Consumer Advocates Offer Recommendations to PUCO Rules

Recently, Ohio residential consumer advocates were invited by the Public Utilities Commission of Ohio (PUCO to file comments of on the rules governing the connection, disconnection and reconnection of gas and electric service and Ohio’s low income assistance program the Percentage of Income Payment program Plus (PIPP Plus) as part of the PUCO’s five-year review. Collectively, the consumer advocates are the only voice for everyday residential consumers before the PUCO, who makes and enforces rules regarding: utility security deposits, appropriate proof of consumer creditworthiness, and the timing and manner of shut off notices. This case is the only place where advocates can make recommendations on behalf of low- income customers who depend on the PIPP Plus program to get and/or remain connected to their utility to have heat and lights. These rules affect over 7 million customers who get gas or electric utility service from one of the regulated utilities in Ohio such as Duke, First Energy, AEP, or Columbia Gas, to name a few.

Consumer advocates urged the adoption of rules or changes to the rules in order to protect customers and maintain service without undue harm to utilities. In addition, the advocates made recommendations to improve PIPP Plus, which makes electric and gas payments affordable for low income Ohioans. The PIPP Plus program was created almost 3 years ago when the “Plus” was added to the existing PIPP program to provide arrearage forgiveness to many residents who had built up significant utility debt. The consumer advocates made the following recommendations for the Credit and Connection rules:

•  Reduce utilities’ use of Social Security numbers to reduce the risk of identity theft
•    Make security deposit requirements reasonable and affordable
•  Connect service within a reasonable time after a request for service has been made

Similarly, the advocates also offered suggestions when disconnection or reconnection of service is an issue:

•   Forbid landlords from using utility shut-offs to force tenants to move
•  Require reconnection soon after payment is received if service is disconnected for nonpayment
•   Make tenants liable only for service for the times that they actually rent and occupy a unit
•   Create uniform rules and allow online access to forms for  both residents with health emergencies and their healthcare providers to request temporary waivers of payment during health emergencies

 This is only a sample of suggestions made by the consumer advocates.  Click here and here to see all of the topics covered.  Use this link to see the current rules and the rule changes proposed by the Staff of the PUCO.

 As mentioned previously, consumer advocates also made numerous recommendations to improve the PIPP Plus program, such as:

•  Maintain a hardship exemption to waive the $10 minimum payment for up to six months
•  Allow customers the benefits of arrearage forgiveness if they fully or partially pay in advance
•  Extend the time periods for customers cycling off PIPP Plus (for whatever reason) to provide payment schedules that are reasonable and affordable
• Allow the transfer of delinquent accounts to a PIPP Plus account
•  Provide a more expansive definition of “on-time payment.”

 Our positive recommendations will only improve the current rules, and we hope that the PUCO agrees and adopts many of these recommendations. The consumer advocates who jointly submitted comments include:  the Ohio Poverty Law Center (OPLC) as well as most of the legal aid programs in Ohio, the Ohio Partners for Affordable Energy (OPAE), the Ohio Consumers’ Counsel (OCC), the Citizens’ Coalition, the Coalition of Homelessness and Housing in Ohio (COHHIO), the Ohio Association of Area Agencies on Aging (OAAA), the Ohio Association of Community Action Agencies (OCAA), and the Ohio Association of Food Banks.

OPLC Fights to Preserve Ohio Consumers’ Access to Landline Telephones

This piece was written by OPLC Staff Attorney Joe Maskovyak.

The legislature has adjourned for the 2011-12 term, and opponents of SB 271, including OPLC, can breathe a little easier knowing that SB 271 died a quiet death when this legislature adjourned for the final time.  The breathing will only be a little easier, since the powerful telecommunications (telecom) lobby is certain to find a champion to reintroduce SB 271 – the latest telecom deregulation bill – soon after the new legislature convenes in January.

SB 271 was the latest in a series of telecom dereg bills, designed to grant increasing freedom to to the phone companies, all of which have been written and supported by the industry,  ostensibly to promote “progress and investment” in Ohio.  Of course, as is often the case, the guise of “progress” comes with a price.    SB 271 essentially would allow the market (assuming there is one) to regulate the price of landline telephone service, and the Public Utilities Commission of Ohio (PUCO) would not be able to establish any price caps on the cost of your phone rates.  Along with the end to price caps to protect consumers who could be gouged by unlimited rate increases, consumers would also see the elimination of what few consumer protections remain in the PUCO rules. Minimal protections, such as getting a phone installed within five days from the date you order and pay for services, or having the phone company reimburse you for outages if they take more than three days to repair them, would have gone away.  These are examples of regulations which phone companies apparently find too onerous and burdensome in conducting business.

SB 271 would have paved the way for landline operators to get out of the business of maintaining their existing lines.  This could lead to a host of problems.  Phone companies only had to show there was some competition but not necessarily competition to all communities.  Consequently, it is quite possible, especially in rural southeast Ohio, that a landline provider could withdraw from an area where cell phone coverage is spotty or nonexistent.  If your cable provider uses that same landline to transmit its signal, and the landline telephone provider leaves, you can also say good bye to your cable.   Alternatively, if you have cell phone coverage but no cell phone, you may be forced to buy one, even if you cannot afford to pay the cost for a new cellphone or for service, if you want to stay connected.

