[35 Pa.B. 5338]
[Continued from previous Web Page]
EAP submits that a notice should inform the customer that to avoid termination the customer must pay the specified overdue amount plus amounts reflected in any subsequent, undisputed bills which become due before the actual date of termination. The notice should also describe all additional reconnection fees, deposits, and other costs that may arise if termination occurs. 52 Pa. Code § 56.2.
PGW submits that utilities have the option of including on the 10-day notice not only the current amount in arrears but also language indicating that avoidance of termination will require payment of any other undisputed, billed and delinquent charges outstanding prior to the actual date of termination. According to PGW, any restriction on its ability to demand payment of the entire outstanding balance would cause significant and unnecessary additional expense to the Company.
PECO Energy submits that the amount listed in the termination notice will be the amount required to avoid a pending termination. Since additional amounts may become delinquent after a termination notice is issued, a customer may be subject to collection immediately following the satisfaction of a termination notice. However, a sufficient notice of the subsequent delinquency will be provided prior to termination to allow the customer to satisfy the remaining delinquency and avoid termination.
Simply put, the OCA states that when a termination notice is issued, an arrearage amount should be listed on the notice and this is the amount that the customer is required to pay to stay the termination. Given that termination notices are now effective for 60 days, it is possible that additional arrearages could accrue, but the customer has been provided no notice of these additional arrearages or any opportunity to dispute these additional arrearages.
The OCA submits that the customer can only be required to pay the amount of the arrearages listed on the termination notice (assuming no dispute as to this amount) to stop a termination. In other words, a customer who pays the amount listed on the termination notice, or enters a payment agreement regarding that amount, has satisfied the requirements for resolving the termination notice.
The CLS position on this issue is that the notice of termination under § 1406(b)(1) does not authorize a utility to require a customer to pay more than the precise dollar amount(s) listed on the written termination notice in order to avoid termination.
CLS explains that this provision does not require a change in Chapter 56 since under Chapter 56, due process requires that a termination notice must provide an ''itemized statement of accounts currently due, including any required deposit.'' The notice must also include a statement that a ''specific reconnection fee will be required to have service restored, after it has been terminated, if a reconnection fee is a part of the tariff of the utility on file with the Commission.'' 52 Pa. Code § 56.2 (Definitions. Notice or termination notice).
With respect to the amount required to avoid a pending termination, we agree with the comments of PECO Energy, OCA and CLS that the specified overdue amount listed on the notice is the amount that must be addressed to avoid termination of service. As noted by PECO Energy, any additional amounts that become delinquent after a termination notice is issued are subject to collection immediately following the satisfaction of a termination notice after sufficient notice of the subsequent delinquency is provided prior to termination to allow the customer to satisfy the remaining delinquency and avoid termination. However, if service is terminated, the post-termination notice may inform the affected customer of the total outstanding balance that must be addressed for reconnection of service pursuant to § 1407(c).
6. Clarification as to whether winter terminations are authorized under § 1406(c)(1) or § 1406(e) when a utility receives a dishonorable tender of payment (§ 1406(h)).
The OCA explains that under § 1406(h) a utility is permitted to terminate service, without further notice, for a dishonorable tender of payment by the customer after the customer received an initial termination notice. The OCA submits, however, that § 1406(h) does not permit termination in the winter without appropriate notice, and it does not permit termination in the winter of those customers who are not otherwise subject to winter termination.
More specifically, the OCA maintains that termination for dishonorable tender of payment under § 1406(h) cannot proceed in the winter for customers whose household income is at or below 250% of the FPL or who otherwise qualify for protection from winter termination. However, the OCA acknowledges that as to customers whose income is above 250% of the FPL, the winter termination for dishonorable tender of payment can proceed, but it must be done in accordance with the winter termination procedures contained in § 1406(b)(1)(iii) which provides as follows:During the months of December through March, unless personal contact has been made with the customer or responsible adult by personally visiting the customer's residence, the public utility shall, within 48 hours of the scheduled date of termination, post a notice of the proposed termination at the service location.
Moreover, the OCA believes that this essential safety precaution is not overridden by § 1406(h), since this subsection of § 1406 does not discuss winter termination and is not a permitted reason for winter termination in the stated exceptions. In fact, the OCA reasons that while Chapter 14 does not allow the Commission to require additional actions regarding notice for winter termination, the basic winter termination notice does apply. The OCA explains that the Commission should clearly state that applicable notice procedures must be fully followed before any winter termination.
CLS believes that Chapter 14 does not authorize winter termination of service to residential households on the sole ground that the utility has received a bad check or a credit or debit card which has been invalidated. CLS states that a customer whose service may not be terminated in the winter period due to household income level, household composition, payment history or medical certification, as set forth in § 1406(e), may not be terminated for use of a bad check or credit/debit card.
The basis of CLS' position is that § 1406(h) sets forth procedures for termination of service to customers who have paid a utility bill by check or credit/debit card after receiving a termination notice. However, paying a utility with a check which is subsequently dishonored, or with a credit/debit card which is not valid is not one of the actions included in the four § 1406(c)(1) exceptions to the bar on winter terminations for lower income customers. Moreover, CLS emphasizes that the acts identified in § 1406(h) justifying termination without further notice are not in any way comparable to those set forth in § 1406(c)(1).
We have previously concluded under Issue #3 that, if the actions set forth at § 1406(h) were intended to be included as grounds for immediate termination without notice, then § 1406(c)(1) would have incorporated § 1406(h) in its list of actions warranting immediate termination. Finding that dishonorable tender of payment is not included, we will not expand the list contained in § 1406(c)(1) by allowing immediate termination for actions covered under § 1406(h). We also note that § 1406(h) contains language that clearly shows that it is intended to be applied after a utility has provided notice of termination and the process is interrupted by a dishonorable payment. Finally, as also noted previously, § 56.94, combined with § 1406(h), clearly provides utilities with the tools it needs to prevent customers from using multiple bad checks to either repeatedly prevent termination or restore service.
With respect to whether winter terminations are authorized under § 1406(e) when a utility receives a dishonorable tender of payment (§ 1406(h)), we find the process for completing the termination depends on the household income. We agree with the OCA that, pursuant to § 1406(e)(1), before termination can occur to a household at or below the low-income categories listed at § 1406(e)(1), specific Commission authorization is required. However, for households that are above the protected low-income categories listed at § 1406(e)(1), the winter termination for dishonorable tender of payment can proceed, but must be performed in accordance with the winter termination procedures, including application of the 48-hour notice under § 1406(b)(1)(iii) if personal contact was not successful. In instances where all appropriate notices have been provided during the winter to a household whose income is above the protected low-income categories listed at § 1406(e)(1), termination may proceed without additional notice through application of § 1406(h). We remind utilities that there are instances where a dishonorable payment is not the fault of the customer and, in such instances, the utility must reconnect service in a timely manner pursuant to the applicable subsection at § 1407(b).
7. Clarification as to the Chapter 56 medical certification provisions that apply for implementation of § 1406(f) and § 1406(e)(2)(iii).
PGW contends that Chapter 14 supersedes all inconsistent requirements, including the inconsistent portions of the sections of Chapter 56 listed in Section 4 of the Act. According to PGW, § 1406 endorses the continuation of the Chapter's medical certification procedures, except for only one change relating to ''nurse practitioners.'' Otherwise, § 1406 provides that ''the medical certification procedures shall be implemented in accordance with Commission regulation,'' namely, existing Chapter 56 regulations. Therefore, Chapter 56 medical certification procedures remain in effect.
The OCA recommends that the Commission should direct all utilities to follow the existing Chapter 56 medical certification regulations, with the addition of a nurse practitioner as a person who can provide a medical certificate. Furthermore, the Commission can then undertake a timely review of its procedures and the requirements of Chapter 14 to determine if other changes are necessary.
CLS submits that the Commission should affirm that § 56.114 has been superseded as inconsistent with the absolute prohibition in Chapter 14 § 1406(f)8 and § 1407(b)(1)9 on termination or refusal to reconnect service to customers experiencing medical emergencies and does not, as some utilities claim, impose a maximum time limit on the duration of a medical certification of 90 days either for a single medical emergency, or for the lifetime of the customer. Furthermore, CLS states that the Commission should clearly distinguish that medical certificate payment arrangements are to be entered into by companies pursuant to the good faith negotiation process at § 56.97 and may be reviewed by the Commission in the event of a dispute concerning adherence to § 56.97. CLS also contends that companies should not be permitted to implement a medical certification process which impedes its legitimate use by creating undue burdens such as requiring physicians to use only a utility form, or requiring physicians to include information not spelled out in § 1406(f).
In promulgating policy regarding the implementation of the medical certification sections, CLS requests that the Commission adopt a policy whereby customers and their household members with chronic and terminal illness receiving service under a medical certification need not file medical certifications on a monthly basis, but may file such certificates every 6 months or annually.
In regard to application of the medical certification procedures at 52 Pa. Code, §§ 56.111--56.118, we agree with the consensus of the parties that the most substantive change made in Chapter 14 to the Chapter 56 medical certification procedures is the addition at § 1406(f) of ''nurse practitioner'' as one of the types of professionals qualified to provide a medical certification. However, we do not agree with the consensus that other Chapter 56 medical certification requirements have not been superseded by Chapter 14. We note that Section 4 of Act 201 lists all but one of the Chapter 56 medical certification provisions as possibly containing requirements inconsistent with Chapter 14. To date, we have identified one provision that is clearly inconsistent with Chapter 14--§ 56.115.
