Projo Biz Blog

At the urging of low-income advocates and a powerful state legislator, the Public Utilities Commission today agreed to lower the down payment needed to restore utility service for customers who lost gas or electricity service because of non-payment.

The two commissioners at the open meeting this morning, Elia Germani and Mary Bray, voted to temporarily amend the rules so that those without service could have it restored by paying as little as 10 percent of an overdue balance. The rules normally require a down payment of at least 25 percent. The third commissioner, Robert Holbrook, was not present.

The ruling is a victory for the George Wiley Center of Pawtucket, an agency that lobbies on behalf of low-income families. The center had initiated the petition, which sought to relax the rules, in July.

The decision comes at a time of unusually high energy bills and predictions that this winter will be even more expensive than last year's record-breaker.

Yesterday's decision did not grant a flat 10 percent for everyone, as the George Wiley center had sought. Instead, the PUC established three down payment percentages, depending on a customer's back bill.

Those who owe under $1,000 will have to pay 20 percent and agree to pay off the rest over a 12-month period; those who owe $1,000 to $2,499 will have to pay 15 percent down, and pay of the rest over a 24-month period. Those who owe $2,500 or more can have service restored with a 10 percent down-payment. The remaining balance would have to be paid over 36 months.

The new payment terms apply to all customers, not just those who are considered "low income."

Normally, a customer would have to pay between 25 percent and 50 percent of the back balance to have service restored. The level of down payment is dependent upon the customer's past payment history, rather than the amount due. A customer who has never broken a payment agreement would be required to pay 25 percent. Those who have broken several agreements would have to pay 50 percent.

The changes are temporary -- they are in effect only until Dec. 1.

Last week, Senate President Joseph A. Montalbano, wrote to the PUC and suggested a three-tier down payment schedule similar to the one enacted yesterday.

"Today's ruling ensures Rhode Islanders have the utilities they need to survive the winter months while affording them some additional flexibility in getting their accounts in order," Montalbano said in a statement yesterday.

The decision will have several impacts. First, it should make it easier for those currently without utility service to have it restored. As of Aug. 31, there were 3,768 electric customers and 3,972 gas customers who remained without service.

Secondly, it will allow the monies the state receives through the federal Low Income Home Energy Assistance Program, or LIHEAP, to stretch further. Part of the LIHEAP money is used for "crisis grants" which go toward paying the back bill of a customer in order to get service restored. Now, more money can be directed to other types of heating assistance.

And lastly, the decision will likely mean that National Grid will have to write off more "bad debt." National Grid said that would be the result of a less flexible plan that the company had recommended. Bad debt is money that the utility company cannot collect from customers. Those debts are then passed along to all customers in the form of slightly higher utility rates.

-- Journal staff writer Timothy C. Barmann

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