Staff comments attachment c.doc

CURRENT MORATORIUM POLICY AND PROPOSED PILOT CUSTOMER IMPACT

Scenario. On December 1, the customer declares inability to pay and has children under 18 in the household. The customer has a past due balance of $100. The customer is billed $75 in December, $100 in January, and $125 in February for energy usage. For simplicity, interest charges, which would normally apply, are not included in these examples.

Outcomes Under Existing Moratorium – Rule 306
Example 1
Customer eligible for LIHEAP. The customer makes no payment from personal funds for the months of December through February. The utility receives an Energy Assistance benefit amount of $250 in January, which is applied to the customer’s past due balance of $275 ($100 balance carried forward plus $75 bill for December and $100 bill for January.) The utility is prohibited from disconnecting the customer’s service from December through February. On March 1, the customer has a past due balance of $150 ($25 remaining from January bill plus $125 February bill) and is disconnected. To restore service, the customer must pay the past due balance (or make other acceptable payment arrangements) plus a reconnection fee and a deposit.

Example 2
Customer not eligible for LIHEAP. The customer makes no payment for the months of December through February. The utility is prohibited from disconnecting the customer’s service from December through February. On March 1, the customer has a past due balance of $400 and is disconnected. To restore service, the customer must pay the past due balance (or make other acceptable payment arrangements) plus a reconnection fee and a deposit.

Outcomes under proposed Winter Protection Program (WPP)
Example 3
Customer eligible for LIHEAP. The customer’s regular level pay amount (based on estimated annual usage plus the past due balance of $100 divided into 12 monthly installments) is $90. The customer’s monthly payment amount under the Winter Protection Program for December, January and February is $45, one-half the regular level payment amount. The customer pays $45 in December as agreed. The utility receives an Energy Assistance benefit amount of $250 in January, which is applied to the customer’s actual balance of $230 ($100 balance carried forward plus $75 bill for December and $100 bill for January minus the $45 payment made in December.)* A $20 credit balance remains after applying the LIHEAP benefit amount to the actual balance owing. Because the customer has a credit balance, the customer does not have to make a WPP payment of $45 in January. In February, the customer makes the $45 WPP payment, leaving a balance owing of $60 ($125 February bill minus $20 credit balance minus $45 payment). On or after March 1, the customer must renegotiate payment arrangements. Options available include calculating a new regular level payment amount, making special payment arrangements to pay off the $60 balance owing over a prescribed length of time, or paying the balance in full and paying future bills as they become due.

*At the customer’s request, the utility may recalculate the monthly payment amount following receipt of a LIHEAP or other “bulk” financial assistance payment.

Example 4
Customer eligible for LIHEAP but fails to make payment. The customer’s regular level pay amount (based on estimated annual usage plus the past due balance of $100 divided into 12 monthly installments) is $90. The customer’s monthly payment amount under the Winter Protection Program for December, January and February is $45, one-half the regular level payment amount. The customer fails to make the initial $45 payment in December as agreed and the utility has not yet received Energy Assistance benefit payment on behalf of the customer. The customer fails to respond to 7 day and 24 hour notices from the utility and is disconnected. The customer pays the $45 owing under the WPP agreement and service is restored. The utility includes the reconnection fee on the January bill. PacifiCorp will request a deposit, payable with the January bill. Intermountain Gas will also request a deposit, but will bill it separately after February. The utility receives an Energy Assistance benefit amount of $250 in January, which is applied to the customer’s actual balance of $250 ($100 balance carried forward plus $75 bill for December, the $100 bill for January, and a $20 reconnection fee minus the $45 payment made in December.) * In the case of PacifiCorp, the deposit amount would also be carried forward on the customer’s account. The customer pays $45 in February. On or after March 1, the customer must renegotiate payment arrangements. Options available include calculating a new regular level payment amount, making special payment arrangements to pay off the balance owing over a prescribed length of time, or paying the balance of $80 ($125 February bill minus $45 payment) and paying future bills as they become due. In the case of PacifiCorp, the customer would also owe the deposit.

*At the customer’s request, the utility may recalculate the monthly payment amount following receipt of a LIHEAP or other “bulk” financial assistance payment.

Example 5
Customer not eligible for LIHEAP. The customer does not qualify for the WPP and must pay bills as they become due. Other payment arrangement options are available. The customer’s regular level pay amount (based on estimated annual usage plus the past due balance of $100 divided into 12 monthly installments) is $90. Alternatively, the customer may negotiate a special payment arrangement tailored to his or her particular circumstances. The utility may disconnect service if the customer fails to pay bills as they become due or to keep a payment arrangement. If disconnection occurs, the customer must pay the past due balance plus a reconnection fee and a deposit.