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Jump in service disconnections sparks move by California

The Public Utilities Commission votes to order providers to help their nonpaying customers keep the heat and lights on.

February 05, 2010|By Marc Lifsher

Reporting from Sacramento — California regulators, reacting to a dramatic increase in service shut-offs, ordered electric and gas utilities Thursday to make greater efforts to help keep the lights and heat on for non-paying customers, especially those in poorer neighborhoods.

Disconnections for low-income customers jumped 28% statewide from September 2008 to August 2009, compared with the previous 12 months, according to an independent arm of the Public Utilities Commission.

The Division of Ratepayer Advocates' report speculated that widespread installation of so-called smart meters that allow service to be disconnected remotely may be a factor in the increased cutoffs.

Smart meters allow utilities "to cut off more people faster and more frequently and more cheaply" than manual disconnections, said Dana Appling, the division's director.

The rise in disconnections was highest in parts of Northern and Central California served by Pacific Gas & Electric Co., which has installed a large number of smart meters, the division said. San Diego Gas & Electric Co., which has the state's lowest disconnection rate, and Southern California Edison have yet to roll out their smart meters on a large scale.

PUC members said they were alarmed that growing numbers of recession-racked Californians were getting their lights turned off because they couldn't pay their bills. What's worse, they're getting hit with disconnection and reconnection fees that range from $270 to $681, the PUC said.

The state is "experiencing the perfect storm with the loss of thousands of jobs and the mortgage crisis," Commissioner Dian Grueneich said.

The commission was forced to act on an interim basis because the state's investor-owned utilities failed to come up with a voluntary, uniform program for reducing disconnections, Commission President Michael Peevey said.

Utilities took a positive first step by agreeing to a holiday moratorium on shut-offs in parts of December and January, Peevey said. But they "did not go to the next step and commit to improving practices in a meaningful way."

Peevey and the four other commissioners unanimously voted to immediately require utilities to take interim measures to help customers pay their back bills without any interruption in service. A permanent set of rules should be ready for adoption in June, he said.

The temporary fix, which could take effect as early as next week, requires that utility customer service representatives inform people who fall behind on their bills that they can work out a payment program that gives them as long as a year to bring their accounts up to date without any power interruptions.

Utilities also will be prohibited from forcing customers, who have established prior credit, to put up a new deposit because of slow payment, nonpayment of bills or the need to reconnect after a cutoff.

The number of low-income customers disconnected by Edison in parts of Central and Southern California climbed 21%, the Division of Ratepayer Advocates found, while overall disconnections increased 2%.

But PG&E's low-income disconnections jumped 75% and overall disconnections rose 40%, the division said. SDG&E's low-income disconnections rose 15%, while overall disconnections fell 0.2%.

About one-third of the 16 million homes served by the state's three investor-owned utilities are considered low-income.

Representatives for both PG&E and Edison said their companies were working with the commission to provide low-income customers with information about special programs that reduce bills.

"We're trying to reduce the number of disconnects and keep the lights on," said Linda Yamauchi, Edison's manager for consumer affairs.

The company already has made improvements in its customer outreach, she said. The increase in disconnections cited by the state did not reflect a rise in the number of Edison customers who are receiving a 20% discount on their bills as part of a state subsidy program, she said.

Consumer groups, which have been complaining about the growing number of disconnections for the last year, generally welcomed the PUC action.

"The utilities should be in the business of keeping the lights on, not shutting them off," said Mark Toney, executive director of the Utility Reform Network in San Francisco.

Appling of the Division of Ratepayer Advocates recommended that the PUC halt the use of smart meter remote disconnections until questions about the reliability of PG&E's system could be addressed. That recommendation was not included in the agency's order for interim measures.

Banning remote disconnections would make it impossible to reconnect service remotely, PUC spokeswoman Terrie Prosper said.

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