While it's correct that Chapter 56 and PUC policy restrict utilities' ability to shut off heat-related service from December through March for households that fall below 150 percent of the federal poverty level, utilities still have eight months to "get tougher" and pursue stringent policies to collect on their bad debt. These are the same regulations that other natural gas, electric (including PECO) and water utilities have successfully operated under since the late 1970s.
Statistics clearly show that the regulations, when followed correctly, do not impede a utility's ability to collect on accounts.
From 1997 to 2003, the percentage of gas customers in debt (excluding PGW) was down 11.6 percent, the percentage of dollars in debt was down 14.8 percent, and the percentage of dollars written off was down 7.1 percent. Even after the effects of last year's high gas bills, the trends are still positive, which indicates that our regulations work.
In addition, contrary to statements in some articles, there is no automatic restoration of service during winter. For example, electric and gas utilities terminated approximately 125,000 residential accounts for nonpayment in 2003. About 6,000 of these accounts remained off during this winter. Of those, over half were PGW accounts.
Nor is there a blanket prohibition against terminating accounts during winter months. Utilities can and do submit requests to the PUC to terminate residential accounts during that period. The PUC rules on these requests within 10 days. PGW, unlike some other utilities, did not submit a single request to terminate a delinquent customer this winter.
The Daily News also has been critical of payment arrangements that allow delinquent customers 10 or more years to pay off debts. Each payment arrangement is based on the facts of that account. In PGW's case, many of the customers have balances that PGW allowed to accrue over many years. These balances cannot be erased by agreements that set unrealistic payment terms. In fact, in many cases, the PUC must first determine if the balance is accurate, since the account histories often show that PGW had not read meters in four, eight or even 10 years. These balances were not caused by PUC regulations.
Since the PUC assumed jurisdiction over PGW three years ago, we have performed a management audit and approved a restructuring plan, both of which contained policy changes and recommendations intended to improve the company's financial health. We directed the company to hire an independent and experienced manager and to commit to operational and service improvements, including fixing its troubled billing system.
PGW's troubles were not created overnight, nor will they be solved overnight. PGW must make a more concentrated effort to collect on its delinquent accounts. Clearly, the PUC is helping with this effort, not hindering it. *
Tom Charles is manager of communications for the Public Utility Commission.