In regard to § 56.115, Chapter 14 at § 1407(b)(1) requires utilities to restore service ''within 24 hours'' upon receipt of a medical certification whereas § 56.115 provides for restoration ''before the end of the next working day.'' Given the language at § 1407(b)(1), utilities must revise their procedures to ensure that restorations upon receipt of a medical certification occur within 24 hours.
We are also aware that there are some interpretational issues relating to application of these Chapter 56 provisions. CLS raises several and we will address these in the instant order. More generally, as all parties develop more experience with the implementation of Chapter 14, it may be necessary to determine if other changes are necessary to ensure that the Chapter 56 medical certification provisions are not inconsistent with Chapter 14. We also anticipate that the Chapter 56 medical certification provisions will be thoroughly reviewed when the Commission amends Chapter 56 pursuant to Section 6 of Act 201.
With respect to CLS' assertion that Section 56.114 has been superseded as inconsistent with the absolute prohibition in Chapter 14 §§ 1406(f) and 1407(b)(1), we disagree. As specifically stated at § 1406(f), ''The medical certification procedures shall be implemented in accordance with Commission regulations.'' Section 56.114 is one of those regulations and, therefore, the length of postponement and renewal standards remain in effect.
Regarding CLS' request that the Commission clearly distinguish that medical certificate payment arrangements are to be entered into by companies pursuant to § 56.97 and may be reviewed by the Commission in the event of a dispute concerning adherence to § 56.97, we agree that application of the good faith negotiation process at § 56.97(b) is the appropriate method for fulfillment of the customer's duty at § 56.116 to equitably arrange to make payment on all bills. Moreover, a customer may file a payment dispute about a utility's application of § 56.97(b) and the Commission is authorized under § 1405(a) to investigate such complaints.
Finally, concerning CLS' contention that companies should not be permitted to implement a medical certification process which impedes its legitimate use by creating undue burdens such as requiring physicians to use only a utility form, or requiring physicians to include information not spelled out in § 1406(f), Section 56.113 addresses these concerns. Section 56.113 sets forth the specific information that must be included in a medical certification. Utilities should limit their request for medical certification information to the information requirements at § 56.113. Moreover, as long as a physician or nurse practitioner provides the information at § 56.113(1) through (5) in written form, it constitutes a valid medical certification. With respect to the issue of requiring physicians to use only a utility form, Section 1406(f) indicates that a ''letter'' from the physician is all that is necessary. A utility may certainly provide a standard form to help ensure that complete information is provided by the physician or nurse practitioner, but failure on the part of a physician to use the form does not constitute a legitimate reason to reject a medical certification.
8. Application of post-termination notice provision at § 1406(c)(2).
Under § 1406(c)(1)(ii), CLS explains that Chapter 14 has added an additional ground for service termination without notice to those already existing under Chapter 56--that additional ground is termination for ''fraud or material misrepresentation of the customer's identity for the purpose of obtaining service.'' CLS explains further that § 1406(c)(2)10 requires that a utility make a good faith attempt to provide a post-termination notice in these circumstances ''to the customer or a responsible person at the affected premises.'' CLS submits that termination without prior notice does not allow the customer accused of fraud or misrepresentation concerning identity to present the customer's side of the story before the utility has committed to a particular position and terminate service.
Therefore, there should be heightened post-termination protections where the post-termination notice should inform customers in detail of the alleged facts underlying the conclusion that fraud or material misrepresentation has been committed and customers terminated for fraud or misrepresentation should be provided the opportunity to take an expedited appeal to the Commission.
With respect to the issue of providing a post-termination notice, we believe two clarifications will ensure proper implementation of the Chapter 14 requirements. First, the requirement at § 56.95 to provide post-termination notice subsequent to termination of service is not inconsistent with any provision under Chapter 14 and should continue to be provided since it is to the benefit of all parties that customers receive information relating to service restoration. Second, with respect to CLS' recommendation that there should be heightened post-termination protections where the post-termination notice should inform customers in detail of the alleged facts underlying the conclusion that fraud or material misrepresentation has been committed, we agree that the post-termination notice in such instances should provide adequate information about the reason why the utility terminated service without prior notice so that the customer or occupant understands why the utility terminated service. When parties submit their sample post-termination notices for Commission staff review (See Issue #2 above), we welcome any suggested wording for conveying the grounds at § 1406(c)(1), particularly subsection (ii) relating to fraud or material misrepresentation.
9. Application of Section 1407 in terms of requiring any up-front payments to restore service.
PGW agrees with EAP that there is nothing in Chapter 14 which precludes requiring an up-front payment as part of the amount a terminated customer needs to pay to be reinstated. PGW believes that existing BCS reconnection guidelines, which require up-front payments, continue to be in force since there is nothing in Chapter 14 which supersedes such requirements.
The OCA states that except for customers whose income exceeds 300% of the Federal Poverty Level (FPL) and have not experienced a ''life event'' or have defaulted on two or more payment agreements, no up-front payment can be required to restore service. 66 Pa.C.S. § 1407(c)(2)(i).11 In addition, the OCA explains that for customers with incomes at or below 300% of the FPL, the utility may only require full payment of any reconnection fees and may also require repayment of the outstanding balance over 12 months or 24 months depending on income level. Finally, although the utility may require a deposit, the customer has up to 90 days to pay the deposit. 66 Pa.C.S. § 1404(h).
The OCA submits that the utility, however, is not authorized to charge any additional up-front payment in order to permit reconnection. The OCA argues that Chapter 14 does not authorize an up-front payment over and above the reconnection fee, deposit, and payment balance installments specified in the Act.
According to PECO Energy, § 1407 provides ample guidance regarding what may be required by a utility to restore service and, where payment arrangements are permitted, there is value to the customer in requiring a larger initial payment and reducing the arrears to be paid over the remainder of the payment period - customers will be less likely to default on a payment agreement with lower monthly payments and, therefore, less likely to be subject to the more stringent restoration requirements for customers who have defaulted on two or more agreements.
CLS argues that Chapter 14 has provided utilities with the right to demand as a condition of restoration the full amount of the reconnection fee and a deposit equal to 1/6 of the annual bill as a condition of restoration of service. In addition, CLS points out that § 1407 authorizes utilities to require that customers with household incomes exceeding 150% FPL make equal monthly payments sufficient to pay the outstanding balance over twelve months-customers with household income of 150% FPL and below may be required to pay the outstanding balance in equal monthly payments over 24 months.
With respect to the application of Section 1407(c) in terms of requiring any up-front payments to restore service, we agree with PGW and EAP that there is nothing in Chapter 14 which precludes requiring an up-front payment, but disagree that the up-front payment may be any amount that the utility decides is appropriate. We believe the payment requirements at § 1407(c) are clear, and vary depending on household size and income, and whether or not a customer has broken prior agreements.
If a customer or applicant's household income exceeds 300% of the FPL and the customer is not experiencing a ''life event,'' a utility may, pursuant to § 1407(c)(2)(i), require an up-front payment as high as the amount of the total outstanding balance.
If a customer or applicant's household income exceeds 300% of the FPL and the customer is experiencing a ''life event,'' a utility may, pursuant to § 1407(c)(2)(i), require an up-front payment in the amount of one-third of the total outstanding balance, with the second payment due the second month, and the final payment due the third month.
If a customer or applicant's household income exceeds 150% of the FPL but is not greater than 300% of the FPL, a utility may, pursuant to § 1407(c)(2)(ii), require an up-front payment in the amount of one-twelfth of the total outstanding balance, with the second payment due the second month, and subsequent payments of one-twelfth due each succeeding month until the final payment of one-twelfth due on month 12.
If a customer or applicant's household income does not exceed 150% of the FPL, a utility may, pursuant to § 1407(c)(2)(iii), require an up-front payment in the amount of one-twenty fourth of the total outstanding balance, with the second payment due the second month, and subsequent payments of one-twenty fourth due each succeeding month until the final payment of one-twenty fourth due on month 24.
We believe the clarifications noted above reflect adherence to the language at § 1407(c), as well as the apparent intent that customers with differing circumstances require different time frames to make payments. With respect to PGW's assertion that the pre-Chapter 14 BCS reconnection guidelines, which require up-front payments, continue to be in force, we disagree. The pre-Chapter 14 BCS guidelines that PGW refers to were based on waiving security deposits in most instances for customers at or below 300% of the FPL. Regarding PECO's contention that there is value to the customer in requiring a larger initial payment because it reduces the arrears to be paid over the remainder of the payment period, we see little value in lowering subsequent monthly payments if a customer can't afford a large initial up-front payment, plus a reconnection fee, plus 50% of a deposit. Utilities should help reduce the amount of monthly payments by adhering to the policy expressed at § 1402(3) and increasing timely collections. If a utility increases timely collections, the outstanding amount will be lower and this, in turn, will result in lower monthly payments when applying the formulas at § 1407(c).
10. Clarification as to whether CAP-related disputes require ''stays'' on termination pending resolution.
PGW supports EAP's position that complaints filed by CAP customers which complain only about the customer's ability to pay, or which request a ''new'' payment agreement should not be accepted.
The OCA agrees that Chapter 14 does not permit payment agreements for CAP customers who are behind on their bills, but submits that Chapter 14 does not deny a CAP customer the right to raise other issues or questions.
