Admitting he was disturbed by the “tone” used in the utility’s shutoff notices to customers with outstanding bills, Central Maine Power Co. President Doug Herling said Thursday that he has set up an internal team to review all correspondences related to disconnection.
Nicole Hunt of Westbrook wrote to the PUC to complain about this notice she received in November. Courtesy of Nicole Hunt
“It just bothered me, the tone of the letter,” Herling said in an interview with the Press Herald. “There’s a better way to word that.”
But Herling stopped short of apologizing to customers who feel threatened with having their power shut off during cold weather, in violation of state law. And he declined to speculate on whether the wording used in the notices is legal, saying he’d let that process play out with state regulators.
But Herling said reviewing the disconnection notices is part of a larger mission to “drive change” through the beleaguered company and treat customers with respect.
“My No. 1 job is to win back the trust of customers,” he said.
Herling said he couldn’t recall when he had first read one of his company’s shutoff warnings, but that it was tied to the recent media attention.
He said it was the “first time I had focused on this particular piece of information.”
Maine Public Utilities Commission Chairman Phil Bartlett said Tuesday in a meeting that the commission had warned CMP last winter that the wording of its shutoff notices was problematic, and that the company had agreed to change them.
Herling’s comments came two days after the commission voted to open an investigation into whether CMP has violated rules surrounding disconnection notices in the 1,000 warnings the utility has issued to customers this winter despite the PUC’s previous warning.
CMP had largely defended its practices until Wednesday.
That’s when Herling revised the company’s posture during an interview on News Center Maine (WCSH, WLBZ) in which he said he was “horrified” by the language and tone of the notices, and pledged to make changes.
The commissioners said CMP has until Tuesday to explain its practices and show cause why it shouldn’t be subject to financial penalties of up to $500,000.
At issue is whether the utility ignored the commission’s previous warning to make it clear to customers with past-due bills that the company needs PUC approval before it can shut off their power during the winter. CMP said it has hand-delivered roughly 1,000 disconnection notices to customers since November.
According to Bartlett, the PUC chairman, the commission warned CMP last winter about the apparent language violation in the notices, and CMP agreed to comply.
“Despite this assurance, it appears the company may still be using notices that contain this statement,” Bartlett said during deliberations before the PUC vote.
On Thursday, CMP’s spokeswoman, Catharine Hartnett, said the company did comply, and that it’s always changing the way it presents information.
The PUC’s action follows complaints about CMP’s practices during what’s known as the “winter disconnect” period in Maine. That’s when natural gas and electric utilities are prohibited from cutting home service, even if a customer is unable or unwilling to pay what is owed by the bill’s due date. The period runs from Nov. 15 to April 15.
Herling’s pledge to review the wording didn’t satisfy Lauren Loomis, a spokesperson for CMP Ratepayers Unite, the Facebook customer group formed last year to fight high bills. She said the notices being delivered this year appear different from those sent last winter, but that they still contain wording that threatens customers with having their power shut off in the winter.
Loomis provided a copy of a disconnection notice from March 2018. The format and wording is different, but one sentence cautions: “If you fail to contact us, we can disconnect your electric service during the winter months without the approval of the Maine Public Utilities Commission.”
Wording like that has created confusion about what utilities are allowed to do during that winter period, as well as the responsibilities of customers.
Last week, Maine Public Advocate Barry Hobbins criticized CMP for recent shutoff notices it sent to customers with past-due bills. He called the action a “scare tactic,” because the utility can’t shut off power during the winter without permission.
CMP President Doug Herling
On Thursday, he called Herling’s comments “long overdue, but very important.”
Although the format and wording may have changed, notices sent to some customers this winter clearly convey the threat of being disconnected in cold weather.
On one, the headline reads in red letters: “Urgent – Disconnection notification.”
Below is another red warning: “Prevent disconnection – contact us today.”
The notice goes on to say: “Please pay the overdue amount of ($)241.66 to prevent disconnection.”
After providing a contact number to call to make payment arrangements, the notice clearly implies that the customer will have their power shut off: “Unless you take action, your electric service is scheduled for disconnection on 12/09/19 or within 20 days of that date.”
December is obviously in the winter period. But nowhere does the notice mention that disconnection is subject to PUC approval.
The issue of winter disconnection notices has gotten attention just as the PUC is preparing to rule Jan. 30 on a landmark case involving CMP’s billing and metering system.
Earlier this month, the PUC’s staff offered its opinion that CMP mismanaged the system’s rollout, but that there were no systemic problems with the system that would have been responsible for thousands of complaints over high energy use and related bills. The PUC staff report also recommended an earnings reduction for CMP – and an even larger rate increase for customers – that translated to a net increase of 8 percent to fund customer service and grid reliability improvements.
CMP has changed its response to the shutoff notice controversy twice over the past week.
On Jan. 18, the company defended its practices by saying it had been sending out similar disconnection notices for years.
“This communication process toward potential disconnection for failure to pay bills is a process CMP has used for years,” Hartnett told the Press Herald. “There is nothing new in how we work with customers to encourage them to pay their bills.”
Hartnett said that when an account is overdue, the utility takes a half-dozen progressive steps to reach customers to encourage payment and discuss assistance plans: It notes the overage on monthly bills, sends overdue notices, makes two phone calls and a property visit, and, if all else fails, sends a disconnect notice.
CMP hasn’t shut off a delinquent residential account over the past two winters, Hartnett said, a fact confirmed by the PUC.
On Tuesday, following the PUC’s vote to look into the matter, CMP issued a statement saying it would fully cooperate with the probe.
“Based on recently expressed public comment and media coverage, the company feels there is clearly an opportunity to improve public understanding of the law as well as the goal of the company to have customers communicate with us if they are challenged in paying bills,” the company said, while making no mention of problems with the tone of its notices.
To further complicate the issue, there are two types of disconnect notices.
One warns delinquent customers that their electric service is scheduled for disconnection “unless you take action.”
Another notice says, “If you fail to contact us, we can disconnect your electric service during the winter months without the approval of the Maine Public Utilities Commission.”
The first is being mailed to delinquent residential customers, and makes no mention of the commission approval requirement.
The latter is being delivered to properties that CMP suspects are vacant. CMP doesn’t need the commission’s OK for a winter shutoff at a vacant building, according to the PUC.
In response to Press Herald inquires, CMP also disclosed that it had written off $3.4 million in unpaid bills in 2018, and nearly $7.7 million in 2019. Bad debt and collection costs ultimately end up being calculated into rates and are paid for by all customers.
In terms of actual disconnections, CMP shut off power to 47,230 residential customers in 2016, and 41,554 customers in 2017. The number fell to 23,099 customers in 2019. There were only 263 disconnections in 2018, because the company was focused on fixing its new billing system.
CMP said it has not disconnected power to any residential customer during the winter for at least two years.
Herling said Thursday he had an underlying message for people with delinquent accounts.
“It is important that everyone pay their bill,” he said. “They need to reach out to us.”
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