The Senate Consumer Protection and Professional Licensure committee on Jan. 28, 2025 with Chair Patrick Stefano, R-Fayette, and Minority Chair Lisa Boscola, D-Northampton, (Capital-Star photo by Ian Karbal)
State senators began work this week to reenact a law that barred utility companies from cutting off service to customers in the winter, regardless of their ability to pay.
The law also prevented utility companies from shutting off services on Fridays and weekends and required multiple notifications before a delinquent customer’s utilities could be disconnected.
The prior regulations lapsed in December 2024 because lawmakers were unable to agree on what to do with the 20-year-old section of law, known as Chapter 14, which needed reauthorization every 10 years to stay in effect. The Democrat-controlled House and Republican-controlled Senate couldn’t reach a deal on how to modify it.
At the heart of the disagreement is that some House Democrats, as well as consumer advocates, say despite the security Chapter 14 offered customers during the frigid months between December and March, the law made it too easy for utility companies to cancel service for low-income customers who fell behind on their monthly bills during the rest of the year.
They want to use the reauthorization of the law to enact stronger consumer protections.
“Chapter 14 was first passed with the explicit goal of trying to achieve equity by eliminating opportunities for customers who have the means to pay from avoiding payment,” said Elizabeth Marx, executive director of the Pennsylvania Utility Law Project. “What has happened in practice is hundreds of thousands of lower-income households have been terminated, not because they’re capable of paying, but because they’re incapable of paying.”
When a utility customer fails to make payments, typically, they enter into an arrangement with their utility company that allows them to pay their debts on top of their monthly bills. If that fails, they can go to the Public Utility Commission and arrange a payment plan.
But Chapter 14, first enacted in 2004, stripped some of the Public Utility Commission’s ability to work with low- and middle-income customers to make those plans.
Before the law went into effect, the Public Utility Commission could create an individualized payment plan for low-income families, based on their income, debts and ability to pay. Chapter 14 created rigid guidelines for those payment plans. (As it stood last year, guidelines ranged from six-month plans for customers making 300% of the federal poverty level to five-year plans for customers making 150% of the federal poverty level or less).
Moreover, the law allows utility companies to require security deposits when their customers fall behind, which they have to pay in addition to their monthly bills and payment plans. There are also late fees and, if their service has already been disconnected, reconnection fees. A 2014 amendment to the law made some customers — those whose income was below 150% of the federal poverty level — exempt from security deposits.
According to Marx, the rigid requirements for payment plans and the ability of utility companies to charge extra fees to customers on top of their monthly bills, is particularly difficult for some low-income households.
“Right now we’ve got folks on fixed incomes that are being quoted out of the gate several hundred dollars,” Marx said. “That’s not a workable solution.”
Chapter 14 also laid out certain consumer protections, creating rules for when a utility company could cut off service. Aside from a moratorium during winter months, service disconnections are not allowed on Fridays and weekends. And customers facing medical emergencies — such as when they need electricity to power necessary medical equipment — can get doctor notes to exempt them for 30 days, which can be renewed at the end of that period. And survivors of domestic abuse can produce a copy of any protective order they have to similarly receive a reprieve.
When Chapter 14 expired last year, the Pennsylvania Public Utility Commission effectively reinstated it, noting that they wanted to give lawmakers time to debate. This session, lawmakers in the House and Senate will need to compromise on how or whether it should change to codify those protections back into law.
“They clearly want to reauthorize this,” PUC chair Stephen DeFrank told the Capital-Star. “We’re gonna keep this table set as is until they decide what they want to do.”
Sen. Lisa Boscola (D-Northampton) was the first to introduce legislation offering a proposal this session. It was a lightly modified version of a bill she introduced last session, which largely left Chapter 14 in place as is. It was taken up in a Senate committee on Monday.
The bill would extend the length of repayment plans offered to low-income families who fall behind on their utility bills. However, it did not provide the flexibility that advocates or House Democrats wanted, and didn’t ban fees and deposits for low-income customers.
