HARRISBURG — State lawmakers ended the legislative session without reauthorizing a 20-year-old consumer protection law that bans companies from shutting off low-income customers’ utilities during the winter.
Consumer advocates say failure to renew the law, known as Chapter 14, won’t cause a wave of disconnections because the Public Utility Commission has adopted almost all of the protections into its internal regulations.
However, they say lawmakers missed an opportunity to pass stronger consumer protection rules as low-income ratepayers face increasing pressure from high energy prices.
Meanwhile, utility companies are dismayed by the legislature’s inaction, as the expiring law gives them rights when it comes to billing.
“From our perspective, it’s unfortunate that Chapter 14 was not reauthorized as this law provides important stability and certainty regarding utility billing and collection standards,” said Terry Fitzpatrick, chief executive of the Energy Association of Pennsylvania, a trade group that represents electric and gas utility companies.
Currently, Chapter 14 locks ratepayers behind on their bills into a set timeline to repay, ranging from six months to five years depending on their income level. When the law expires on Dec. 31, the PUC — an independent five-member board appointed by the governor to oversee everything from telecommunications to taxis — will have the discretion to set up individual repayment plans when petitioned.
Lawmakers are not scheduled to return to Harrisburg until the new session begins on Jan. 7.
First passed in 2004, the law was designed to make it easier for utility companies to reclaim unpaid bills while increasing consumer protections.
Utility companies have to give ratepayers advance notice of shutoffs and allow individuals to submit a doctor’s note to block a shutoff. They also can’t disconnect low-income customers’ electricity and gas service between Dec. 1 and March 31 each year.
In return, the law took away the Public Utility Commission’s ability to design customer-specific repayment plans. Instead, companies are allowed to require full repayment, plus fees, before a customer behind on their bill can restart service.
It also includes other measures friendly to the industry, such as allowing a ratepayer to be held liable for bills left unpaid by another occupant even if they move out.
Chapter 14 was intended to “go after customers who are able to pay,” said Joline Price, a utility attorney with the Philadelphia-based Community Legal Services. But instead, it “really has made things a lot harder for customers who don't have the ability to pay.”
The law must be reauthorized every ten years. In 2014, lawmakers did so unanimously.
But this year, the Democratic-controlled state House and Republican-majority state Senate were unable to find common ground amid a debate over additional protections for consumers facing rising utility costs.
Consumer advocates like Community Legal Services say the protections under Chapter 14 are no longer enough. While customers are protected from winter shutoffs, the law allows companies to tack additional fees, fines, and deposits onto low-income customers’ bills.
These groups point to spikes in disconnections when energy prices soar and the high percentage of debt held by low-income households.
State Rep. Rob Matzie (D., Beaver), who chairs the committee that oversees utilities, offered a slate of new protections in a bill to reauthorize Chapter 14, such as a summer shutoff moratorium.
As the session progressed, the lower chamber backed off from some of those demands in hopes of reaching a deal. A more modest bill that passed in October would have banned reconnection fees and extended payment plan lengths for anyone at 300% or less of the federal poverty level.
“We're willing to listen and roll it back,” Matzie said. But, he added, the reauthorization push “kind of just died.”
Matzie believes action is still possible if the state House and Senate find common ground on a handful of issues in the new year. Democratic priorities include expanding the list of professionals who can sign a medical note seeking a shutoff exemption and giving customers in debt more opportunities to enroll in repayment plans.
Earlier this year, the Republican-controlled state Senate passed its own Chapter 14 reauthorization proposal that kept much of the original law intact. It also included a few measures friendly to companies, such as shortening the amount of time a doctor’s note can help a person avoid a shutoff from 90 to 60 days.
The state House did not advance the proposal.
State Rep. Craig Williams (R., Delaware), a former lawyer for Philadelphia-area electricity provider PECO, argues that expanding Chapter 14’s protections will lead to higher utility bills for everyone.
“Here's the dirty little secret,” Williams said. “What that means is the utility is going to be racking up tens of millions of dollars in uncollectible debt. And when it comes time to file their next rate case … they will be passing that uncollected debt onto all of your constituents and you.”
The PUC hopes lawmakers will find a way forward, a spokesperson said in a Nov. 24 statement.
In the meantime, “the Commission plans to take every reasonable effort to maintain regulatory consistency during any period in which the legislative authorization of Chapter 14 lapses.”
