Support for SB 971/HB 1255: Public Service Companies Alternative Payment Plans

By Julie Varner Walsh, Associate Director for Social Concerns

Senate Finance Committee (March 17) and House Economic Matters Committee (March 12, 2010)

The Maryland Catholic Conference represents the public policy interests of the three Catholic (arch)dioceses serving Maryland, which include the Archdioceses of Baltimore and Washington, and the Diocese of Wilmington. We offer this testimony in support of Senate Bill 971.

SB 971 would require the Public Service Commission to promulgate regulations limiting the authority of public service companies to terminate residential customers’ gas or electric service for nonpayment without offering alternative payment plans. Public service companies would be required to provide notice to residential customers of the option to enter into reasonable payment plans at least 14 days prior to service shut-off for nonpayment. The bill would also require public service companies to offer residential customers with hardships (such as job loss or illness) reasonable payment plans to enable them to pay down their arrearages while keeping services on.

As Marylanders experience unemployment and economic hardship at levels that have not been seen in decades – while energy costs remain high – more are finding themselves unable to pay their utility bills in their entirety. In some cases, hardships have lead families to have trouble paying their bills for the first time. In low-income households, high energy bills may even approach the cost of a household’s rent or mortgage. Such situations put gas and electric customers at risk of having their services terminated due to lack of payment.

Rather than resorting to wholesale service terminations, we ask that public service companies be required to offer customers the option of entering into alternative payment agreements. The payment agreements should consider customers’ circumstances and financial conditions, and encourage full repayment over time. Such agreements would ensure that households have the energy they need to maintain their life, health, and safety, while also ensuring that public service companies ultimately receive the payments they are due.

The Conference respectfully urges a favorable report for SB 971. Thank you for your consideration.