Consumer lawyers decry PGW's shutoff policy

December 20, 2008

Dave Davies, Philadelphia Daily News

As winter weather takes hold of a city in a slumping economy, consumer lawyers say the city-owned Philadelphia Gas Works is being too tough on its poorest customers.

A recent state Public Utility Commission survey found that more than 6,000 PGW customers are without heat because their service has been shut off for nonpayment, and Community Legal Services attorney Jonathan Stein said PGW makes it harder than do other utilities for delinquent customers to get their gas turned back on.

"There are two standards - one for PGW and another for the rest of the state," Stein said in an interview yesterday.

Stein noted that this fall, the PUC urged utilities to restore service to delinquent customers who get a federally funded energy grant paid to the utility, without demanding an up-front reconnection fee.

PGW won't do that, even though investor-owned utilities like Peco Energy will. PGW's re-connection fee is $123.

PGW Vice President Steven Hershey, himself a former CLS attorney, said the Gas Works has long provided discounts to low-income users through its customer- responsibility program.

"Right now, the average heating customer not on CRP pays about $300 a year to support customers who are either on CRP or not paying the full freight," Hershey said yesterday.

"Many of those who have to pay that are themselves low-income or working-poor customers," Hershey said. "As you relax the rules, that $300 figure will increase, because costs will increase."

The 6,200 PGW customers without heat this winter represent a 13 percent increase over last year, and Stein said one reason for the jump is another PGW policy: When a customer gets a common federal energy grant, the money goes not into the customer's delinquent PGW account, but into PGW's general fund to assist low-income customers.

"It creates a disincentive for customers to apply for energy assistance, because they don't see any concrete change in what they owe," Stein said.

Hershey said that Gas Works' program for low-income families gives them a steep discount, requiring them to pay only 8 percent to 10 percent of their income for heat, no matter what it costs the utility.

Requiring those customers to apply for an energy grant for PGW in return for the discount they get is reasonable, Hershey said.

Hershey said that policy and others could be re-evaluated, but he said it isn't realistic to expect that PGW ratepayers meet all the energy needs of the city's poor.

A report on PGW by the Pennsylvania Economy League found the utility in a financially precarious position, with heavy debt and a poor and shrinking customer base.

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