DeFrank said he supports extensions for customers who fall behind.
“The best way of getting a customer to pay a bill is a payment arrangement,” DeFrank said.
But advocates say the Senate bill doesn’t go far enough.
“There are changes in there,” said Joline Price, an attorney in the energy unit at Community Legal Services in Philadelphia. “But it’s a really lost opportunity to make consumer protections.”
Boscola’s bill was a first shot in what could become a longer battle.
“The House is gonna put up a fight, but, you know, let’s see where this goes,” Boscola said during Monday’s committee meeting.
Advocates like Marx and Price prefer a version put forward by House Democrats last year, but ultimately rejected by the Senate.
That version made numerous changes to Chapter 14. It would have barred utility companies from charging additional fees to, or requiring security deposits from, low-income customers facing utility shut-offs because they were behind on bills. It also would have banned reconnection fees for low-income households. Moreover, it would have allowed the PUC to give delinquent customers more time to make good on their past bills, allowed the PUC to limit monthly payments to 20% of their average bill and expanded the length of payment arrangements.
Sen. Patrick Stefano (R-Fayette), the Senate Consumer Protection and Professional Licensure Committee Chair, said the bill was a nonstarter. He said it would have made protections intended for low-income families too broadly available.
“Right now 5% of the customer base needs these programs and 95% pay for it,” Stefano said. “What was trying to be negotiated in the House to come back to us, I couldn’t agree to. It changed it to 55% of the rate-base paying for 45%.”
He added that he worried expanding access to assistance for low-income families could effectively incentivize people who could pay on time not to.
“I want to make sure that those who need them use the programs that are available to them, and those who can pay do pay,” Stefano said. He cited conversations he said he’s had with people who pay their phone bills, but not their internet bills, because they believe their cell service providers will cut them off, but their electric companies won’t.
His comments mirrored concerns voiced by senators last year that the House version of the bill would enable “bad actors” who knowingly refused to pay utility bills by allowing them to escape fees and deposits intended to protect utility companies.
But advocates say that increasing access to repayment plans for people who fall behind their bills could ultimately help every utility customer.
When a household stops paying their bills entirely and leaves the state or service area, that debt becomes uncollectible. Uncollectible debt is eventually passed on to all paying customers of that utility. A payment program that allows low-income families to keep their services connected and slowly repay when they’ve fallen behind, could help avoid that outcome. Especially as energy prices increase, along with the number of households having utilities disconnected.
Boscola, whose bill more closely mirrored prior law, said in a statement Monday that Chapter 14’s protections were “vital to stabilizing utility costs for hard-working families and seniors on fixed incomes … With skyrocketing energy prices and mounting unpaid utility bills, the need for action is more urgent than ever.”
In the meantime, Marx, of the Pennsylvania Utility Law Project, says that rising energy prices have led to more Pennsylvania utility customers facing shutoffs. In 2024, according to testimony she provided the legislature, 352,533 Pennsylvania households experienced involuntary gas or electric shutoffs, a 15% increase over 2023, according to the Pennsylvania Utility Law Project.
“There are substantial changes that need to be made,” Marx said. “We are happy and look forward to working with both chambers to create prevention-based reforms that will address rising utility costs and help families catch up before they fall behind.”
She suggested lawmakers think hard about what they want from the law. If their goal is to decrease the number of people who stop or become unable to pay their utility bills altogether, the best way to do that is to work with them.
Price added that she would like to see more focus in the law on catching families before they fall behind. She said that could mean requiring utility companies to collect data on household income the first time they fall behind on a payment to see if they qualify for assistance. Often, she meets clients who would have qualified for existing customer assistance programs, or could have had a security deposit waived, but weren’t aware.
“There’s things that we can do to require utilities to do more to get customers enrolled in those programs early so that they don’t end up spiraling into a pit of debt,” Price said.
She added, “We don’t have to act in the framework of an old law. We need to think about what we want going forward.”