Press Releases

PUC Rejects PGW Senior Citizen Discount, Grants Limited Waivers of Regulations

HARRISBURG – The Public Utility Commission (PUC) today denied the Philadelphia Gas Works’ (PGW) request to establish a means-tested senior citizen discount program, but agreed to partially waive some regulations to assist the company in its efforts to improve its collection process.

“The Commission must balance the financial integrity of PGW with consumer protection rights,” said Vice Chairman Robert K. Bloom. “While I appreciate PGW’s position regarding its large collection problem, it must be stressed that there is some culpability on the part of PGW. This problem did not occur overnight. In fact, when PGW became subject to our jurisdiction, they already had a significant collection problem and tenuous financial picture. The argument that Chapter 56 Regulations are the reason for the bleak financial picture is not accurate.”

Commissioners Kim Pizzingrilli and Glen R. Thomas supported a motion by Vice Chairman Bloom, with Chairman Terrance J. Fitzpatrick dissenting and Commissioner Wendell F. Holland concurring in part and dissenting in part. (Vice Chairman Bloom motion, Chairman Fitzpatrick statement, Commissioner Thomas statement.)

In an effort to increase cash flow and to improve collections, PGW sought to assess certain fees onto customers and to waive several regulations related to termination practices. The PUC granted waivers of the following regulations for a two-year pilot period:

• Between April 1 and Nov. 30, PGW does not have to post a termination notice at a residence 48 hours prior to shutting off a customer. The PUC said the notice is one of several, so customers would continue to be sufficiently warned about the possibility of termination. The company must continue to provide the 48-hour notice during the winter months from Dec. 1 through March 31;
• PGW may shut off Level 4 customers in winter. Level 4 income starts at 301 percent of the federal poverty guidelines as adjusted annually. Currently, this would include customers, for instance, with minimum annual incomes of $27,948 for a single-member household, $56,568 for four members and $75,648 for six members;
• PGW can require full payment of arrears before restoring a Level 4 customer’s service;
• PGW may require a $200 security deposit for non-heating customers and a $500 one for heating customers as a condition for restoring service after the winter termination period.

However, the Commission denied the company’s request to charge $10 for residential field visits because the costs are already being recovered through other charges. Also, the PUC rejected PGW’s request to require security deposits from all new customers, even if customers were in good credit standing.

In addition, PGW wanted to make new applicants for service pay outstanding unpaid bills at an address when it could be shown that the customer lived at the address during the time the unpaid bills accumulated. The PUC ruled that the company does not have the authority under law to unilaterally determine that an applicant for service is liable for the outstanding account balance of another person. That authority rests with a court or the Commission.

As a condition for granting the waivers today, PGW must file semi-annual reports with the PUC showing the number of customers impacted and money saved. The reports must also be provided to all parties to the case.

“The Commission will monitor this report and will not hesitate to reconsider the waivers as warranted,” Vice Chairman Bloom said.

The PUC today also directed PGW to consult with the Commission’s Bureau of Consumer Services and then select an independent third-party to evaluate the company’s universal service and energy conservation programs. A final report and recommendations must be submitted to the Commission by Dec. 31, 2005 .

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as stewards of competition.

For recent news releases, or more information about the PUC, visit our internet homepage at www.puc.state.pa.us.

# # #

Docket No. P-00042090