According to the OCA, customers being served through CAPs may have disputes regarding their service or their participation in the CAP that go beyond questions of payment agreements and CAP customers must be permitted to raise these issues before the Commission and stay of termination should be ordered until the dispute is resolved.
CLS argues that there is no basis in Chapter 14 for excluding CAP participants from the protection of the stay when those participants file informal and formal complaints with the Commission concerning matters which the Commission may decide. CLS maintains that § 1405(c) only bars the Commission from negotiating or approving ''payment agreements'' for CAP participants as ''Customer Assistance Program rates shall be timely paid and shall not be the subject of payment agreements negotiated or approved by the Commission.'' However, CLS states nothing in this provision bars the Commission from reviewing many CAP-related matters, including but not limited to, billing disputes where participants claim they have not received credit for payments made, have received high bills due to meter or meter reading problems, have been charged a CAP rate which is not the appropriate one for a household with their income or type of service, or that the CAP rate charged to them does not meet the Commission's affordability standards when applied to them.
Finally, CLS submits that there is no basis for the contention that Chapter 14 limits the applicability of the automatic stay for matters that the Commission may consider-the Act contains no language which alters the Chapter 56 rule that the filing of an informal complaint operates as a stay of termination pending resolution of the complaint. 52 Pa. Code §§ 56.141(2); 56.174(3).
All parties agree that Chapter 14 at § 1405(c) prohibits the Commission from establishing payment agreements for customers participating in a company CAP. Some parties correctly note that CAP participants can seek Commission intervention for other legitimate reasons such as the following: complaints about the accuracy of meter readings; allegations that the customer's CAP budget was inappropriately increased; allegations that the customer has been charged a CAP rate which is not the appropriate one for a household with their income or type of service; allegations that the customer was improperly removed from CAP or that CAP eligibility was denied; allegations that the customer has not been credited for all payments made, and complaints about the utility's application of payments including application of energy assistance grants.
These are disputes that are unrelated to the prohibition at § 1405 (c) that the Commission not establish a payment agreement for CAP participants. Therefore, utilities are required to apply § 56.141 in response to such disputes, i.e., utilities must place a ''stay'' on termination activity pending completion of the dispute pursuant to § 56.141(2). Moreover, pursuant to § 56.141(2), the complainant retains the obligation to pay undisputed amounts pending resolution of the dispute.
II. Payment Arrangements (PARS)
1. Clarification of Commission standards regarding the amount of any up-front payment in the application of § 1405 (Payment agreements).
Sections 1405(a) and (b) provide the rules regarding payment agreements. Section 1405(b), in particular, specified the length of time that payment agreements can extend for customers with various income levels. The OCA notes that § 1405(a) and (b) are silent on the issue of providing an up-front payment on the outstanding balance as part of a payment agreement. Moreover, the definition of payment agreement also does not include an up-front payment of the outstanding balance.
In regard to the amount of any up-front payment a utility may require in the application of § 1405(a), the Chapter 14 Implementation Order entered March 4, 2005, at M-00041802F0002, addressed this issue. That Order clarified that § 56.97(b) is not inconsistent with Chapter 14 and therefore remains fully in effect (Chapter 14 Implementation Order, p.14). We also noted that the obligations relating to negotiating payment agreements imposed by § 56.97(b) are general and flexible in nature and do not impose strict formulas or payment terms requirements. This flexibility translates into the ability on the part of utilities to require up-front payments if a utility, after considering all appropriate factors, believes an up-front payment is appropriate.
With respect to the Commission's obligations under § 1405 when making payment agreements, we note that the BCS, with the concurrence of the Commission, established internal procedures pursuant to § 56.211 to implement the directions at § 1405(b) for establishing payment agreements. These procedures do not require up-front payments because application of the formulas under § 1405(b) often result in payment terms that will be difficult enough for the customer to maintain without imposing any additional requirements such as up-front payments. Depending on the size of the outstanding balance, many customers, particularly those whose household income falls below 250% of the FPL, will be required to pay a significant percentage of their gross monthly income to keep the mandated agreement. Many of these households are ineligible for participation in a CAP, as well as ineligible for federal energy assistance grants because their income is greater than 135% of the FPL. Application of the formulas at § 1405(b) may result in some customers paying as much as 20% of their gross monthly income each month to keep the terms of a § 1405(b) agreement. By comparison, the US Department of Housing and Urban Development (HUD) in its Energy Desk Book of HUD Programs reports on page 3 that a median income household has an average energy burden of 4% of gross monthly income (http://www.huduser.org/Publications/PDF/energybook.pdf). Clearly, the payment terms that must be established pursuant to application of § 1405(b)(2) will, in most instances, be well beyond the 4% average reported by HUD, and will be difficult enough for the customer to maintain without imposing any additional requirements such as up-front payments. Since our intent is to respond to payment agreement requests by making the most reasonable payment terms within the limits established by Chapter 14 to ensure that utilities receive payment for service rendered, we hereby clarify that we will not impose up-front payments in the Commission's application of § 1405(b).
2. Clarification of § 1405(d) as to whether a payment agreement counts as a ''second or subsequent'' payment agreement if the customer or applicant had previously made all payments due under the previous agreement(s).
The OCA submits that the § 1405(d)12 prohibition against the Commission ordering a second or subsequent payment agreement if a customer has defaulted on a previous payment agreement does not address or apply to a customer who has satisfied some prior payment agreement. The OCA submits that reliance on § 1405(d) to deny a customer a payment agreement simply because at some time, years or even decades earlier, the customer has entered into and paid off a prior payment agreement is completely without merit. According to the OCA, § 1405(d) applies only to a situation where a payment agreement has been defaulted on.
The OCA explains that § 1405(d) is intended to apply to a situation where the customer has a current payment agreement on an outstanding balance and is in default on that payment agreement - it is illogical and indeed inconceivable that the intent of this section was to limit a customer to one payment agreement per lifetime. The OCA contends that where previous payment agreements are completed and the outstanding balance is wholly unrelated to the balance on which the utility now seeks a payment agreement, § 1405(d) does not, and cannot serve as a bar.
EAP contends that the statute is clear and that if a customer has timely paid all payments under a payment agreement, another payment agreement afterward on a new delinquency may be established by the Commission through application of § 1405(b). PGW, Aqua, and PECO Energy express opinions that essentially mirror EAP's comments.
We agree with the consensus of the parties and clarify that where previous payment agreements are completed as a result of the customer making payments sufficient to retire the outstanding balance that was the subject of the agreement, and this prior outstanding balance is wholly unrelated to the balance on which the customer now seeks a payment agreement, this request for payment terms is properly viewed as a request for an initial agreement.
3. Clarification as to whether a customer payment sufficient to catch-up on the terms of a payment agreement restores that payment agreement, thereby eliminating termination grounds for failure to comply with the material terms of a payment agreement.
PGW concurs with EAP arguing that, as a matter of law, § 1406(a)(2) gives utilities the right to terminate a customer even if he/she ''cures'' a payment agreement violation or catches-up in his/her payments. However, PGW, in its discretion, presently intends to permit a customer to ''cure'' a payment agreement violation and to refrain from termination activity in such an instance.
CLS states that Chapter 14 has not abrogated the absolute right of a customer who has defaulted under a payment agreement to avoid termination by curing the default prior to termination.
While we agree with PGW and EAP that Section 1406(a)(2) lists ''failure to comply with the material terms of a payment agreement'' as authorized grounds for termination, we do not agree that the customer cannot eliminate this ground for termination by paying an amount sufficient to catch-up on the terms of a payment agreement. As stated publicly several times by EAP, as well as in its written comments, the last resort of a utility is to terminate service. EAP also notes that ''utilities would prefer to work with their customers to collect payment, than to become embroiled in complaint procedures.'' We agree and clarify that, while a utility has every right to initiate the termination process and to terminate service if necessary for failure to comply with the material terms of a payment agreement, an available method for eliminating the grounds for termination is to pay an amount sufficient to catch-up on the terms of a payment agreement. Clearly, once the catch-up payment is made, authorized grounds for termination no longer exist.
4. Clarification of the appropriate application of LIHEAP CASH and CRISIS grants to CAP accounts.
PULP submits that, at a minimum, elemental due process requires review by the Commission in each case in which an individual, after consulting with the utility, disputes how a LIHEAP payment was applied. Furthermore, any customer, including those participating in a CAP, should be able to question whether the payment was properly applied pursuant to the relevant rules and procedures governing the application of LIHEAP payments. More to the point, PULP believes that any attempt by the utility industry to designate itself as the sole, absolute, and infallible arbiter regarding the application of LIHEAP grants should be clearly denied. Moreover, CAP customers obtain a number of due process rights concerning their eligibility into the program and a utility's actions, in applying each of the program design elements enumerated in the CAP Policy Statement, are subject to Commission review.
PULP asserts that the posting and application of the manner in which LIHEAP benefits are treated in CAP situations is not subject to one single, absolute and simple rule. PULP believes that contrary to the general policy, a LIHEAP grant may and should be used to reduce a customer's current CAP payment if the CAP minimum payment is calculated to exceed 17% of the household's income. 52 Pa. Code § 69.265(9)(ii). In such a situation, PULP explains that the customer and the utility may disagree about any of a number of factors such as the calculation of household income or the placement of the customer in the correct CAP tier. PULP submits that in each of these situations, as well as others, it is necessary to maintain a policy of Commission review.
CLS contends that the Commission in each case in which an individual disputes how a LIHEAP payment was applied should determine whether or not the payment was properly applied pursuant to the relevant rules and procedures governing application of LIHEAP payments by that utility.
