Press Release

PUC Increased Penelec Settlement Concerning Terminations in Hastings, Erie, Directs Money to Help Low-Income Customers

Published on 12/15/2005

Filed under: Electric

HARRISBURG – The Pennsylvania Public Utility Commission (PUC) today increased the amount Pennsylvania Electric Company (Penelec) will pay to help low-income customers in order to settle an informal investigation into the company’s termination practices.

“The public interest would be better served if the proposed $250,000 civil penalty were instead directed to be a contribution to the Dollar Energy Fund,” said Commissioner Bill Shane. “I also believe a real difference exists between a civil penalty and a contribution that warrants a higher contribution amount.” (Motion by Commissioner Shane)

Commission Chairman Wendell F. Holland added, “With today’s action, this Commission sends a clear and powerful message to not only Penelec and its parent company FirstEnergy, but to all utility companies that this Commission is watching and will not tolerate illegal terminations,” said Commission Chairman Wendell Holland. “Utility companies will have to answer for the manner in which they terminate service to customers. And we expect the answer to be that the exact letter of the law was followed if a customer’s utility service must be terminated.”

The Commission voted 3-2 to approve a $250,000 contribution by the company to be paid to the Dollar Energy Fund. It also increased the settlement by $100,000 with that money being directed to the Penelec Customer Assistance Program (CAP).

“By unilaterally increasing the amount of the contribution in a final order, without giving the parties advance notice and an opportunity to be heard, the Commission has deprived the parties of due process,” said Commissioner Terrance Fitzpatrick in his dissent.

The Dollar Energy Fund is a non-profit organization that provides financial assistance to customers who are on a low or fixed income. CAP programs are established between the utility company and a customer to allow low-income, payment-troubled customers to pay their utility bills. Qualification in the CAP program is based on household size and gross household income.

The Settlement Agreement, reached between the PUC’s independent Prosecutory Staff and Penelec in October, followed 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. Many of these changes have already been implemented.

According to the PUC’s Prosecutory Staff’s Statement of Support of the Settlement Agreement, Penelec violated provisions of the Public Utility Code and Commission regulations in terminating electric service. Penelec denies those assertions.

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.

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 referrals to budget billing;
• Recognition of disputes and relaying rights to consumers;
• Length of payment agreements for reconnection of service; and
• Practices for reconnection upon receipt of a valid medical certification.

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

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