Peco requiring some to pay deposits New residential customers may have to fork over 2 months' estimated payments before the utility activates service.

Posted: May 18, 2002

Peco Energy Co. is requiring for the first time that certain new residential customers pay deposits before the Philadelphia utility activates service.

New customers who do not meet credit criteria set by state regulators have to pay Peco the estimated cost of two months' service up front. They need to have a satisfactory credit score, a utility payment history, or own property to avoid paying the deposit, which Peco began requiring April 22.

The policy will affect 10,000 to 15,000 customers per year. Peco said it had 300,000 delinquent accounts.

Peco, a unit of Chicago's Exelon Corp., said it expected to save $2 million per year as a result of the program. That would represent 0.3 percent of Peco's first-quarter revenue. Peco said it was attempting to reduce the $35 million to $70 million it loses each year from bad accounts. The deficit varies according to the weather's effect on electricity and natural-gas use.

The deposit requirement could hit low-income customers particularly hard, said Philip Bertocci, a Community Legal Services lawyer who represents low-income Philadelphia utility customers.

"Low-income people can't afford to tie up too much money . . . as a deposit," Bertocci said.

Peco spokesman Michael Wood said the utility would work with such customers on a case-by-case basis. First-time job holders have to pay the deposit or have someone co-sign the account application, just as with a loan application.

Peco said it could not say when customers would get their deposits back. Allentown-based PPL Corp., which serves 1.3 million customers and also requires a deposit for new accounts, refunds deposits after one year if customers make payments.

Peco serves 1.52 million electricity customers in a five-county Philadelphia area and 442,000 natural-gas customers outside the city.

Contact Benjamin Y. Lowe at 215-854-2453 or

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