EAP submits that the Commission has determined that the appropriate use of energy assistance funds is to apply those dollars in the following sequence: (1) to reduce any arrearage; (2) to pay the current bill; (3) to reduce a monthly bill; and, (4) to be applied as a credit toward future bills. Leslie Smith v. Columbia, C-00946118 (Order entered August 17, 1995). EAP also submits that LIHEAP crisis grants are applied to eliminating the crisis caused by the termination notice.
With respect to the issue of the appropriate application of LIHEAP CASH and CRISIS grants to CAP accounts, PULP correctly notes that the Commission's CAP Policy Statement at § 69.265(9) provides guidance on how LIHEAP grants are to be applied to CAP accounts. These guidelines provide that a LIHEAP grant may be used to reduce a customer's current CAP payment if the CAP minimum payment is calculated to exceed 17% of the household's income, as well as used to reduce the amount of CAP credits that a utility applies to a customer's account. Moreover, some utility universal service plans allow for additional methods of application of LIHEAP grants. EAP correctly points out that the DPW's regulations relating to LIHEAP provide that LIHEAP crisis grants must be used to resolve a home heating emergency. 55 Pa. Code §§ 601.61--601.62.
As a point of clarification, the Smith decision provides policy guidance for application of energy assistance to accounts of customers who are not participating in CAP, while the CAP Policy Statement provides guidance for application of energy assistance grants to CAP customers. Questions about the proper application of LIHEAP or other energy assistance grants are legitimate disputes that are unrelated to the prohibition at § 1405(c) that the Commission not establish a payment agreement for CAP participants. Therefore, as with any other CAP-related dispute, utilities are required to apply § 56.151 in response to disputes about proper application of energy assistance. The Commission has jurisdiction to investigate the subject of the dispute, and utilities must place a ''stay'' on termination activity pending completion of the dispute pursuant to § 56.141(2). Moreover, pursuant to § 56.141(2), the complainant retains the obligation to pay undisputed amounts pending resolution of the dispute.
1. Clarification whether a ''user without contract'' who was not an occupant at the location when an arrearage accumulated is responsible to pay for prior service.
PGW agrees with EAP that the burden of establishing a move-in date rests with the user who has failed to contact the utility and has assumed the ''user without a contract'' status. PECO Energy states that the new occupant should not be held responsible for the prior service if proper documentation, such as a deed or lease, is provided showing that he or she was not an occupant at the time the arrearage accrued. Aqua stresses that there is an obligation on the customer moving out and the customer moving into the premises to notify the utility.
CLS sees the issue as whether a ''user without contract'' may be required to pay the outstanding balance for service received by the prior tenant/customer at the account premises. CLS states that the answer should be negative because there is no basis under Chapter 14 or prior regulations for requiring a tenant who was not an occupant to assume responsibility for service received by the previous tenant/customer prior to his taking possession of the account premises.
Regarding this issue, both Chapter 56 and Chapter 14 provide ample guidance on how to handle situations where a prior ratepayer vacates a premise without notifying the utility, and a new occupant moves in and also fails to contact the utility. Chapter 56 at § 56.16(a), a section not superseded by Chapter 14, provides that, in the absence of a notification by a customer that service should be discontinued under an account in the customer's name, the utility may hold the customer responsible for services rendered.
Chapter 14 at § 1407(d) and (e)13 allow a utility to hold a person liable for any outstanding balance or portion of an outstanding balance if the person resided at the property during the time the outstanding balance accrued and for the time the person resided there. In light of these requirements, a utility should determine the move-in date for the new occupant through application of § 1407(e). Once this determination is made, the utility should prorate any outstanding balance so that the prior ratepayer is responsible for the portion of the outstanding charges that accrued up to the date on which the new occupant began residing at the premises.
2. Clarification whether Chapter 14 authorizes a utility to include all adult occupants on bill as customer of record.
CLS states that Chapter 14 does not authorize utilities to require that all adult occupants in a household be included on a bill as a general condition of providing service to the household. Rather, Chapter 14 preserves the distinction contained in Chapter 56 between the customer of record, who is ''primarily responsible'' for the bill, and other adult occupants who, under certain circumstances, may be held secondarily liable and added to the bill when the utility has been unable to obtain payment from the customer of record. CLS submits that to interpret Chapter 14 to allow a utility to require that all adult occupants be included on the bill as a condition of service would produce unjust results. PECO Energy states that, while Chapter 14 does not require all adult occupants to be named as the customer of record, it does permit the utility to secure the names of all adult occupants at the time of application.
EAP and PGW contend that Chapter 14 entitles a utility to consider all adult occupants of a service location as applicants and to include them all as customers on the account or bill as a condition of service.
With respect to this issue, a utility should consider the person who applies for service as the customer of record. If the applicant requests that other names also be placed on the bill, a utility should verify the legitimacy of this request with the other parties. We agree with PECO Energy and CLS that Chapter 14 does not authorize utilities to require that all adult occupants in a household be included on a bill as a general condition of providing service to the household. However, we believe that the definitions of ''applicant'' and ''customer'' at § 1403 allow utilities, at their discretion, to require all adult occupants whose name appears on a mortgage, deed or lease to be listed on the bill as ratepayers of record. We also note that Chapter 14 permits a utility to secure the names of all adult occupants at the time of application in the event the utility finds it necessary to apply the provisions at § 1407(d) and (e).
IV. Protection from Abuse (PFA)/Consumer Education
1. Protections/obligations applicable to a PFA pursuant to § 1417.
The OCA notes that there was agreement at the July 1st Roundtable that the issues raised by the Pennsylvania Coalition Against Domestic Violence (PCADV) need to be addressed in a comprehensive manner. The OCA summarizes the key concerns as follows: the notice must be adequate and there must be appropriate confidentiality; a screening process is needed to adequately identify victims of domestic violence, and an appropriate referral process, with specially trained customer service representatives, needs to be in place. Aqua supports a process involving continuing dialogue. EAP welcomes the discussion with PCADV and other parties and recognizes the need to address confidentiality issues, as well as the need to communicate the effect of § 1417 so that victims understand the process. CLS acknowledges that Chapter 14 does not require utilities to provide protections for victims of domestic violence who are not ''under a protection from abuse order.'' However, CLS advocates that utilities voluntarily provide broader protections similar to those provided by other institutions such as the Department of Public Welfare since some victims of domestic violence are unable to get a PFA order for fear of provoking retaliation.
With respect to the issue of the application of § 1417, the Commission fully supports the ongoing discussions occurring between the parties, and note that Commission staff have and will continue to participate in these discussions. In regard to the information about § 1417 that should be contained in notices, we invite parties to suggest specific language in the sample notices requested in the instant order. The Commission will also review and make appropriate revisions to the following documents to ensure they include information about the PFA protections under § 1417: the Informal Complaint Form on the Commission's web site; the Commissions' Formal Complaint Form: the Chapter 14 ''Fact Sheet,'' and the ''Rights and Responsibilities'' summary. With respect to the issues of confidentiality, screening to identify victims of domestic violence and an appropriate referral process, we encourage parties to include these issues in the ongoing discussions and attempt to reach resolutions satisfactory to all parties.
2. Chapter 14 and customers with Limited English Proficiency (LEP) or disabilities.
CLS urges the Commission to establish regulations to ensure that LEP customers and individuals with disabilities receive effective communications. In regard to LEP customers, CLS maintains that language access is not only a good business practice but also argues that since utilities receive LIHEAP funds, it is required pursuant to the requirements of Title VI of the Civil Rights Act of 1964. In support of this position, CLS points out census data that indicates significant populations in Pennsylvania who speak English ''less than well.'' With respect to individuals with disabilities, CLS suggests that the Commission and utilities consult with appropriate advocacy groups and offers to assist in identifying such groups. PGW references its prior written comments and essentially maintains that PGW and other utilities already take sufficient steps to communicate with LEP customers.
Chapter 14 is silent in regard to the issues involving customers with LEP or disabilities. Chapter 56 at § 56.201, a section not inconsistent with Chapter 14, addresses the LEP issue to a limited extent. We anticipate further consideration of the issues raised by CLS when the Commission, pursuant to § 1418, Section 6 amends the provisions of Chapter 56 to comply with the provisions of Chapter 14. Prior to the rulemaking to amend Chapter 56, we encourage parties to engage in discussions to determine if agreement can be reached on appropriate steps to communicate with LEP customers and customers with disabilities.
3. Consumer Education and Chapter 14.
An underlying theme of comments by the OCA, PULP, and CLS is that customers need additional information to fully understand the effects of Chapter 14 on utility collection practices, particularly during the winter period.
We agree that there needs to be ongoing consumer education to help ensure that residential customers understand the new rules of the road. Utilities should begin the education process at the time of application by securing additional information about all of the adult occupants and explaining why this information is needed. Furthermore, revised winter termination notices should contain information to help customers determine whether they fall under the low-income protected categories. Utilities also will be conveying appropriate information about the new law when applying § 56.97 to contacts it receives from customers under threat of termination. Additionally, the Commission's Office of Communications will design material to continue the process of educating consumers about Chapter 14.
It is incumbent upon the Commission and the utilities to work together with consumer advocates and community based organizations to develop appropriate consumer education outreach programs to ensure that customers are fully aware of their rights under Chapter 14. For example, the Commissions' annual 'Prepare Now' campaign has successfully educated consumers on important utility issues that affect them. There are many methods for educating the consumer including, bill stuffers, newspaper publications and participation at consumer educational events. Therefore, we direct utilities to work with the Commission's Office of Communications to coordinate any additional educational efforts it plans to undertake to ensure that its customers understand the new rules of the road.
