National Grid has failed to fully help cash-strapped customers get access to payment plans and low-income programs, leaving many subject to an aggressive new program to force payment, according to a group challenging the gas-utility’s proposed 24 percent delivery rate hike.
In testimony and filings in National Grid’s $146 million rate- hike request, which would increase average monthly bills by around $16.50, the Public Utility Law Project or PULP, a low-income ratepayer advocacy group, says just under half the company’s $5 million low-income program budget, or around $2 million goes unspent each year, while the company has aggressively targeted some of those same customers for shutoffs and late-payment fees when they fall behind.
Last year alone, according to PULP, 13,524 homes had their natural gas line shut off due to nonpayment, compared with 9,852 in 2014 — a 37 percent increase. The group noted that the shutoffs followed a “particularly aggressive” new method for getting customers to pay up: physically seizing the gas meters from their home.
Wendy Ladd, a National Grid spokeswoman, noted the meter-removal program is a “legal process” that is used as a “last resort when all other collection actions have been exhausted.” She said the process “improves safety” by ensuring that “unattended accounts are not left active.”
Ladd said National Grid has the lowest rate of terminations in the state, “far lower than other utilities.”
Rachel Burd, a community relations organizer for nonprofit PULP, in arguing against National Grid’s proposed rate hike , said it would place an “extraordinary burden” on customers, around half of whom already can’t afford their utility bills.
Even as it increases shutoffs to force payment, National Grid has sharply increased the amount it charges in late fees over the past decade: In 2015 it levied more than $5 million in late fees on Long Island and the Rockaways, compared with $1.7 million in 2004.
Ladd noted late charges are based on “state regulations and provisions” in approved utility rules, and noted residential customers aren’t charged the fees if they are on a deferred payment plan.
But PULP said that National Grid doesn’t go far enough in educating eligible customers about deferred-payment plans or reduced-rate plans. The group said it found “significant evidence” that National Grid may have violated the Home Energy Fair Practices Act or HEFPA, which requires utilities offer and follow deferred-payment plans for those who fall behind.
Last year, 8,500 residential customers, or only around 19 percent of those who were behind 60 days on their bills, had negotiated deferred-payment plans, which spread out repayment of back balances to help customers catch up.
“Since the peak of the financial crisis and the Great Recession of 2009, the average number of deferred payment plans has gone down,” Burd said, while the total amount of arrears by customers has increased.
Ladd noted that PULP “has not identified a single instance of violation” of the act or state rules, and said the company’s practices comply with “all applicable HEFPA regulations.”
She also noted around a third of National Grid customers are nonheating customers, with lower bills that don’t normally require deferred payment plans.
PULP charged that National Grid isn’t doing all it can to make customers aware of reduced-rate plans. In 2013, the company provided around $3 million in rate discounts to fewer than 9,000 heating customers, and around $100,000 to just over 1,000 nonheating customers, leaving $2 million in program budget costs unspent. PULP estimated that at least 19,403 customers who are eligible are not getting access.
Ladd acknowledged participating in the low-income programs was “lower than forecast,” but noted that any unspent balances are applied to other customer-assistance programs. She said the company has used outbound calling programs, partnerships with community groups, translated brochures and consumer advocates to increase the reach of the reduced-rate plans. The company has also proposed new measures to increase participation, she said, while increasing the amount of the discount.
PULP charged National Grid doesn’t do enough when some of its customers are lured to the promise of lower rates by switching to an outside energy service company, or ESCOs. Burd cited January 2016 National Grid data showing that nearly all National Grid natural gas customers who switched to an ESCO (or 99.8 percent) paid higher costs for the service.
In all, the group found, 41,000 customers paid a total of $1.709 million more for ESCO service than they would have had they remained with National Grid. Burd noted that ESCO bills can be double, even quadruple what customers had been paying.
Since 2009, PULP found, the monthly percentage of residential customers who switched back to National Grid, and whose bills were sold to National Grid as a receivable, is nearly 100 percent.
When customers who have run up unpaid bills through the ESCO switch back to National Grid, their past-due balances follow them, PULP said, along with late fees that can amount to 18 percent of the bills. PULP charged National Grid doesn’t do enough to alert customers they can pay the ESCO bill or what their bill would have been had they remained with National Grid, whichever is lower.
Ladd noted the state has announced a comprehensive plan to protect customers from deceptive practices used by some of these service companies, and once resolved, National Grid will be able to promote more up-to-date guidance.
She said the state Public Service Commission has approved a program that allows the company to purchase the receivables of energy service companies. “With regard to collections and terminations,” she said, “these customers are treated in exactly the same manner as customers that do not take ESCO service.”