PSEG power shutoffs for nonpayment jump 24% in April year over year

The number of PSEG Long Island customers who had their power shut off for nonpayment jumped 24% in April compared with a year ago, and has increased steadily since January, according to state figures.

PSEG suspended shutoffs earlier this month following revelations of aggressive collection practices, including the threat of shutoffs, and a subsequent state probe. That move will likely reduce reported terminations sharply in May.

A PSEG spokeswoman didn't return a message seeking comment, including to say when the shutoffs would restart. 

Across Long Island and the Rockaways in April, 3,542 residential customers had their power shut off by the utility for nonpayment of their electric bills, compared with 2,582 for the month a year ago. In addition, 2,795 were reconnected during month, with most customers agreeing to a deferred payment plan. A year ago there were 1,958 reconnections during the month.

Terminations have steadily increased this year compared with prior months, with 1,201 terminations in January and 1,535 in March. About 54,000 customers were on active deferred payment agreements by month’s end compared with 56,165 at the end of April last year.

The year-over-year jump in shutoffs for the Long Island Power Authority territory comes despite a significantly lower number of customers in arrears this April compared with last. The total number of customers who were 60 days or more late paying their bill totaled 82,805 this April, owing some $69.2 million, compared with 110,604 late payers a year ago, who owed $74 million.

The figures come as the Department of Public Service launched a statewide probe this month following revelations in Newsday of aggressive collection tactics by PSEG Long Island, which were outlined in a recording of an industry conference in Florida earlier this year. PSC chairman Rory Christian ordered 11 state utilities to provide expansive documentation about their collection practices, and PSEG apologized about the matter last week.

The jump in shutoffs comes as utility bills skyrocket, with the power supply portion of bills up cumulatively around 30% this year and reaching record highs. Richard Siegelman, a Plainview ratepayer who regularly tracks his electric costs, said the per kilowatt-hour cost of his electric bill hit 34.5 cents for his March-May bill, from 28.9 cents a year ago, a 19% jump. The cost per kilowatt-hour is calculated by dividing the total bill by the total kilowatt-hours used.

At the Florida collections conference, a former PSEG supervisor told attendees how he conditions customers with termination notices to increase the likelihood of paying arrears. 

As a result, he said, termination notification emails that recorded a 25% success rate climbed to more than 60% "because they [late paying customers] know, now they're starting to learn the cycle. 'Once I get this email, I know what the next action is going to be. If I don't respond to that email, I know what's going to happen next.' The people think much better in the dark."

At a LIPA board meeting last week, Scott Jennings, the newly named president and chief operating officer of PSEG Long Island, said, "I personally and the entire PSEG team are in complete agreement that those comments by our former PSEG employee were totally unacceptable." He added, "We own the issue, we’ve taken this very seriously and we apologize for his comments."

Laurie Wheelock, executive director of the Public Utility Law Project, a consumer advocacy group, said anecdotal evidence suggests the decline in the residential arrears may be tied to aggressive collection practices that dangle the threat of a shutoff and larger payments once a customer has already defaulted on a prior deferred payment plan.

"A lot of our folks feel pressured, or they give in and put it on a credit card at a high interest rate because they’re so nervous about losing their power," Wheelock said. Some put payments on multiple credit cards.

In working with those having difficulty paying, PULP emphasizes "flexibility" on the part of the utility and a greater willingness to accept partial payments.

"We have individuals who only get Social Security once a month, so they have to stretch out that money and sometimes they do payments every week, $50 or $75" at a time, she said. Some utilities, she said, won’t accept that. "They say, 'You have to pay the full amount,’ and so it becomes a struggle and then it looks like they’re not trying and it gets harder to negotiate because they haven’t paid in six months but they’re trying."

Last week, Wheelock and AARP New York State director Beth Finkel filed papers in connection with the state investigation of collection practices calling for more transparency among utilities required to produce documents. Some companies have filed requests to be exempted from disclosure in the proceeding, which PULP and AARP strongly opposed. Others, they charged, filed only cursory documentation.

"We are deeply concerned by the companies’ varying degree of responses," she wrote.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.