Utility termination and collections rules must be enhanced to protect customers, OPC says in petition to state regulators
BALTIMORE – State regulators should update and revise rules intended to protect utility customers from having their utility service terminated or denied, the Office of People’s Counsel said in a petition filed today with the Public Service Commission. OPC’s proposed rule changes would end certain punitive utility payment practices and give customers more time to seek assistance when they have trouble paying their bills.
“It’s time to reduce the utilities’ broad ability to deny or terminate service or impose additional costs on utility customers,” Maryland People’s Counsel David S. Lapp said. “We need to minimize barriers for customers—particularly those who are low-income—who try to maintain, establish, or reestablish their essential utility services. Our proposed changes will increase transparency and standardize minimum arrearage and termination practices to prevent different outcomes for customers in similar situations and will give customers facing termination more time before service is terminated to resolve difficult situations.”
Dramatic increases in terminations from 2019 to 2023—Baltimore Gas & Electric had nearly 80,000 residential terminations in 2023—laid bare the need for comprehensive consumer protection reform, OPC’s petition points out. Terminations declined in 2024 from 2023 at BGE and some other utilities, as the Commission took action to temporarily increase summer termination notice periods and certain utilities voluntarily halted terminations amid exhaustion of bill assistance funding. Yet high levels of terminations are likely to continue, with per-person energy assistance funding dropping and as utility rates continue to rise—in some cases, significantly, as documented in OPC’s June 2024 rates report. Rates for gas customers will continue to rise significantly in the coming years absent a change in course, as documented in OPC’s gas spending report released last week. These circumstances are leaving many customers without sufficient help to pay unaffordable utility bills and pushed the number of calls to OPC’s Consumer Assistance Unit to a record number in Fiscal Year 2024.
The Commission recently voted to propose new summertime heat protections, following OPC’s June petition for emergency action to protect customers from shutoffs during soaring summer temperatures, and opened a docket to consider other changes. OPC’s supplemental petition asks the Commission to revisit numerous other regulations intended to protect customers having trouble paying their bills.
OPC’s filing highlights examples of customers experiencing issues that its proposed rule changes are intended to address. One example highlights a customer's reported termination affecting the home of a mother with a 3-month-old infant relying on electric-powered breathing equipment. Other examples illustrate policies that exacerbate customer affordability issues, such as requiring customers to pay large new security deposits in addition to outstanding bills to restore service—or even to pay new security deposits after late payments that don’t result in termination.
Among other rule changes, OPC’s petition asks the Commission to:
- Rein in punitive utility practices on late fees, deposits, and credit requirements for low-income customers. These fees often serve to penalize households that simply cannot afford to pay and have little to do with the administrative costs that utilities incur in trying to obtain payment.
- Limit the utilities’ ability to require customers to “reestablish” credit based on prior payment history or to terminate service for a failure to pay new deposit requirements. Regulations currently allow utilities to require an existing customer to pay a deposit based on a change in a customer’s circumstances. Rules also allow a utility to terminate service to a customer who has paid their bill but failed to pay an imposed deposit.
- Enhance and standardize minimum requirements for arrearage and collection practices to increase transparency and uniformity among utilities. Current regulations give utilities flexibility in establishing certain minimum requirements for these arrearage and collection “practices” or “timelines.” BGE’s policy states that “[a]rrearage notices vary by customer payment behavior. Some customers will receive a reminder and others will receive a turn-off notice.” OPC’s petition seeks a minimum 30-day termination notice period in most circumstances, to prohibit terminations for outstanding bills less than $500 (or $700 for a dual-service utility), and to require collections and termination information to be made available in a regulator-approved Customer Rights and Assistance Pamphlet.
“About a fifth of Maryland households face high energy burdens,” Lapp said. “With rising energy costs and decreased benefit amounts, the affordability crisis is mounting. While rule changes will not address the underlying issues, they will help more people retain utility service, reduce arbitrary terminations and collections practices, and ultimately help prevent extreme customer hardships.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
* * *
|
