YOU ARE HERE: LAT HomeCollections

Power company thinks the PUC is dim

A proposal by San Diego Gas & Electric to allow customers to prepay their electric bills would eviscerate disconnection protections to the most vulnerable households. Regulators should shut the idea down.

June 15, 2012|Michael Hiltzik

Experienced consumers know that whenever a company says it's changing its services to serve them better, it's wise to count the silverware and make sure the doors are locked. But San Diego Gas & Electric Co. has lately unveiled a groundbreaking advance in the art of shafting customers and disguising it as an act of love.

The utility wants to give some of its 1.2 million residential customers the option to prepay their electric bills. Think of it as similar to a prepaid cellphone for which you buy a basket of minutes in advance; in this case you would put money in an SDG&E account, and when your electric usage drains it down you would refill it with cash or by bank card to keep the lights on.

What could be more convenient than that? The utility says this option gives its lucky customers a fabulous degree of flexibility in paying for and managing their energy use. For example, they'll get virtually real-time readings of their electrical consumption via smart meters, which will allow them to crank their usage down when money is tight.

It's proper to ask what must lurk inside the mouth of this gift horse, and here it is: The program would allow SDG&E to circumvent consumer protections governing disconnections, including the conditions, timing and required notice to customers. Put simply, if any prepay customers run into financial trouble, it will be infinitely easier for SDG&E to cut them off without a word of warning.

That's a great deal for the utility. But does it sound like a plan designed to serve the customer better? Not to the Utility Reform Network, a consumer advocacy group that contributed to a lengthy brief against the plan filed with the Public Utilities Commission. "Instead of looking for ways to keep the lights on, SDG&E is looking for ways to shut them off," says Mindy Spatt, TURN's communications director. "It's very hard to see advantages for the customer here." The San Diego-based Utility Consumers' Action Network further contends that the proposal would violate the state's utility law.

SDG&E has proposed the program to the PUC as part of its regular rate proceeding, so the commission eventually will have its say. The PUC has scheduled informational hearings this month in San Diego County. Neither of the state's two other major private utilities, Southern California Edison and Pacific Gas & Electric Co., has yet filed a similar proposal. But it's a good bet that if SDG&E puts this thing across, there won't be a timepiece in the world sensitive enough to count the nanoseconds that pass before they ask to join the club.

The important context, glossed over by SDG&E in its presentation about the program to the PUC in February, is that electricity isn't just any commodity, to be enjoyed or dispensed with at whim. It's fundamental to people's health and safety. That's why the law typically imposes stringent limitations on how and when a customer can be shut off for nonpayment or late payment.

In California, the rules include a minimum 14-day advance notice of a pending disconnection, plus outreach by mail, phone or a visit from a utility representative no more than 48 hours before the scheduled shut-off. Those notifications must include information about how to dispute a bill or request a payment extension, and where to find government assistance. The utility must offer the customer a payment plan stretched out over three months at least, and it can't shut the customer off in the meantime or while a bill is in dispute.

How many of those conditions would apply to a prepay customer? None. The utility could automatically shut off their lights four days after their accounts dropped to zero, or a day after they went $20 in the red. No notice, no calls; the customers would be treated as having "voluntarily" disconnected.

As a come-on, the utility says it won't require pre-payers to post the customary new-customer cash deposit of up to two months of an average bill. It won't require full repayment of unpaid balances before delivering service — instead it will apply a portion of the prepaid account to a customer's debt over time. "This is for people barred from having electrical service," SDG&E spokeswoman Stephanie Donovan explains, "such as those who can't make a two-month deposit, or have an existing bad debt or have no credit history."

Los Angeles Times Articles