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Ralph Nader > In the Public Interest > Punitive Blackouts

Last October 21 six children, brothers and sisters, died in a house fire in Sacramento, California. The fire was started by two candles which were burning unattended in the living room and the resultant flames, smoke and fumes from the combustible household furnishings overcame the children in their upstairs bedrooms. The candles were being used because the utility company had shut off the electricity for nonpayment of an overdue $28 electric bill.

It does not take a seer to predict that people will use candles or other makeshift lighting sources when their electricity is cut off. Similarly, discontinuance of gas service can lead to hazardous temporary substitutes for home heating. Stopping telephone service by the telephone company can likewise lead to tragedies in emergencies where contact must be made with physicians, police or other authorities.

Yet state regulatory commissions permit discontinuance of service for alleged nonpayment of bills or portions thereof with only a few days’ written notice. These state rules establish the most general criteria for permitting such discontinuance which has meant, in effect, that the utility has the broadest discretion to decide for itself.

Suppose the homeowner or customer has a dispute with the utility over the bill. Suppose the customer has legitimate difficulties in paying the bill. Suppose the deciding person in the company has a dislike for anyone who complains about deception or fraud or poor service and retaliates by discontinuing service. Suppose the company has a pattern of discontinuing service to poor people or minority group members while treating people in more well-to-do circumstances who dispute service or bills with greater “understanding.”

Whatever the causes for nonpayment, electric, gas and telephone service are critical. Such legally monopolized services require stricter standards in resolving such disputes than for ordinary businesses. At the present time, the decision to discontinue service is unilaterally made by the utility, frequently by someone in the credit office. Service has been cut off by utilities for unpaid bills as low as $10 to $30.

Often, customer disputes are over issues fundamental to the utility’s responsibilities to the public such as deposit and penalty policies, service interruption, meter reading, billing practices, and safety matters. To beat down such consumer complaints with the warning that service will be discontinued is not a corporate practice which should be tolerated for any legalized monopoly.

A separate consumer-utility grievance office should be established under the auspices of the state regulatory commission. It should be insulated as much as possible from political intrusions. The law or regulation creating it should provide for nonpartisan membership and full disclosure of the office’s practices and reasons for decisions. The complaint-handling process should be informal, expeditious but fair with a written explanation of the decision. Legal assistance should be provided consumers who do not know how to present their case, much like a good small claims court should operate.

The National Association of Regulatory Utility Commissioners (NARUC) should conduct a study of service discontinuances and the overall need to establish grievance offices. NARUC, which has been issuing some consumer-protection sounding statements recently, did compile last year a report on utility billing practices which, among other findings, showed that utilities impose outrageously high penalty charges for overdue bills. It is now time for this organization of state utility commissioners to show that systematic handling of consumer complaints can focus quickly on abuses and point the way to more basic reforms.