Finally, SB 271 would have signaled the end of Basic Local Exchange Service (BLES).  This is a no frills service that allows unlimited calling for a small flat rate for those who do not want or need more service.  Together with the end of BLES, “Lifeline” service, which allows affordable phone service for the very poor, could also have gone extinct.  This is because Lifeline is priced as a discount from BLES service.  How can one discount from something that no longer exists?

The extra time granted by the death of SB 271 should allow more time to better study a radical proposal that was rushed through the Senate and seemed to be gaining momentum before this legislative session ended.  OPLC believes there should be more time to study what would be a transformation of the telecom landscape.  In fact, the last telecom bill we saw in the legislature, SB 162, which passed in late 2010, statutorily created a study committee to report on that bill’s deregulation impacts.  A report is not due until 2014.  Sadly, the study committee has never been convened, much less begun to discharge its reporting duty.  Hopefully, there will be time for this committee to meet and report about the impacts of the last round of deregulation before we make decisions on further telephone deregulation in the next legislative session.

In the interim, however, we need stand vigilant to the reintroduction of a new telecom dereg bill similar to SB 271, which we at OPLC fully expect to occur when the legislature reconvenes in January 2013. We need to tell our legislators to tread slowly and carefully and to refuse to pass a new bill without full examining all of the possible consequences.  Consequently, we need to push our legislators to convene the SB 162 Study Committee to examine what has occurred thus far in the industry (which was the intent of the statutory creation of the committee when the last telecom bill was passed) before we take away consumers’ lifelines and/or landlines.  OPLC will be monitoring these issues in the next legislative session, and will report back with details about any new developments.

Check out OPLC’s talking points on SB 271 here.  Contact Joe Maskovyak at jmaskovyak@ohiopovertylaw.org or Mike Smalz at msmalz@ohiopovertylaw.org if you’d like more information about this or any other telecommunications deregulation issues.

PIPP Plus Program Has Eliminated Half Billion Dollars in Low Income Customers’ Utility Arrears in 2011

Good news for low-income Ohioans struggling to pay their utility bills:  major changes to Ohio’s Percentage of Income Payment Plan (PIPP) program that went into effect in November 2010 have lowered costs for customers.

The new program, PIPP Plus, lowered combined gas and electric monthly PIPP payments from 15% of the PIPP customer’s income to 12% (6% gas and 6% electric).  Moreover, if customers make their full monthly payment on time, they accrue no new utility arrears (for the difference between the PIPP payment and the actual bill charge), and one twenty-fourth of their existing electric or natural gas that is erased.  If a customer makes 24 consecutive payments, in full and on time, the entire debt will be forgiven.  Income eligibility remained at or under 150% of the federal poverty level for a household.

The Office of Consumers’ Counsel (OCC) has analyzed data for 2011, the first full year of PIPP Plus.  The data is remarkably positive.  On average, more than 72% of the payments made by customers enrolled in PIPP Plus during 2011 were submitted in full and on time.  The utilities also reported that nearly $500 million in arrearage credits were awarded to PIPP Plus customers who were current with their payments.

The average monthly PIPP Plus payment was slightly under $54 in 2011.  This averages to approximately $647 paid throughout the year towards electric and natural gas bills.

The PIPP Plus changes did not materialize overnight.  Beginning in the late 1990s, legal aid advocates—including Noel Morgan (Legal Aid Society of Southwest Ohio), Ellis Jacobs (Advocates for Basic Legal Equality), Joe Meissner (Legal Aid Society of Cleveland), Mike Walters (Pro Seniors), and Mike Smalz and Joe Maskovyak (Ohio Poverty Law Center)—joined with OCC in pushing for lower monthly PIPP payments and a PIPP arrearage crediting program.  Advocates won a partial victory with the passage of the first electric restructuring bill—Senate Bill 3—which eliminated pre-2000 PIPP electric debt for many elderly and disabled electric customers.  Additional years of advocacy—converging with the desire of Ohio Department of Development staff to incentivize more consistent and timely monthly payments by PIPP customers (and fewer resulting service disconnections and reconnections)—culminated in the adoption of the PIPP Plus program rules in November 2010.

The PIPP Plus program has not eliminated all payment, disconnection and reconnection problems for low-income utility consumers in Ohio.  PIPP Plus customers still have a higher energy burden (percentage of utility payments relative to income) than middle- and upper-class households.  Moreover, the PUCO has taken steps to pressure utility companies, especially natural gas companies, to move more quickly to terminate service to customers who fall behind in their payments.  PIPP Plus customers who miss two consecutive monthly PIPP payments can be terminated from PIPP and have their service disconnected.  Nevertheless, the implementation of the PIPP Plus program—taken as a whole—was a huge victory for low-income utility advocates and should ultimately wipe out billions of dollars in low-income customer utility arrears.

