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City utilities devise plan to help with unpaid bills

Tuesday, March 28, 2017 by Jack Craver

Austin’s two city-owned utilities are teaming up to help some of the city’s most indebted customers catch up on unpaid bills.

Beginning this summer, the joint effort between Austin Energy and Austin Water will target 543 customers who participate in AE’s low-income customer assistance program and owe between $1,750 and $3,000 to the utilities.

Those 543 customers owe roughly $1.25 million in unpaid electric bills, Peter McCrady, an AE spokesperson, told the Austin Monitor. The amount the utility spends on the program, as well as the amount it recovers, depends on how many of those customers participate and pay back all or some of their bills, he said.

The figures for Austin Water are far more modest. Joseph Gonzales, a finance manager for AW, said in an interview that the utility expects to recover $750,000 over three years that it “might have a challenge collecting otherwise.” AW expects to spend $250,000 during that period to administer the program.

“When the new system was implemented, there were issues that helped contribute to these balances growing over time, and this program is intended to help those customers pay down those balances,” he said.

The origin of the program is a resolution passed by City Council in November 2013 that called on the city manager to work with customer advocates to develop an “arrearage management plan … including strategies for incentivizing customers for honoring payment agreements.” A task force that met between January and May in 2014 recommended the approach that the city will finally begin three years later.

Similar programs are run by utilities throughout the country.

“It’s taken a long time,” said Carol Biedrzycki, executive director of the Texas Ratepayers’ Organization to Save Energy, who was a member of the task force and spoke in favor of the new program at a meeting of the Austin Energy Utility Oversight Committee on Monday.

Engaging with heavily indebted customers is a winning solution for all parties, she said. The utilities will end up recovering more money than if they simply shut off service and can prevent significant suffering.

“Electricity and water are essential services, and people need them,” Biedrzycki said, adding that having electricity or water turned off is grounds for eviction or for child protective services to take a person’s children away.

Mayor Pro Tem Kathie Tovo agreed, citing “heart-wrenching” accounts she had heard from those who are hopelessly behind on their bills, including people who depend on electric medical devices.

While AE will fund the program through the community benefit charge that currently funds the customer assistance program, AW will fund the first year of the program through existing funds. In the future, however, AW hopes to establish a community benefit charge devoted entirely to funding its own existing customer assistance program and the debt arrearment program.

In a memo last week to Mayor Steve Adler and Council, AW Director Greg Meszaros said that the new charge, which he will ask Council to approve in the Fiscal Year 2018 budget, will be accompanied by a decrease in the standard volumetric water rate, so that customers will not be paying more for water.

The only skepticism of the program voiced on Monday came from environmental activist Paul Robbins, who told the committee that he was concerned that the cost of administering the program would divert funds that would otherwise be used on the customer assistance program.

“Do you want to be in the position of denying future CAP customers because of this program?” he asked.

Biedrzycki later dismissed that suggestion, saying the increased revenue would more than make up for cost. “I don’t have any concerns about this having a harmful effect on innocent bystanders,” she said.

This story has been corrected. We originally reported that the total amount of unpaid bills was $125 million, but that figure it $1.25 million. The headline has also been changed, for clarity.

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