CLS Urges Low-Income Philadelphians to Prepare for End of Winter Moratorium on Utility Shut-offs



It’s only early February and agencies such as Community Legal Service (CLS) are already concerned about low-income families who will lose utility service once shut-off season starts on April 1. Regulated utilities statewide can issue shut-off notices that inform low-income customers behind on bills that their utility service will be terminated between 10 and 60 days, with the earliest notices dated Feb. 1 to cover an April 1 or later termination.  CLS urges low-income utility customers with shut-off notices to apply for LIHEAP Crisis benefits to avoid termination of heat-related utility service.

CLS’ Thu Tran, energy attorney, said that, “Low-income utility customers should apply for help through the Crisis grant program now, while funds are available, as the program will close after March 31, 2011 or when funds are exhausted, whichever is earlier.” Crisis eligible customers must be responsible for a heat-related utility that is shut off or at risk of shut off, and must have household income at or below 160% of the 2010 poverty level, $35,280 for a family of four.

Earlier in the LIHEAP season, starting in November 2010, the Crisis grant was only available to restore service that had already been shut off. On Feb. 4, the Department of Public Welfare instructed its County Assistance Offices to “begin processing crisis payments for customers of regulated utilities that are issued valid termination notices dated Feb. 1, 2011 or later.”  In Philadelphia, Crisis grant applications for new LIHEAP recipients can be made in person at 1348 Sedgley Avenue, or by calling 215-560-1583 if the customer has already submitted a written LIHEAP application.

Winter Utility Shut-Offs

Prior to passage of Pennsylvania Act 201 of 2004, there was a statewide winter moratorium on heat-related utility shut-offs for residential customers, regardless of income. The Philadelphia Water Department, which is regulated by the City and not the PUC, is still prohibited by law from shutting off water for nonpayment in winter to any residential customer, regardless of income level.

Now, PUC-regulated utilities in Pennsylvania, including PECO and PGW, are prohibited in winter (Dec. 1 – Mar. 31) from shutting off only lower income residential customers who fall behind on bills. Except for PGW, this PUC protection covers households with income at or below 250% of the federal poverty level, which for a family of four is just over $55,000 a year.

In contrast, PGW is allowed by Act 201 to shut off a much larger group of customers in winter, those above 150% of the federal poverty level, which is about $33,000 a year for a family of four. State legislators gave PGW the authority to shut off more people because of their perception of PGW’s financial situation in 2004. Community Legal Services has questioned whether Act 201’s special termination provisions for PGW were necessary when PGW’s financial status was already improving by the time the Act was passed.

PGW Households Disproportionately without Heat Service

As of Feb. 1, there are 7,579 PGW households without a central heating source due to termination of utility service, according to the PUC’s updated Cold Weather Survey. This 7,579 PGW figure is 66% of the state-wide total of 11,547 households without central heat due to gas utility shut offs, and well over half the total of 13,859 households without central heat due to gas or electric utility shut offs.  The Cold Weather Survey only provides information on utility terminations during the 2010 calendar year and, accordingly, an unknown number of customers shut off in prior years remain without heat-related utility service.

While almost a third of households statewide whose heat utility was shut off as of Dec. 15, 2010 were able to get restored by mid-winter, PGW only restored heat service to 10% of the households who started winter without central heat.  PGW’s reconnection percentage is the lowest of all PUC-regulated Pennsylvania utilities. CLS has long been critical of PGW for having the highest termination rates and overly stringent reconnection policies consistently leading the state with the most number of households without heat in winter. For instance, PECO will accept LIHEAP Crisis grants to reconnect service and provide an installment agreement on the remaining balance, whereas PGW will reject the $400 grant if the customer cannot immediately cover the remainder of the reconnection terms.

Current Pennsylvania Law Promotes Shut-Offs and Limits Customer Options

Since passage of Act 201 (also known as Chapter 14 of the Public Utility Code) in 2004, the PUC has issued three “Chapter 14 Biennial Reports,” with the most recent report published on Jan. 14, 2011.  The latest Biennial Report concludes that terminations for the electric and gas industries have risen to “record high levels” since passage of Chapter 14. From 2004 through 2009, electric terminations rose 78.6 percent, with PECO shutting off as many as 84,323 customers in one year, or one in 17 customers. PGW shut off gas to 38,536 customers in 2009, more than one in 12 customers.

In addition to increasing shut offs, Act 201 reduces the relief available to utility customers by severely limiting the number of payment agreements that the utility can be required to provide. While reconnection numbers have increased at rates comparable to the termination rates, each year more households struggle to have utilities reconnected on affordable terms because, in most circumstances, Act 201 only requires utility companies to give a customer one opportunity to enter an installment payment agreement to catch up on bills. Act 201 is due to expire in 2014, which is no relief to the increasing number of customers who need another chance now to reconnect heat service or prevent shut off.

CLS’ Tran urges customers with shut-off notices to contact their utilities whose employees, she says, “are obligated by law to fully explain all available methods for avoiding a termination.”

(image credit.)

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