RG&E Tightening Collection Policies

Rochester Gas & Electric (RG&E) may be tightening its collection practices for customers in arrears who are threatened with termination of their electricity or natural gas service. An August 2006 news report indicated that the company in the past had restored service with a partial payment from the customer, without the customer having entered into a formal written deferred payment agreement (DPA). An October 2, 2006 news report indicates that a new policy is in effect that will require customers who do not pay arrears in full to enter into DPAs as a condition of service continuation.

Nothing has changed in the law governing situations where customers in arrears face possible termination of service for nonpayment. The Home Energy Fair Practices Act (HEFPA) implements New York State’s policy of continuous utility service for residential customers to advance the public health and welfare. See Candle Fires: A Symptom of “Rolling Blackouts” Affecting Low-Income Households.

HEFPA requires a utility to provide advance notice of termination and to offer customers in arrears the opportunity to pay them in installments. The utility typically offers the customer a “standard” repayment agreement: this involves a substantial “down payment” to defray part of the arrears and a schedule of monthly payments to pay the balance. The arrears payments must be made along with timely payment of bills for current service. When a DPA is in place, and payments are made on time, late payment charges cannot be assessed.

The “standard” DPA is really the first offer from the utility. Customers must be notified by the utility that they may negotiate the terms of a DPA – both the “down payment” and the monthly installment amount — based on their individual financial circumstances.

PSC regulations require utilities to bargain in good faith over the terms of DPAs to as little as nothing “down” and $10 per month toward arrears (a “minimum DPA”), depending on the customer’s ability to pay. Section 43(2) of HEFPA provides that if agreement cannot be reached customers may obtain a decision on the terms of a DPA from the Public Service Commission.

A customer who breaks a “minimum DPA” is then subject to termination of service. A customer who breaches a DPA for more than the minimum is subject to termination unless there has been a change of financial circumstances since entering into the agreement.

The HEFPA statute requires DPAs to be signed by both the company and the customer.

Over the years companies have entered into unwritten agreements with customers without the formality of a written DPA. A customer who breaks an unwritten promise to repay (typically made on the phone) should still be able to get a written DPA.

If customers cannot reach agreement on a DPA — or if there are other issues relating to denial or termination of electric or natural gas service, including medical emergencies — they may call the PSC Emergency HOTLINE, 1-800-342-3355 between 7:30 a.m. and 7:30 p.m . on business days for PSC staff assistance.

Customers who have exhausted their remedies under HEFPA with the utility or the PSC may be eligible for assistance under the Home Energy Assistance Program (HEAP). The HEAP program for 2006 – 2007 will open in November 2006. Other public assistance or a loan under section 131-s of the New York Social Services Law may be available from local departments of social services if a customer is threatened with termination of utility service, or if service has been terminated.

For further information, contact PULP or check PULP’s website Help Center.

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