V. PGW--Specific Issues
1. Contents of winter termination notices. What information from § 1406(e)(1) and § 1406(e)(2) should be included on the notices? What information should be required in order to inform customers how to prevent termination? Also applies to 48-hour notices required under § 1406(b)(1)(iii).
PGW plans to add general language to its winter collection notices indicating that a customer may be exempt from winter termination depending upon the customer's income or family status and that the customer should contact the Company to find out whether they qualify for these exemptions. PGW emphasizes that absolutely nothing about Chapter 14 compels the Commission to alter the existing, Commission-approved 10-day notice. Moreover, PGW asserts that no other legal requirement, including due process, mandates the listing of every exemption or defense to termination.
PGW notes that the United States Supreme Court has held that due process requirements are fulfilled in the utility context by the chance for the customer to present his complaint to a designated employee of the company and the discussion with the company representative constitutes the only ''hearing'' required by due process. Memphis Light, Gas and Water Div. v. Craft, 436 U. S. 1, 14, 18-19 (1978). PGW submits that the typical 10-day termination notice plainly satisfies and has satisfied this requirement for some time and nothing about the enactment of Chapter 14 alters that fact or requires a change in either the content or process for issuing the notice.
Moreover, citing Anderson v. White, 888 F.2d 985, 993 (3rd Cir. 1989), PGW argues that notices of exemptions are unnecessary in pre-deprivation notices because those receiving notice are afforded time to consult an attorney or take other steps to avoid the deprivation. PGW explains that the termination notice informs customers to contact the utility.
PGW also requests Commission guidance on its plan to pursue winter termination, where warranted and upon Commission authorization, of customers at or below 150% of the FPL. Despite the claims of PULP, CLS and other parties to the contrary, PGW believes that it retains this pre-Chapter 14 authority for terminating this level of customers. According to PGW, nothing about the continued application of Section 56.100 (Commission authorization to terminate heating customers during winter) for customers below 150% of FPL (or 250% for other utilities) is inconsistent with the provisions of Chapter 14.
PGW explains that customers in the 150% FPL and below category may be eligible for LIHEAP CRISIS grants if they are in imminent threat of termination. Furthermore, based upon Section 56.100, PGW has, in the past, forwarded termination notices to delinquent customers in this income category so that they might be eligible to receive the additional grant. PGW proposes to continue to send such notices assuming that DPW leaves open the potential of obtaining a CRISIS grant prior to February 1.
PGW explains that DPW's previous policy was that termination notices sent prior to February 1 did not qualify a customer for a CRISIS grant because the customer was not in imminent threat of termination. However, PGW submits that with the passage of Chapter 14, and, in particular § 1406(g), PGW is urging DPW to alter its present policy and make customers eligible for LIHEAP CRISIS grants based upon termination notices received from December 1 onward.
In order to permit customers to be eligible for CRISIS grants in the December and January period, PGW proposes to utilize the following procedure for customers who are known to fall into the 150% of the FPL and below category:
a) PGW will continue to send termination notices to all delinquent customers in the 150% of FPL and below category, a process that is authorized by Section 56.100. Note that all such customers are theoretically eligible for termination (with PUC permission) because, under Section 56.100, while the PUC's Bureau of Consumer Services (BCS) has promulgated informal policy guidelines concerning shut-offs under that section, any of those restrictions may be waived by the PUC upon request.
b) This notice will indicate that the customer should contact the Company regarding the potential termination depending upon family status and income (the same notice that customers in other income categories will receive).
c) PGW will prioritize the potential terminations in this income category. PGW shall place at the end of the priority list (i.e., the last to be terminated) customers with children and seniors in the household, as well as customers who meet any of the other criteria listed in the BCS winter termination policy statement.
d) PGW shall request PUC permission to terminate customers starting with customers who do not fall into any of these categories. At the top of the list (i.e., first to be requested for termination) will be non-exempt customers whose payment histories or other activities justifies immediate winter termination.
PGW argues that the process of sending customers a termination notice in this context will actually assist those customers, the Company, and its other paying customers. According to PGW, without such notices this coming winter, an estimated 7,000 PGW customers may be denied the benefit of an estimated $2.1 million of CRISIS grant monies that would be utilized to reduce their arrearages.
The OCA states that winter termination notices must contain adequate information to enable a customer to understand the reasons for the termination, the protections to which the customer may be entitled, the process available to stop the termination and their rights in this situation. The OCA expressed its concern that the limited content proposed by PGW for winter termination notices does not meet the constitutional requirements of due process because the customer will lack the necessary information to meaningfully respond to the proposed termination.
According to the OCA, once PGW has determined that a customer who falls between 150-250% of the FPL has not paid at least 50% of their charges for the last two (2) months, and does not meet any of the exceptions listed in § 1406(e)(2)(i)--(iv), then PGW may choose to provide a written termination notice to that customer pursuant to § 1406(b)(1)(i). The OCA disagrees that a PGW notice that includes the proposed termination date and includes instructions for contacting the PGW comports with due process. The OCA cites as support for its position Mullane v. Central Hanover Bank & Trust Co. 339 U. S. 306, 314 (1950), where the Court held that due process requires ''notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections. The notice must be of such nature as reasonably to convey the required information.'' 339 U. S. 306, 314.
The OCA submits that part of this required information must include the reason(s) for the proposed termination, and the list of built-in safeguards provided by the General Assembly, as contained in § 1406(e)(2)(i)--(iv). The OCA asserts that this situation, proposing to terminate a customer's utility service in the winter, demands greater precautions than PGW is currently proposing to take.
The OCA also cites Goldberg v. Kelly, 397 U. S. 254 (1970) where the Court held that the importance of the need, continued receipt of welfare benefits, demanded a higher level of due process protections. The OCA submits that there is no greater need within the context of utility law, than the continued receipt of utility service to heat one's home in the winter.
Therefore, the OCA submits that requiring PGW to include the statutory exceptions to termination, and the reason(s) for the proposed termination, along with any necessary supporting financial calculations is just and reasonable in light of the significant property interest resting on the other side of the scale.
The OCA also cites Mathews v. Eldridge, 424 U. S. 319, 335 (1976) where the Court determined what level of due process must be afforded to an individual requires an examination of the following three factors:First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail.
The OCA submits that all these factors weigh in favor of finding that additional safeguards are warranted.
Finally, the OCA relies on Finberg v. Sullivan, 634 F.2d 50 (3rd Cir. 1980) stating that the Third Circuit reasoned that the Federal and Pennsylvania laws relating to exemption of certain property from garnishment were designed to protect a debtor and that these protections may not be widely known to laypersons. Therefore, the OCA submits that the Court further reasoned that the burden on the state, through its rules of procedure, was not great if it had to supply this small amount of additional information about Social Security benefits not being subject to garnishment, or attachment, or exemption. According to the OCA, Chapter 14's provisions contained within §§ 1406(e)(2)(i)--(iv) were intended by the General Assembly to protect low-income consumers from winter terminations and the statutory language contained in Chapter 14 is not widely known or understood by laypersons.
The OCA argues that the PGW's proposed winter termination notices will not adequately apprise its customers of the conduct that is the basis for the termination, nor will the notices provide the level of detail needed for a customer to prepare a defense. Citing Harrington v. Department of Transportation, Bureau of Driver Licensing, 763 A.2d 386 (Pa. 2000), the OCA contends that the formal notice itself must provide the details of exactly what conduct forms the basis for the termination and must inform the customer that they cannot be terminated if they fall below the statutory income levels, or meet other exceptions under the law. The OCA submits that the winter termination notices as described by PGW do not meet this standard, and are inadequate to reasonably inform its customers because the financial information and calculations, the statutory exceptions to winter termination and the customer's rights are not included on the notice.
CLS /PULP submit that PGW's winter termination notices (both the 10-day and 48 hour) should contain all of the following information:
* Information already mandated pursuant to Chapter 56 regarding the proposed termination, including the termination date, and the procedure for disputing the termination;
* The medical emergency notice mandated by PUC;
* Language to the effect that, ''If you are a victim of domestic violence who has a Protection from Abuse order, there are some additional protections available to you. If you want us to consider whether these protections apply to you, please let us know'';
* The household's service will not be cut off if the income of the adult members of the household is below 150% of the federal poverty guidelines, with a chart to show the amount for the most common household sizes; and
* The household's service will not be cut off if the income of the adult members of the household is between 150% and 250% of the federal poverty guidelines, with a chart to show the amount for the most common household sizes, and:
* anyone in the household is aged 65 or over; or
* anyone in the household is aged 12 or younger; or
* the household has paid at least 50% of its last two months' charges, with a statement of that amount, how much PGW believes the household has paid, and how much remains to be paid to avoid shutoff; or
* the household has paid at least 15% of the income of the adults in the household for the past two months, with a statement of how much PGW believes this amount to be, how much PGW believes the household has paid, and how much the household must pay to avoid shutoff.
CLS/PULP supports inclusion of this information arguing that the only reliable way to ensure that customers learn of the exemptions is to mandate that PGW inform customers of the exemptions in writing at the time that the information matters most, that is, in the termination notice itself.
