § 56.301 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.301 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial pages (359038) to (359039).
§ 56.302. Deposit hold period and refund.
A cash deposit shall be refunded under the following conditions:
(1) Termination or discontinuance of service. Upon termination or discontinuance of service, the public utility shall promptly apply the deposit of the customer, including accrued interest, to any outstanding balance for public utility service and refund or apply the remainder to the customer’s account. A transfer of service from one location to another within a service area may not be deemed discontinuance within the meaning of this chapter.
(2) Credit established. When a customer establishes credit under § 56.282 (relating to credit standards), the public utility shall refund or apply to the customer’s account, any cash deposit plus accrued interest.
(3) Third-party guarantor. When a customer substitutes a third-party guarantor in accordance with § 56.283(2) (relating to cash deposits; third-party guarantors), the public utility shall refund any cash deposit, plus accrued interest, up to the limits of the guarantee.
(4) Prompt payment of bills. After a customer has paid bills for service for any 12 consecutive months without having service terminated and without having paid a bill subsequent to the due date or other permissible period as stated in this chapter on more than two occasions, the public utility shall refund any cash deposit, plus accrued interest.
(5) Optional refund. At the option of the public utility, a cash deposit, including accrued interest, may be refunded in whole or in part, at any time earlier than the time stated in this section.
(6) A public utility shall refund a deposit, along with any applicable interest, within 60 days upon determining that the customer or applicant from whom a deposit was collected is not subject to a deposit under § 56.282 or § 56.291 (relating to general rule).
Authority The provisions of this § 56.302 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.302 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359039).
Cross References This section cited in 52 Pa. Code § 56.283 (relating to cash deposits; third-party guarantors); and 52 Pa. Code § 56.304 (relating to periodic review).
§ 56.303. Application of deposit to bills.
The customer may elect to have a deposit applied to reduce bills for public utility service or to receive a cash refund.
Authority The provisions of this § 56.303 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.303 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359040).
Cross References This section cited in 52 Pa. Code § 56.283 (relating to cash deposits; third-party guarantors); and 52 Pa. Code § 56.304 (relating to periodic review).
§ 56.304. Periodic review.
If a customer is not entitled to refund under § 56.302 (relating to deposit hold period and refund), the public utility shall review the account of the customer each succeeding billing period and make appropriate disposition of the deposit in accordance with § 56.302 and § 56.303 (relating to application of deposit to bills).
Authority The provisions of this § 56.304 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.304 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359040).
§ 56.305. Refund statement.
If a cash deposit is applied or refunded, the public utility shall mail or deliver to the customer a written statement showing the amount of the original deposit plus accrued interest, the application of the deposit to a bill which had previously accrued, the amount of unpaid bills liquidated by the deposit and the remaining balance.
Authority The provisions of this § 56.305 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.305 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359040).
§ 56.306. Interest rate.
The public utility shall accrue interest on the deposit until it is returned or credited.
(1) Interest shall be computed at the simple annual interest rate determined by the Secretary of Revenue for interest on the underpayment of tax under section 806 of The Fiscal Code (72 P.S. § 806).
(2) The interest rate in effect when deposit is required to be paid shall remain in effect until the date the deposit is refunded or credited, or December 31, whichever is later. A deposit initially accrues interest at the interest rate in effect at the time the deposit was required. This interest rate remains in effect until the end of the calendar year.
(3) On January 1 of each year, the new interest rate for that year will apply to the deposit. The new interest rate will be applied to the deposit for the calendar year starting January 1 until December 31 of that same year. Revised interest rates are calculated every subsequent January 1 and applied to the deposit until the deposit is refunded or applied to the account.
Authority The provisions of this § 56.306 amended under the Public Utility Code, 66 Pa.C.S. § § 501, 1301, 1401—1419, 1501 and 1509.
Source The provisions of this § 56.306 amended May 31, 2019, effective June 1, 2019, 49 Pa.B. 2815. Immediately preceding text appears at serial page (359040).
§ 56.307. Application of interest.
Interest shall be paid annually to the customer, or, at the option of either the utility or the customer, shall be applied to service bills.
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