Subchapter C. CREDIT AND DEPOSITS STANDARDS POLICY

§ 56.31. Policy statement.

 An essential ingredient of the credit and deposit policies of each utility shall be the equitable and nondiscriminatory application of those precepts to potential and actual ratepayers throughout the service area without regard to the economic character of the area or any part thereof. Deposit policies shall be based upon the credit risk of the individual applicant or ratepayer rather than the credit history of the affected premises or the collective credit reputation or experience in the area in which he lives and without regard to race, sex, age over 18, national origin or marital status.

 A utility shall provide residential service without requiring a deposit when the applicant satisfies one of the following requirements:

   (1)  Prior utility payment history. The applicant has been a recipient of utility service of a similar type within a period of 24 consecutive months preceding the date of the application and was primarily responsible for payment for such service, so long as:

     (i)   The average periodic bill for the service was equal to at least 50% of that estimated for new service.

     (ii)   The service of the applicant was not terminated for nonpayment during the last 12 consecutive months of that prior service.

     (iii)   The applicant does not have an unpaid balance from that prior service.

   (2)  Ownership of real property. The applicant owns or has entered into an agreement to purchase real property located in the area served by the utility or is renting his place of residence under a lease of one year or longer in duration, unless the applicant has an otherwise unsatisfactory credit history as an utility customer within 2 years prior to the application for service.

   (3)  Credit information. The applicant provides information demonstrating that he is not an unsatisfactory credit risk.

     (i)   The absence of prior credit history does not, of itself, indicate an unsatisfactory risk.

     (ii)   The utility may request and consider information including but not limited to: the name of the employer of the applicant, place and length of employment, residences during the previous 5 years, letters of reference, credit cards and any significant source of income other than from employment.

   The provisions of this §  56.32 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.32 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial pages (37336) to (37337).

   Security Deposit

   A utility may not require a security deposit from a consumer based solely upon its determination that she has no prior credit history. No sanction will be imposed against the utility when the consumer is not entirely without fault in the utility’s determination that a security deposit is necessary. West Penn Power Co. v. Pennsylvania Public Utility Commission, 521 A.2d 75 (Pa. Cmwlth. 1987).

 If an applicant does not establish his credit under §  56.32 (relating to credit standards), the utility shall provide residential service when one of the following requirements is satisfied:

   (1)  Cash deposit. The applicant posts a cash deposit.

   (2)  Third-party guarantor. The applicant furnishes a written guarantee from a responsible ratepayer which, for the purposes of this section, shall mean a ratepayer who has or can establish credit, under §  56.32, to secure payment in an amount equal to that required for cash deposits.

     (i)   A guarantee shall be in writing and shall state the terms of the guarantee.

     (ii)   The guarantor shall be discharged when the applicant has met the terms and conditions which apply under § §  56.52—56.57.

   The provisions of this §  56.33 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504—506, 1301 and 1501.

   The provisions of this §  56.33 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended July 17, 1998, effective August 17, 1998, 28 Pa.B. 3379. Immediately preceding text appears at serial pages (241285) to (241286).

 Deposits for applicants for temporary service may be required in accordance with §  53.82(1) (relating to deposits).

 A utility may require, as a condition of the furnishing of residential service to an applicant, the payment of any outstanding residential account with the utility which accrued within the past 4 years for which the applicant is legally responsible and for which the applicant was billed properly. However, any such outstanding residential account with the utility may be amortized over a reasonable period of time. Factors to be taken into account include but are not limited to the size of the unpaid balance, the ability of the applicant to pay, the payment history of the applicant, and the length of time over which the bill accumulated. A utility may not require, as a condition of the furnishing of residential service, payment for residential service previously furnished under an account in the name of a person other than the applicant unless a court, district justice or administrative agency has determined that the applicant is legally obligated to pay for the service previously furnished. Examples of situations include a separated spouse or a cotenant. This section does not affect the creditor rights and remedies of a utility otherwise permitted by law.

   The provisions of this §  56.35 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504 and 1501—1504.