CLS/PULP asserts that the Federal Third Circuit Court of Appeals has held that due process requires that notice of commonly-available exemptions is required where such notice ''can prevent serious, undue hardship for [an individual] whose lack of information otherwise would cause delay or neglect in filing a claim of exemption.'' Finberg v. Sullivan, 634 F.2d 50, 62 (3rd Cir. 1980). According to CLS/PULP, the Court held that due process requires that the notice of attachment of a bank account of a judgment creditor inform the debtor of statutory exemptions. According to CLS/PULP, the exemptions provided in § 1406(e)(2) to low-income PGW customers are similarly obscure, and hence required to be provided on PGW's termination notices. Furthermore, CLS/PULP argue that the exemptions in § 1406(e)(2) for households with adult income between 150% and 250% of the federal poverty guidelines and containing elderly or child members, or who have paid over half of their past two months' bills, or who have paid over 15% of their past two months' adult household income are not obvious. Moreover, CLS/PULP submits that the 10-days advance notice given prior to termination is not necessarily adequate time to seek counsel.
CLS/PULP states that the Commission and PGW cannot rely on PGW staff to inform customers of these exemptions over the phone. Finally, CLS/PULP provided a proposed attachment to PGW's existing termination notices, offering a simple check-box form to enable customers to assert an exemption.
We note that this issue has been resolved in section I.2. and we find no basis for making an exception for PGW. Here, however, the commenting parties have cited cases and raised arguments on procedural due process. Given the importance that the parties appear to give to this matter, we shall address the due process aspects of this issue.
Essentially, PGW has argued that listing every exemption or defense to termination is not required as a matter of law. According to PGW's analysis of the law, the requirements of due process have been applied to municipal utilities and that the chance for a customer to present his or her complaint to a company employee, satisfies due process. Memphis Light, Gas and Water Div., 436 U. S. 1, 14, 16, 18-19. PGW submits that the 10-day termination notice plainly satisfies and has satisfied this requirement for some time. At the same time that we agree that the 10-day termination notice has historically satisfied the due process notice requirement, we believe that the change in settled law, i.e. the § 56.100 prohibition against winter terminations, warrants added precaution such as listing the exemptions. The prohibition against winter termination has been in effect since 1983. Therefore, Pennsylvania utility consumers have for over twenty years relied on Commission regulation which restricted terminations of utility service from December 1 to April 1.14 We agree with the OCA that the statutory exemptions contained in § 1406(e)(2)(i)--(iv) that are intended by the General Assembly to protect low-income customers from winter terminations could not be widely known--it is recently enacted legislation and difficult to understand by lay persons because of its complex subject matter. The Third Circuit Court of Appeals in Finberg, 634 F.2d 50, 62, cited by the OCA and CLS/PULP, found lack of knowledge of the garnishment exemption for social security benefits to be relevant in determining that due process requires notice to the judgement debtor of statutory exemptions to garnishment.
Given the tragic consequences that may result from termination of heat-related utility service, and the reliance that some utility customers may have had on the prior regulation, which restricted winter terminations, we find that due process requires the content of the termination notice to include more than the proposed termination date and instructions for contacting PGW. In other words, the level of due process when termination occurs in the winter requires more such as the list of exemptions. Moreover, we agree with the OCA that the continued receipt of utility service during the winter outweighs any additional costs that may or may not be incurred by PGW in adding the additional information on the notice.
Based on this compelling need for utility service when the weather turns cold, we agree that ''constitutional procedural due process is a flexible concept, and thus, implicates procedural protections as each particular situation demands.'' Chester Water Auth. v. Pennsylvania Public Utility Commission, 868 A.2d 384, 391 (Pa. 2005). Here, heat-related utility service is absolutely necessary to protect life and property and the procedural due process and notice required under the circumstances are, therefore, influenced by the harm that may be suffered and the importance of the need. Kelly, 397 U. S. 254, 262-263.
Previously, in Section I (2) of this Order, we stated that all utilities subject to Chapter 14 have the opportunity to submit sample winter termination notices for our review. We noted that we anticipated receiving two sets of PGW notices. The second set of PGW termination notices (10 day, 48-hour and post termination) are the notices the Company will utilize in the winter in instances where the customer's household income exceeds 150% of the federal poverty level but does not exceed 250% of the federal poverty level, and starting January 1, has not paid at least 50% of his charges for each of the prior two months. This set of notices should also be provided to the Commission's BCS within 20 days of the date this Order is entered.
As noted above, unlike the other electric and gas distribution utilities, PGW is allowed at § 1406(e)(2) to terminate service during the winter period to a customer whose household income falls between 150% and 250% of the federal poverty level. At § 1406(e)(3), however, the General Assembly requires PGW to provide notice to the Commission on the day the 10-day notice is sent to customers whose household income exceeds 150% of the federal poverty level but does not exceed 250% when that notice is sent after November 30 and before April 1. Therefore, to comply with the provisions at § 1406(e) that are exclusive to PGW, it is evident that PGW must determine household income prior to the issuance of any termination notices in the winter months. Without determining household income PGW could commit numerous violations of Chapter 14 by providing customers with the incorrect notice or by failing to provide notice to the Commission at the time the 10-day notice is issued. It is not feasible to allow PGW to provide this Commission with all the notices it issues during the winter months. Such a practice would flood the Commission with notices, the majority of which would not require Commission review. The General Assembly has placed the burden of determining household income on PGW and we see no benefit in transferring that responsibility to the Commission.
We agree with the OCA and CLS/PULP that this notice must contain all the available methods of avoiding the termination found at § 1406(e)(2)(i)-(iv). A customer facing termination should be informed of the statutory provisions and protections that may prevent the termination. We also agree with the legal precedent and arguments put forth by the OCA and CLS/PULP to support our conclusion. It is reasonable, especially during the winter months, that this vital information be provided to those customers who should not be terminated for reasons identified by the General Assembly.
With regard to PGW's request for Commission guidance on its plan to pursue winter termination with Commission authorization of customer's at or below 150% of the poverty level, we have stated previously that utilities retain the authority to obtain Commission authorization to terminate a household that falls into a protected income category. However, between November 21 and January 31, in those instances where PGW is in possession of information that indicates the household income is at or below 150% of the poverty level, the Company should only begin the termination process if it intends to pursue termination to the end, i.e., to actually seek Commission authorization to terminate pursuant to § 56.100 if the customer fails to take actions that eliminate the grounds for termination.
Finally, relative to the CLS/PULP recommendation that PGW provide a attachment to the termination notice that the customer may complete to assert an exemption we reiterate our position that we believe there are more effective methods of a customer supplying and a utility maintaining this information.
2. Commission rule to ensure proper application of § 1406(e)(2). Clarification of whether PGW can terminate customers whose income is less than 250% FPL if the ''Commission rules'' referred to in § 1406(e)(2) do not yet exist. Winter termination screening process by PGW to ensure protection against erroneous winter terminations in application of § 1406(e)(2). Clarification of opportunity to prevent termination by tendering payment of either 50% of the monthly charges for the prior two months or 15% of the adult household member's income for the past two months.
First noting that these issues have mostly been addressed in its comments to Issue 1, the OCA believes that PGW's representatives stated that the utility will not send winter termination notices to its customers that fall between 150--250% of the FPL if PGW knows that the customer fits into one of the exemptions found in § 1406(e)(2)(i)--(iii). Moreover, the OCA contends that PGW's representatives stated that the utility will take reasonable steps to identify those customers who should not be sent a winter termination notice based on the criteria listed above. The OCA agrees with PGW's position on this issue and suggests that PGW develop a process to update financial and personal data about its customers.
CLS/PULP notes that § 1406(e)(2) provides that a PGW customer with adult household members' income between 150%--250% of the FPL may be terminated for non-payment in the winter period unless the customer has proven ''in accordance with Commission rules'' that his household contains one or more persons who are 65 years of age or over or one or more persons 12 years of age or younger. CLS/PULP states that this section of the Chapter 14 specifically requires a rulemaking before implementation. Although conceding that Section 6 of Chapter 14 generally provides that promulgation of regulations to administer and enforce Chapter 14 shall not delay implementation, Section 6 must be read in conjunction with the explicit language of § 1406(e)(2)(i)(ii), and (iii), which unlike most sections of Chapter 14, require actions ''in accordance with Commission rules.'' Therefore, until such Commission rules exist, CLS/PULP believes that there can be no winter terminations for non-payment of PGW customers whose adult household members' income is 250% of the federal poverty guidelines or less.
CLS/PULP argues that the legislature's clear intent here was to protect the elderly and young children, who are at particularly high risk of harm or injury as a result of loss of heat in the winter, by requiring the Commission to have rules in place prior to permitting PGW to act on winter terminations under § 1406(e).
CLS/PULP argues further that PGW should be required to undertake several steps to screen for customers exempted from winter termination by § 1406(e)(2). CLS/PULP emphasizes that it is PGW's obligation to identify household income. CLS/PULP argues that the Commission should explicitly require PGW (and all utilities governed by Chapter 14) to exclude children's income before determining whether the customer may be terminated in the winter.
CLS/PULP maintains that PGW should identify household income using information already gathered at the application stage or in setting payment arrangements; CLS/PULP suggests that PGW should use its existing data sources to identify households exempt from winter termination and PGW should ensure that it is as simple as possible for customers to inform PGW that they fit within an exemption. With that in mind, CLS/PULP proposed that customers be given several opportunities to do so, that are identified in its comments on pages 11-12.
