Utilities Must Offer Written, Negotiable Payment Agreements Before Terminating Electric or Natural Gas Service

One of the basic and most important consumer protections in the Home Energy Fair Practices Act (HEFPA) is the opportunity for customers who fall behind in payments to avoid termination of natural gas or electric service by repaying their arrears in affordable installments, along with full payment of their current bills. Section 37 of the Public Service Law (PSL) requires utilities to offer a written Deferred Payment Agreement (DPA) with any notice of service termination for nonpayment.

Typically the utility proposes a DPA with a substantial down payment and substantial monthly payments. DPAs are required to be fair and equitable, however, and are negotiable. Public Service Commission (PSC) regulations require utilities to negotiate in good faith the terms of a DPA, based on the customer’s financial circumstances, to a minimum DPA downpayment of zero and monhly arrears payments of $10. If agreement cannot be reached, the PSC will adjudicate the terms.

If a customer breaks a DPA, service may be terminated. Sometimes the broken DPA can be renegotiated if a customer has had a change of circumstances since entering into a DPA for more than the minimum monthly payment. Also, it may be possible to negotiate reinstatement of a broken DPA with the utility or with the help of the PSC.

Recently, PULP was contacted by a local advocate trying to assist a frantic customer with a young child whose electric service had been terminated earlier in the week. As it turned out, the customer had broken a prior installment payment agreement that had been made with a utility over the telephone. That was not a written agreement signed by both the customer and the utility, containing the requisite information required by PSL Section 37.

The PSC has recognized that utilities and customers often enter into informal unwritten arrangements to repay arrears that do not meet the requirement of PSL 37 for a formal written DPA. In several decisions, the PSC has held that a customer who has broken an unwritten agreement to repay arrears is still eligible for a real, written DPA that satisfies the definition and requirements of Section 37.

We suggested to the advocate that she verify with the utility whether the customer had indeed broken a written DPA, and if not, to request a real written DPA and reinstatement of service, and if the utility refused to provide a DPA, to contact the PSC Hotline at 1-800-342-3355.

The PSC Hotline staff are authorized to order the reconnection, continuation or initiation of residential utility service when

  • a reasonable question regarding the circumstances of a termination, threatened termination, or denial of an application for service exists,
  • a dispute with regard to a utility charge or service is pending, or
  • the health and safety of a person is involved.

Thus, the advocate should be prepared to provide the PSC’s designee relevant information, stressing facts demonstrating the emergency and the existence of a reasonable question regarding the disputed utility actions.

Pin It

Leave a Reply