BILL ANALYSIS
AB 2207
Page 1
Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2207 (Fong) - As Amended: April 8, 2010
SUBJECT : Utilities: termination of service.
SUMMARY : Requires gas and electrical corporations (utilities)
to allow a customer who is subject to termination of service for
nonpayment of a delinquent bill to enter into a bill payment
plan of 3 months, or more than 12 months depending on the
customer's situation and ability to pay. Specifically, this
bill :
1)Requires utilities to allow a customer who is subject to
termination of service for nonpayment of a delinquent bill to
enter into a bill payment plan.
2)Requires the utilities to require a customer service
representative to inform the customer that he or she has a
right to arrange a bill payment plan extending the period for
payment of the bill a minimum of 3 months.
3)Requires the utilities to authorize a customer service
representative to extend a bill payment plan period up to 12
months, depending on the particulars of the customer's
situation and ability to pay.
4)Permits a utility to authorize bill payment plan schedules
that exceed 12 months.
5)Requires the customer to be responsible for any charges that
accrue to the service account after entering into a bill
payment plan.
6)Permits a utility to file with the California Public Utilities
Commission (CPUC) a Tier 1 advice letter to open a memorandum
account to track any significant additional costs associated
with complying with the requirement to offer a bill payment
plan, and requires the CPUC to consider the process
"reasonable" for the utility to recover the costs.
EXISTING LAW :
AB 2207
Page 2
1)Requires utilities to first provide notice of delinquency and
impending termination prior to terminating residential service
for nonpayment.
2)Precludes a utility from terminating service for nonpayment if
there is a pending investigation resulting from a complaint,
when a customer has been granted an extension, or on the
certification of a licensed physician or surgeon that
termination of service would be life-threatening to the
customer and the customer is financially unable to pay and is
willing to enter into an amortization agreement with the
utility.
3)When granted an extension due to a life-threatening situation,
requires the utility to allow the customer to amortize, over a
period not to exceed 12 months, the unpaid balance of any bill
asserted to be beyond the means of the customer to pay.
4)Requires utilities to provide a residential customer an
opportunity for review of the complaint by a review manager,
where the customer has initiated a complaint or requested an
investigation within 5 days of receiving the disputed bill, or
who has before termination of service made a request for
extension of the payment period of a bill that's beyond their
ability to pay in full within the normal period for payment.
5)Permits any customer whose complaint or request for an
investigation has resulted in an adverse determination by the
utility to appeal the determination to the CPUC.
6)Requires every electrical, gas, heat, or water corporation to
first give notice of an impending termination at least 10 days
prior to the proposed termination, and not earlier than 19
days from the date of mailing the utility's bill for services.
7)Requires every utility to make a reasonable attempt to contact
an adult person residing at the premises of the customer by
telephone or personal contact at least 24 hours prior to any
termination of service, with an exception.
8)Requires every utility to make available to residential
customer who are 65 years or age or older, a third-party
notification service and requires the utility to attempt to
notify the designated person.
AB 2207
Page 3
9)Precludes a utility from terminating service of a customer who
fails to comply with an amortization agreement without giving
notice to the customer at least 48 hours prior to termination
of the conditions the customer is required to meet to avoid
termination.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, the purpose of this bill is
to ensure the utilities use uniform standards that provide
residential ratepayers an opportunity to finance their
delinquent bill charges. Some utilities are more lenient than
others and the author would like to provide a stronger level of
guidance than what is currently allowed in statute.
1) Background : Each utility has been implementing its own
respective program on outreach and education to reduce the
number of unnecessary disconnections; however, there has been no
consistency or uniformity across all utilities.
Pursuant to CPUC tariffs, PG&E provides a process that allows a
total number of 70 days from the bill mailing to when an order
is issued for a shut-off of service. If payment is not received
by PG&E within 19 days after the bill is mailed to the customer,
it is considered past due. Based on current practice, PG&E does
not send a delinquency notice until 42 days after the bill is
mailed. First, when the bill is delinquent, PG&E issues a
15-day notice. Second, a 48-hour notice. Third, a 48-hour
outreach call. Fourth, an Outbound call. Finally, an order is
issued for shut-off of service. For medical / life support
customers, PG&E attempts another phone contact and/or a 15-day
warning letter to the customer. It is followed by a certified
letter that notifies the customer of a date of service
disconnection. Another phone call is attempted and/or a letter
from PG&E Customer Relations to try to work out a payment plan.