As we stated in PGW-Specific issue #1, winter terminations will be permitted for customers whose income is less than 250% of the FPL. The Commission already has rules in place, in the case of PGW, in those instances where the utility is petitioning the Commission for permission to terminate a customer whose income is less than 150% of the poverty level. It is important to emphasize that from November 21 to January 31, PGW should only issue notices to this group of customers if it intends to follow through with the termination by petitioning the Commission if the customer fails to eliminate the grounds for termination.
PGW will be permitted to provide notice and terminate those customers between 150% and 250% of the poverty level during the winter. Similar to the responsibility shared by the other utilities, terminations in this customer category may not occur until PGW has confirmed that the household is not protected from termination pursuant to § 1406 (e)(2)(i)--(iv). While we are permitting these terminations we wish to emphasize that we are keeping our options open as to additional rules that may result from the upcoming rulemaking.
Finally, regarding the customer's opportunity to prevent termination by tendering payment of either 50% of the monthly charges for the prior two months or 15% of the adult household member's income for the past two months, it is our opinion that this matter can best be addressed through the information supplied on the termination notice. Therefore we encourage the interested parties to address this matter in the sample notices that will be presented to the Commission as a result of this Order. However, PGW is prohibited from terminating a customer when the customer has made payments in accord with the aforementioned amounts and is in the protected category.
3. Development of easily understood rules and regulations pursuant to § 1406(e)(2)(i) and (ii). Include a form with monthly bills for affected customers to complete and return to PGW.
CLS/PULP states that it is pleased to learn at the July 21, 2005 Roundtable that PGW plans to routinely accept customers' statements that a household contains a child aged 12 or younger, or an individual aged 65 or older, unless it has reason to suspect the customer's assertions, and it may also verify age in a random sample of cases.
PGW urges the Commission to reject any bill insert plan to capture customer information as this would be discriminatory and there is no evidence that exists as to the effectiveness of such inserts, and the Company has no ability to absorb the costs of producing, reviewing, and cataloging the inserts and any information obtained there in.
The Commission's shares the CLS/PULP view that PGW's plan to routinely accept customer statements that a household contains a child 12 or younger, or an individual aged 65 or over, unless it has reason to suspect the assertions, is a positive action by the utility. We also have no objection to random checks by reviewing a sample of these assertions.
As stated previously, we believe there are more effective ways of PGW obtaining information from customers that may exempt them from termination than by requiring the utility to include a form with monthly bills that the customer may complete and return to the Company. While PGW is free to initiate such a practice we shall not require it.
4. Clarification as to whether existing Chapter 56 medical certifications will continue to apply in the absence of ''Commission rules'' as referred to in § 1406(e)(2)(iii) and § 1406(f).
The OCA notes that PGW's representatives commented at the July 21st Roundtable that PGW will honor the Chapter 56 medical certification procedures and will add a nurse practitioner to those able to execute a medical certificate.
CLS/PULP states that existing regulations concerning medical certifications, to the extent not inconsistent or limiting the absolute mandate articulated in § 1406(f), § 1407(b)(1) and § 1406(e)(2)(iii) are therefore still valid. However, CLS/PULP submits that the Commission should affirm that § 56.114 does not, as some utilities claim, impose a maximum time limit on the duration of a medical certification of 90 days either for a single medical emergency, or for the lifetime of the customer. CLS/PULP explains that as long as customers continue to make equitable payments in accord with § 56.97 or § 56.116, they should be entitled to receive continued utility service.
CLS/PULP suggests that the Commission adopt a policy whereby customers and their household members with chronic and terminal illness receiving service under a medical certification need not file medical certifications on a monthly basis, but may file such certificates every 6 months or annually.
As addressed earlier in Section I(7) of this Order, we do not believe that most of our existing medical certification procedures are inconsistent with Chapter 14. Our interpretation of § 1406(f) applies to all utilities and need not be repeated here.
In regard to the PGW-Specific issue of § 1406(e)(2)(iii) and the requirement that PGW accept a medical certification to defer termination during the winter, it is obvious that PGW is aware of this obligation and does not contest it. PGW shall continue to accept medical certifications in accordance with existing Commission medical certification procedures, at any time of the year. We understand that PGW has been working with BCS to assure that PGW's procedures comply with Commission procedures. We encourage the Company and BCS to continue these efforts.
All other requests and recommendations for improvement of the medical certification procedure will be considered in a future rulemaking proceeding.
5. Clarification of whether PGW can request an up-front payment (other than the reconnection fee) from a customer who is restoring service by enrolling in the Customer Responsibility Program (CRP) in accordance with § 1407(c)(2)(iii).
The OCA contends that § 1407(c) explicitly sets forth the payment that may be required to restore service; namely, that for customers with incomes at or below 300% of the FPL, the utility may only require full payment of any reconnection fees along with repayment of the outstanding balance over 12 or 24 months, depending on income level. According to the OCA, there is no authority to suggest that the utility may also require an up-front payment toward the balance.
PGW states that for customers who are enrolling in CRP for a second time, the Company requires payment of the catch-up amount owed under the previous CRP account in addition to the reconnection fee.
CLS/PULP requests that the Commission clearly state that PGW is not allowed under Chapter 14 to request an up-front payment (other than the reconnection fee) from a customer who is restoring service by enrollment in CRP in accordance with § 1407(c)(2)(iii), even if the customer has defaulted on two or more payment agreements.
For restoration of service, it is clear that § 1407(c) allows a public utility to demand full payment of any outstanding balance from a customer or applicant whose income exceeds 300% of the federal poverty level or from a customer or applicant who has defaulted on two or more payment agreements.
Although reasonable minds can disagree over the proper interpretation of § 1407(c)(2)(iii), we believe that the General Assembly intended to provide additional protections to a PGW customer whose income is less than 135% of the federal poverty level. In addition, according to the Declaration of Policy as stated in § 1402(3), the General Assembly intended to ''ensure that service remains available to all customers on reasonable terms and conditions.'' Therefore, we interpret § 1407(c)(2)(iii) to mean that a customer who enrolls in CRP for the first time may have service restored upon payment of the Company's reconnection fee, regardless of the number of prior broken payment agreements--no payment toward the outstanding balance is required. Once in the CRP program, the customer's monthly payment will be determined by the requirements of the program rather than paying the outstanding balance over 24 months. We also interpret § 1407(c)(2)(iii) to mean that any payments required by CRP customers must be the most beneficial to the customer, whether the payments are for restoration of service or for catching up missed payments. The customer must always receive the most beneficial payment treatment.
6. Section 1414(c) authorizes PGW to refuse to provide service to an applicant if the applicant has a pending lien unless the applicant enters into a payment arrangement for the amount of the lien balance. Should the Commission require PGW to provide pre-lien notices to the property owner which give detailed information concerning the basis for the claim, and which inform the property owner of the right to dispute the bill with the company, and, if necessary, the Commission? Should PGW postpone filing the lien pending resolution of the disputes?
CLS/PULP submits that in implementing Chapter 14, the Commission must establish procedures which require that prior to filing the lien, PGW must provide the customer with a written lien notice, an opportunity to dispute the validity and/or amount of the lien with the Company, and, if necessary, an appeal to the Commission. CLS/PULP explains further that in cases where a customer disputes the amount or validity of the lien, due process requires that PGW be prohibited from filing the lien until the disputed matter has been finally resolved either through the utility company dispute processes, or when an appeal is filed, after resolution by the Commission.
CLS/PULP recognizes that § 141415 expressly confers on PGW the power to impose statutory liens for gas service on property to which unpaid gas service had been provided. Moreover, § 1414(a) authorizes PGW to obtain liens not only against the property of customers for unpaid gas bills provided to the property, but also against landlord-owned properties for unpaid gas service provided to tenant customers in individually metered units.
Citing § 1414(c), CLS/PULP reasons that PGW can require an applicant for service to pay or arrange to pay an outstanding lien as a condition of service. According to CLS/PULP, the inclusion of PGW's lien power in the Public Utility Code renders the pre-lien process an integral part of a collection process within the jurisdiction of the Commission. CLS/PULP submits that taking of a lien against a customer's real property, like termination of utility service by a municipally-owned utility, is a constitutionally recognizable deprivation of property requiring due process protection.
Given the significant impact on customers and applicants of the exercise of this lien power, CLS/PULP submits that there must be appropriate safeguards to assure that PGW customers have adequate warning to take steps necessary and proper to prevent inaccurate or erroneous liens from being filed against their property. The basis for this concern is that the establishment of the requested due process protections prior to the filing of the lien is particularly important because the Commission does not have jurisdiction over a statutory lien arising from unpaid gas service, once the lien has been filed. Strowder v. Philadelphia Gas Works, C-20028036 (December 30, 2002), 2002 WL 32069511 (Pa. P.U.C.). CLS/PULP submit that a customer who contests the validity or amount of a lien once it has been filed, must file a petition with the Common Pleas Court.
CLS/PULP states that the notice should contain: an itemized statement of the amount which PGW intends to lien, indicating the time periods during which the allegedly unpaid charges accrued and the amount of charges, if any, associated with the filing of the lien; the date on or after which the lien will be filed unless payment in full is received, the grounds for the lien are otherwise eliminated, a settlement or payment agreement is entered or a dispute is filed with PGW or the Commission; a statement that the customer should immediately contact PGW to attempt to resolve the matter, including the address and telephone number where questions may be answered and payment and settlement agreements entered into with the utility; and also include an appropriate notice informing the customer of appeal rights to the Commission.