OPLC Urges Ohioans to Speak Out Against SB 271, Telephone Deregulation

OPLC sent a letter to several Ohio newspapers last week urging them to speak out against SB 271, a bill that would deregulate telephone providers, releasing them from any obligation to provide landline phone service to all Ohioans.  This move could leave many Ohioans, especially in rural and impoverished areas, with NO reliable telephone service.

Dear Editor:

As representatives of rural, lower-income, and elderly Ohioans, we would like to encourage you to editorialize against Senate Bill 271 (SB 271).

This bill would allow some of Ohio’s landline telephone companies to withdraw their basic telephone services from customers. Basic Telephone Service is what consumers know as “plain old telephone service”, with no frills and unlimited local calling for one flat charge.

The guarantee of landline telephone service to every Ohio home is a legal right many of us never even thought to question. But AT&T and Ohio’s landline telephone association are lobbying to get rid of the age-old consumer protection known as the “carrier of last resort.”

Telephone communication is a basic necessity, allowing Ohioans to maintain social contact, preserve health and safety, and gain assistance in an emergency. And while some Ohioans have a preference for landlines, many still have no other realistic choices.

Landlines from the traditional phone company are still the only option for affordable and reliable telephone service for many Ohioans. In fact, three-quarters of all Ohioans still have a landline telephone.

SB 271 would allow some telephone companies to start withdrawing their basic landline telephone service, or charge any price for their services, with very little notice to the consumers so long as they have met a showing of limited telecommunications competition.

The deeply flawed “competitive test” only requires a utility to show that there are two other companies offering some telecommunications service at a single point within each of their exchanges.

The test does not require these alternatives to be available to all customers, nor does it require the alternatives to be cost-competitive or reliable. So essentially, if AT&T and Verizon Wireless claim there is cellular service in your area, your area likely would meet the state’s competitive test.

AT&T, Cincinnati Bell, and two other smaller companies have already met this test in their entire Ohio Service Territory (highlighted in the pink map in the fact sheet from the Office of the Ohio Consumers’ Counsel).

If SB 271 passes, the landline telephone customers in those areas will be in danger of losing their basic landline service.

The telephone utilities in the other areas of Ohio would be able to start withdrawing telephone services after having met this weak “competitive” test in their exchanges, too. Many of Ohio’s urban areas may have good cell phone service and this may be an acceptable, although more expensive and less reliable, alternative for some customers. However, other areas like rural Appalachia have spotty cell coverage at best—and AT&T would be allowed to hang up on those customers, too.

There is also an affordability concern with the proposed bill. SB 271 is essentially a back-door rate increase for telephone companies allowing them to no longer offer the most affordable telephone service option.

SB 271 would enable the phone companies to force Ohioans who rely on basic local telephone service (which is the cheapest landline option) to purchase more expensive bundles or packages of services. And these more expensive services are not subject to any of the consumer protections that Ohio law now provides to assure reliable and quality service.

In addition, Ohio’s telephone laws were just updated last year. The 2010 overhaul of Ohio’s telephone regulations went into full effect in 2011 through a 100+-page bill that deregulated major aspects of the telephone industry and allowed some of Ohio’s telephone companies to increase basic telephone rates by $1.25 per month each year—in perpetuity. Throughout the debate on that bill, the telephone industry claimed that they were leaving some important consumer protections in place—and those are the very consumer protections that SB 271 would eliminate.

The ink has barely dried on their last bill, and they are back asking for more. SB 271 bill scraps the $1.25 rate increase and replaces it with unlimited rate increases with fully deregulated telephone services.

The 2010 telephone law also required a Select Committee to form to review the impact of that Bill on consumers.

This review would theoretically hold the utilities accountable for the promises of new jobs and new investments they would make in return for further deregulation. This committee has not even formed yet, let alone issued a report.

Even worse, AT&T’s own testimony to the legislature on the respective telephone bills shows that they have reduced their Ohio workforce by about 3,000 people since the General Assembly was debating the 2010 law.

However, AT&T has still found the funds to hire 21 lobbyists to fight for this bill. Including AT&T, telephone utilities, and their associations, there are a total of at least 34 lobbyists pushing Ohio legislators to cut the cord on their constituents.

Lawmakers in other states—Kentucky, Colorado, and New Jersey—recognized the burden that higher, unaffordable rates posed for vulnerable segments of their constituents, and they soundly rejected this pro-utility legislation.

We encourage you to advocate that the General Assembly cut the cord on SB 271—not allow the phone companies to cut the cord to Ohio’s landline telephone customers.

Contributing and supporting authors:

Michael Smalz and Joseph V. Maskovyak, Appalachian Peace and Justice Network;
Ellis Jacobs, Edgemont Neighborhood Coalition (Dayton);
Michael A. Walters, Pro Seniors, Inc.;
Edyael Casaperalta, Center for Rural Strategies;
Noel Morgan, Legal Aid Society of Southwest Ohio,
Representing Communities United for Action.