Press Release

PUC Considers Settlement with Penelec over Terminations in Hastings, Erie, Directs Money to Help Low-Income Customers, Seeks Public Comment

Published on 10/6/2005

Filed under: Electric Gas

HARRISBURG – The Pennsylvania Public Utility Commission today considered a $250,000 Settlement Agreement with Pennsylvania Electric Company (Penelec), and added a stipulation that the utility will deposit the entire sum into its Customer Assistance Program (CAP), which helps its low-income customers pay their bills. The Commission will accept public comment on the order for 20 days.

“The winter heating season is fast approaching and energy prices are rising,” said PUC Chairman Wendell F. Holland. “It is vitally important that this Commission do everything within its power to provide truly needy customers with assistance in paying their heating bills. Hopefully, providing additional funds to Penelec’s program will mitigate the occurrence of unfortunate events in the future.”

The settlement agreement, reached between the PUC’s independent prosecutory staff and Penelec last week, follows informal investigations into the utility’s termination practices that preceded a fatal fire in Hastings, Cambria County, and injuries in an Erie fire. In the settlement, Penelec also agreed to implement changes in its business practices, particularly those related to service terminations.

Recently, civil penalties paid to the PUC are directed to the state’s general fund; however, the Commission felt the money should be directed to help low-income customers. The $250,000 will be in addition to the money Penelec already contributes to its CAP program.

The agreement also provides that the penalty will be paid by the utility and will not be recovered in rates paid by customers.

A motion by PUC Commissioner Bill Shane to increase the settlement by $100,000 and dedicate that money to the $ Energy Fund was defeated by a vote of 2 to 3.

The informal investigations centered on the May 11, 2005, termination of electric service at 334 Miller St. in Hastings and the June 27, 2005, termination of electric service at 328 E. 5^th St., Erie. Following the termination in Hastings, fatalities resulted from a fire on May 14, 2005, which according to media reports was caused by an unattended candle.  Following the termination in Erie, a July 3, 2005, fire led to injuries to two children.  According to police reports, the fire was caused by an overloaded extension cord running from another apartment.

Penelec violated provisions of the Public Utility Code and Commission regulations in terminating electric service and the events leading up to those terminations, according to the PUC’s Prosecutory Staff’s Statement of Support of the Settlement Agreement. Penelec denies those assertations.

In addition to the financial settlement, Penelec has agreed to improve the following:

• Referrals to the CAP;
• Explanations of medical certification information provided on calls concerning termination notices;
• Procedures for making payment agreements and placement of budget billing;
• Recognition of disputes and relaying rights to consumers;
• Length of payment agreements for reconnection service; and
• Practices for reconnection upon receipt of a valid medical certification.

On Sept. 9, 2005, the PUC directed electric, natural gas and water utilities to coordinate with the PUC, consumer advocates and community-based organizations to educate Pennsylvanians about changes in the law dealing with utility shut-offs. 

The message is:   “Prepare Now” for higher energy costs this winter.  Learn about changes in the law related to utility shut-offs and know your rights.  Save money by learning how to conserve energy.  Budget billing and special programs can help you manage your bill.  Heat your home safely.  “Prepare Now,” before cold weather arrives.  Visit www.puc.state.pa.us/utilitychoice/preparenow, and click on “Prepare Now” or call the PUC at 1-888-PUC-FACT.

The Pennsylvania Public Utility Commission ensures safe, reliable and reasonably priced electric, natural gas, water, telephone and transportation service for Pennsylvania consumers, by regulating public utilities and by serving as responsible stewards of competition.

For recent news releases, or more information about the PUC, visit our Internet homepage at www.puc.state.pa.us.

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Docket No. M-00051906

Contact:

• Cyndi Page
  Sr. Communications Specialist
  717-214-5434
  cypage@pa.gov