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Council to hash out Austin Energy issues in committee meeting

Thursday, December 5, 2013 by Michael Kanin

With Council Member Kathie Tovo pushing hard to gain approval of an ordinance that would offer more leeway for Austin Energy ratepayers in deep arrears on their bills, utility officials remained leery of the plan. It will all be hashed out this afternoon as Council members meet for their monthly Austin Energy Committee meeting, which is also a special called Council meeting.


If approved, Tovo’s ordinance would formally extend the number of payment arrangements delinquent ratepayers can enter into, among other changes. Council debate on the matter was delayed Nov. 21, after Council Member Bill Spelman argued that fuller debate in committee was warranted.


Spelman, too, has expressed concerns about the measure. During a work session Nov. 19, Spelman cast the proposal as something that might throw ratepayers into a worse situation. “We need to give people an opportunity to make some headway,” he said at the time – a suggestion that the Tovo proposal might leave some customers with a debt that never disappears.


Utility officials have been vocally opposed to Tovo’s idea. In the wake of the Nov. 19 discussion, Austin Energy Vice President of Customer Care J.J. Gutierrez told In Fact Daily that Tovo’s plan would force the utility into an uncomfortable position.


“All of our research shows that if we continue extending payment arrangements to customers who have defaulted on previous payment plans, they end up owing more than when they first asked for help. Their debt continues to accrue because they keep defaulting on their plans. It is a losing proposition for them,” said Gutierrez at the time. “It is similar to credit card debt. If you just make minimum payments and you don’t pay off your balance, you keep falling further and further into debt,”


Then, Nov. 26, Austin Energy General Manager Larry Weis issued a memo that offered something of a compromise. In it, Weis detailed a level of flexibility that the utility was prepared to extend. “Since June 2012, Austin Energy has suspended the regular payment arrangement program and offered customers special payment arrangements. These special payment arrangements do not require a down payment and allow longer repayment periods (12 months or more) if required,” Weis wrote.


“During this time, customers have also been allowed to enter into up to three different payment arrangement agreements. We will commit to continue to offer these special payment arrangements to customers during an interim period up to May 2014, while staff responds to Council Resolution 20131107-052 by working with the Discount Steering Committee and consumer advocates to develop revised rules for deferred payment plans and service disconnections.”


The committee Weis refers to is currently engaged in discussions over a longer-term solution to the situation. It includes Austin Energy officials and consumer advocates.


In the memo, Weis also suggested that in the interim the utility would also offer “a fourth payment arrangement and… (remove) the 50 percent down-payment requirement for reconnection, with the first installment being the down payment” and reminded Council members that “the extreme weather moratorium which suspends customer disconnections will be invoked on days where the temperature is forecast to be below 32 degrees or below 35 degrees with 50 percent precipitation.”


Weis also continued to urge Council to avoid making any new rules. “Regarding the proposed substitute ordinance, we continue to have serious concerns and again urge you to not codify what have historically been administrative guidelines for our collections and payment arrangement procedures,” he wrote. “The ordinance reduces the flexibility that we currently have in dealing with our customers, reducing staff’s ability to negotiate the repayment solution best suited for the customer to successfully reduce their debt in a timely manner.”


For Tovo, this isn’t enough. “I’m pleased Austin Energy has implemented one of our proposed ordinance amendments: namely that disconnected customers will no longer be required to pay 50 percent of their bill to restore service and the remainder of their bill within 15 days,” she told In Fact Daily via email. “But I believe Council should consider other measures to protect our neediest customers from being disconnected during impending cold weather while the committee works to develop revised rules for payment arrangements, and I believe codifying those measures in ordinance form offers the best protection for customers.”

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