The OCA has expressed several concerns relative to the lien and judgment process and, in particular, the subsequent payment arrangements between PGW and its customers to satisfy such liens or judgments. Specifically, the OCA submits that (1) PGW should develop and submit to the Commission a process whereby the lien or judgment payments received are periodically reported to the relevant Prothonotary office to facilitate an accurate picture of the amount of the lien or judgment outstanding; (2) PGW should include in this process what escrow and audit procedures PGW has in place to properly account for the lien or judgment payments; and, (3) the procedure regarding termination of a customer who has a payment agreement based on a lien or judgment should be thoroughly reviewed since the lien or judgment secures the arrearage that is the basis of the termination.
Finally, the OCA explains that PGW may place a lien on the customer's real property to secure its interest in the arrearages pursuant to § 1414(a) and § 1414(c) provides for PGW and the customer to enter into a payment arrangement to resolve the balance on the lien. The OCA submits that the relationship between termination for a default in the payment arrangement when the underlying debt is already secured by the customer's real property may present a different situation that requires further review.
PGW responds by asserting that the Commission simply has no jurisdiction over PGW's imposition or assessment of a lien on the property of its customers for unpaid natural gas distribution service charges and other related costs. PGW submits that its lien policies should not cause concern as the customer can dispute the bill, and, if he or she does, the Company voluntarily stays the imposition of the lien. Further, PGW explains that if the customer disputes the bill after the lien has been imposed, and the Commission ultimately reduces the amount owed, then the Company confirmed that the lien would be appropriately adjusted.
Historically, our policy on collection efforts has been based on Supreme Court precedent that we have no authority to preclude the utility from exercising its legal right to commence suit in local court to collect the delinquent accounts receivable nor in any other way effect the jurisdiction of the Court of Common Pleas. Bell Telephone Co. of Pa. v. Philadelphia Warwick Co., 355 Pa. 637, 50 A.2d 684 (1947). The Commission has lacked authority to prohibit a utility from instituting civil collection action or to in any way preclude a local court from exercising its statutory jurisdiction vis-a-vis civil remedies available to the creditor utility.
The Commission used this position in rejecting a PGW tariff provision that allowed the Company to deny service to a customer who failed to enter into a payment arrangement for an outstanding lien or judgment. The Commission felt this was an improper mingling of jurisdictional and non-jurisdictional utility debts, and that civil collection amounts and utility bills should be kept separate. Compliance Tariff of Philadelphia Gas Works in Response to the Commission Restructuring Order as Modified on Reconsideration, M-00021612 (Order entered October 10, 2003) at 5.
Now, Chapter 14 clearly authorizes PGW, and only PGW, to refuse to provide service to an applicant who has a pending lien or judgment unless the applicant enters into a payment arrangement covering the amount of the lien or judgment. It is clear that the General Assembly sought to give PGW an additional collection tool to assist the Company in improving its overall collection rates. Even more significant, it appears, is that the General Assembly placing this authority under the Public Utility Code puts the full power and authority of Commission jurisdiction over the lien process, 66 Pa.C.S. § 501, and the accessibility of the Commission's formal complaint procedures to PGW customers who have a dispute with the lien process. 66 Pa.C.S. § 701; 52 Pa. Code §§ 56.140--56.181. However, we do not believe that an implementation order is the proper vehicle to disseminate our conclusions on the scope of our jurisdiction over lien-related issues. We shall address lien provisions through two methods: (1) approval of filed tariff supplements and, (2) cases brought before the Office of Administrative Law Judge via formal complaints. In this manner, we shall address these issues on a case-by-case basis.
Based of our position here, we must deny CLS/PULP's request for the Commission to establish procedures governing notice requirements, dispute rights, or appeal rights prior to the initiation of the lien or judgment process. We believe that such a procedure is premature; Therefore,
It Is Ordered That:
1. This Second Implementation Order is hereby approved as being in the public interest.
2. This Order be served on the Office of Consumer Advocate, the Office of Small Business Advocate, and all jurisdictional water, natural gas and electric utilities, including those parties who submitted comments on these issues.
3. All jurisdictional utilities are hereby invited to submit sample 10-day, 48-hour, and post-termination notices to the Commission's BCS within twenty (20) days of entry of this Order. When developing sample notices for Commission staff review, we request that parties incorporate the plain language guidelines at § 69.251 into their design.
4. The second set of PGW termination notices (10-day, 48-hour and post-termination) that the Company will utilize in the winter in instances where the customer's household income exceeds 150% of the federal poverty level but does not exceed 250% of the federal poverty level, and starting January 1, has not paid at least 50% of his charges for each of the prior two months shall be provided to the Commission's BCS within twenty (20) days of entry of this Order.
5. That this Order be published in the Pennsylvania Bulletin.
JAMES J. MCNULTY,
[Pa.B. Doc. No. 05-1803. Filed for public inspection September 23, 2005, 9:00 a.m.]
8 Section 1406(f) provides as follows: (f) Medical certification.--a public utility shall not terminate service to a premises when a licensed physician or nurse practitioner has certified that the customer or a member of the customer's household is seriously ill or afflicted with a medical condition that will be aggravated by cessation of service. The customer shall obtain a letter from a licensed physician verifying the condition and shall promptly forward it to the public utility. The medical certification procedure shall be implemented in accordance with Commission regulations.
9 Section 1407(b) is cited on page 10.
10 Section 1406(c)(2) provides as follows: (2) Upon termination, the public utility shall make a good faith attempt to provide a post termination notice to the customer or a responsible person at the affected premises, and, in the case of a single meter, multiunit dwelling, the public utility shall conspicuously post the notice at the dwelling, including in common areas when possible.
11 Section 1407(c) provides as follows: (c) Payment to restore service.--(1) A public utility shall provide for and inform the applicant or customer of a location where the customer can make payment to restore service. (2) A public utility may require:
(i) Full payment of any outstanding balance incurred together with any reconnection fees by the customer or applicant prior to reconnection of service if the customer or applicant has an income exceeding 300436000f the Federal Poverty Level or has defaulted on two or more payment agreements. If a customer or applicant with household income exceeding 3000f the Federal Poverty Level experiences a life event the customer shall be permitted a period of not more than three months to pay the outstanding balance required for reconnection. For purposes of this paragraph, a life event is: (a) A job loss that extended beyond nine months. (b) A serious illness that extended beyond none months. (c) Death of the primary wage earner.
(ii) Full payment of any reconnection fees together with repayment over 12 months of any outstanding balance incurred by the customer or applicant, if the customer or applicant has an income exceeding 1502400143f the Federal Poverty Level but not greater than 3000f the Federal Poverty Level.
(iii) Full payment of any reconnection fees together with payment over 24 months of any outstanding balance incurred by the customer or applicant if the customer or applicant has an income not exceeding 1501061432f the Federal Poverty Level. A customer or applicant of a city natural gas distribution operation whose household income does not exceed 1350f the Federal Poverty Level shall be reinstated pursuant to this subsection only if the customer or applicant enrolls in the customer assistance program of the city natural gas distribution operation except that this requirement shall not apply if the financial benefits to such customer or applicant are greater if served outside of that assistance program.
12 Section 1405(d) provided as follows: Number of Payment Agreements.--Absent a change in income, the Commission shall not establish or order a public utility to establish a second or subsequent payment agreement if a customer has defaulted on a previous payment agreement. A public utility may, at its discretion, enter into a second or subsequent payment agreement with a customer.
13 Section 1407(d) and (e) provides as follows: (d) Payment of outstanding balance at premises.--A public utility may also require the payment of any outstanding balance or portion of an outstanding balance if the applicant resided at the property for which service is requested during the time the outstanding balance accrued and for the time the applicant resided there. (e) Approval.--A public utility may establish that an applicant previously resided at a property for which residential service is requested through the use of mortgage, deed or lease information, a commercially available consumer credit reporting service or other methods approved as valid by the Commission.
14 Of course, § 56.100 has always allowed utilities to petition the Commission for authority to terminate during the winter--although utilities have rarely filed such petitions.
15 Section 1414 provides as follows:
(a) General rule.--A city natural gas distribution operation furnishing gas service to a property is entitled to impose or assess a municipal claim against the property and file as liens of record claims for unpaid natural gas distribution service and other related costs, including natural gas supply, in the court of common pleas of the county in which the property is situated or, if the claim for the unpaid natural gas distribution service does not exceed the maximum amount over which the municipal court of Philadelphia has jurisdiction, in the municipal court of Philadelphia, pursuant to sections 3 and 9 of the Act of May 16, 1923 (P. L.207, No. 153), referred to as the municipal claim and tax lien law, and Chapter 22 (relating to natural gas competition).
(b) Residential Field Visit Charge.--A city natural gas distribution operation is authorized to charge a minimum fee of $10 for each instance in which its representative is required to visit the residence of a customer in the process of attempting to complete required service termination steps.
(c) Refusal of Service.--The Commission shall permit a city natural gas distribution operation to refuse to provide service to an applicant if the applicant has a pending lien or civil judgment by the city natural gas distribution operation outstanding against the applicant or against property owned in whole or in part by the applicant unless the applicant enters into a payment arrangement for the payment of the amount associated with the lien or judgment that remains outstanding at the time of the application.
No part of the information on this site may be reproduced for profit or sold for profit.
This material has been drawn directly from the official Pennsylvania Bulletin full text database. Due to the limitations of HTML or differences in display capabilities of different browsers, this version may differ slightly from the official printed version.