For residential non-CARE customers, San Diego Gas &Electric
Company (SDG&E) follows an automated collection path which
includes steps to provide a late notice, a 48 hour disconnect
notice which is delivered to the premise, and the final step of
disconnection. Residential CARE customers follow the same
collection timeline, but the process includes two additional
communication steps: A reminder letter is mailed prior to
delivery of the 48 hour notice and an outbound reminder call is
made prior to disconnection. Customers designated as Life
AB 2207
Page 4
Support and Medical Baseline receive a late notice and a 48-hour
notice via the automated collections process. Accounts are then
reviewed manually to initiate in-person contact and to provide
assistance options. In the rare situation where disconnection of
a Life Support account is necessary, the process is initiated
manually and a Collections Supervisor will accompany the
collector to the premise to ensure that disconnection of service
will not endanger the life of the occupants. Customers
designated as Medical Baseline only, will benefit from an
increased baseline allowance but the account will follow the
normal, automated collections path.
For Southern California Gas Company (SoCalGas), residential
CARE/Non-CARE customers follow an automated collection path
which includes steps to provide a late notice, a 48 hour
disconnect notice is delivered by an outbound reminder call, a
mailed notice is sent to customers not reached by phone, and for
senior citizens and disabled customers of whom SoCalGas is
aware, the notice is delivered to the premise. The final step
is a field visit to collect or disconnect the service.
Customers designated as Life Support and Medical Baseline will
receive a late notice and a 48-hour notice. A disconnect notice
will be reviewed manually to determine if further collection
activity should be taken. In the rare instance where
disconnection of a Life Support account may be required, the
situation is reviewed manually by a Collections Supervisor. If
determination is made to disconnect service, other resources
will be obtained to ensure that disconnection of service will
not endanger the life of the occupants. Customers designated as
Medical Baseline only, will benefit from an increased baseline
allowance but the account will follow the normal, automated
collections path.
Effective February 12, 2010, both SDG&E and SoCalGas implemented
temporary practices imposed by the CPUC to assist customers
experiencing financial difficulty. The revisions require SDG&E
to provide all residential customers facing disconnection the
option of a three month payment plan. The revisions also require
that we cease requesting security deposits from customers that
have developed a poor payment history or who have been
disconnected for non-payment.
2) The CPUC Rulemaking : On February 4, 2010, the CPUC issued a
Rulemaking (10-02-005) to establish ways to improve customer
notification and education to decrease the number of gas and
AB 2207
Page 5
electric utility service disconnections due to nonpayment by
improving customer notification and education. The CPUC noted
that the economic crisis currently existing in California and a
recent increase in utility service disconnections has led it to
reexamine utility disconnection rules and practices.
The CPUC's goal was to identify more effective ways for the
utilities to work with their customers and develop solutions
that avoid unnecessary disconnections without placing an undue
cost burden on other customers. The CPUC focused on
incorporating the productive and effective practices that each
utility can share so that all gas and electric utilities have
the benefit of implementing best practices in its service
territory.
Under that order, the CPUC requires PG&E, SCE, SDG&E, and
SoCalGas to implement interim practices by February 11, 2010, or
no later than five business days from the mailing of the order.
Those interim practices are virtually identical to the
requirements included in this bill.
The utilities and parties will have an opportunity to comment on
these interim practices and their efficacies, as well as sunset
provisions if appropriate, while the parties continue to explore
and dialogue about other solutions to assist customers to pay
their utility bills and avoid disconnection of service. The
CPUC is expected to issue a decision in June of this year.
REGISTERED SUPPORT / OPPOSITION :
Support
The Greenlining Institute
Opposition
None on file.
Analysis Prepared by : Gina Adams / U. & C. / (916) 319-2083