When San Diego Gas & Electric (SDG&E) pitches its new plan to allow customers a chance to prepay their utility bills, it talks up the program’s convenience and potential cost savings. What it fails to mention is the abrogation of consumer protections that shield the public, often low-income families, from being abruptly disconnected.
The state Public Utilities Commission will mull over SDG&E’s proposal at rate hearings in the coming months, and a positive outcome for the company will probably inspire the state’s other major private utilities, Southern California Edison and Pacific Gas & Electric, to follow suit.
SDG&E, which has 1.2 million residential customers spread across 4,400 square miles in San Diego and Orange counties, wants to allow households to buy power ahead of time and replenish their account when the balance drops low. Customers would be able to measure their power usage in real time using smart meters and adjust their consumption habits accordingly. They also wouldn’t be required to post two-month deposits to receive initial service.
However, four days after balances fall to zero or the day after an account owes $20, the utility will consider that a voluntary request for disconnection and turn off the power. That contrasts with California’s 14-day advance disconnection notice and requirements that the utility make an effort via mail, phone or a personal visit to warn customers 48-hours before pulling the plug. The state’s disconnection process also has other built-in safeguards that allow people to appeal disconnections, obtain information about financial assistance, contact the Public Utilities Commission with questions and initiate complaints.
Almost all those protections are squarely aimed at those who need them most, low- and moderate-income households who more than ever are being squeezed by economic forces beyond their control.
Although 53 utilities in 19 states have prepayment electric programs, most of those are smaller electric cooperatives outside the jurisdiction of state utility commissions. The few large-scale prepayment programs, like M-Power in Arizona’s Salt River Project (SRP) and the Oklahoma Electric Cooperative, cater mostly to low- and moderate-income households. A study by the National Consumer Center found that “households with the least means are trapped under prepayment, often paying higher costs and transaction fees while experiencing more frequent, disruptive, and dangerous loss of service. Such a system creates a two-tiered system, favoring wealthier, credit-paying households.”