   The provisions of this §  56.35 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended September 10, 1982, effective September 11, 1982, 12 Pa.B. 3093; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial pages (37337) and (73189).

 A utility shall establish written procedures for determining the credit status of an applicant. A utility employe processing applications or determining the credit status of applicants shall be supplied with or have ready access to a copy of the written procedures of the utility. A copy of these procedures shall be maintained on file in each of the business offices of the utility and made available, upon request, for inspection by members of the public and the Commission.

   (1)  Reasons for denial of credit. If credit is denied, the utility shall inform the ratepayer or applicant in writing of the reasons for the denial.

   (2)  Informing applicants of procedures. Utility personnel shall fully explain the credit and deposit procedures of the utility to each ratepayer or applicant for service.

 If the investigation and determination of credit status is expected to take or in fact takes longer than 3 business days commencing the date after the application is made, the utility shall provide service pending completion of the investigation.

 An applicant may elect to pay any required deposits in three installments: 50% payable upon the determination by the utility that the deposit is required, 25% payable 30 days after the determination, and 25% payable 60 days after the determination.

   The provisions of this §  56.38 issued under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.38 adopted April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250.

PROCEDURES FOR EXISTING RATEPAYERS

§ 56.41. General rule.

 A utility may require an existing ratepayer to post a deposit to reestablish credit under the following circumstances:

   (1)  Delinquent accounts. Whenever a ratepayer has been delinquent in the payment of any two consecutive bills or three or more bills within the preceding 12 months.

     (i)   Prior to requesting a deposit under this section, the utility shall give the ratepayer written notification of its intent to request a cash deposit if current and future bills continue to be paid after the due date.

       (A)   Notification shall clearly indicate that a deposit is not required at this time but that if bills continue to be paid after the due date a deposit will be required.

       (B)   Notification may be mailed or delivered to the ratepayer together with a bill for utility service.

       (C)   Notification shall set forth the address and phone number of the utility office where complaints or questions may be registered.

       (D)   A subsequent request for deposit shall clearly indicate that a ratepayer should register any question or complaint about that matter prior to the date the deposit is due in order to avoid having service terminated pending resolution of a dispute. The request shall also include the address and telephone number of the utility office where questions or complaints may be registered.

     (ii)   Except in the case of adjustments to equal monthly billing plans, a utility may issue a notification or subsequent request for a deposit based, in whole or in part, on a delinquent account arising out of a make-up bill as defined in §  56.14 (relating to previously unbilled utility services), under the following conditions:

       (A)   The utility has complied with the requirements of §  56.14. Compliance with a payment agreement or settlement agreement by the ratepayer discharges the delinquency, and a notification or request for deposit shall not thereafter be issued based on the make-up bill.

       (B)   If a make-up bill exceeds the otherwise normal estimated bill by at least 50% and if the ratepayer makes payment in full after the bill is delinquent but before a notification of intent to request a deposit is given to the ratepayer, such a notification or request for deposit shall not thereafter be issued based on the make-up bill.

   (2)  Condition to the reconnection of service. A utility may require a deposit as a condition to reconnection of service following a termination.

   (3)  Failure to comply with settlement or payment agreement. A utility may require a deposit, whether or not service has been terminated, when a ratepayer fails to comply with a material term or condition of a settlement or payment agreement.

   The provisions of this §  56.41 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.41 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial pages (73190) to (73191) and (37340).

   The due date for payment of a deposit other than a deposit required as a condition for the reconnection of service under §  56.41(b) (relating to general rule) may not be less than 21 days from the date of mailing or service on the ratepayer of notification of the amount due. A ratepayer may elect to pay a required deposit in three installments: 50% payable upon the determination by the utility that the deposit is required, 25% payable 30 days after the determination and 25% payable 60 days after the determination.

   The provisions of this §  56.42 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1304, 1501 and 1504.

 Whenever a ratepayer is required to make a deposit, the requirement may be satisfied either by posting a cash deposit or becoming a member in good standing of a composite group.

   The provisions of this §  56.43 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655.

CASH DEPOSITS

§ 56.51. Amount of cash deposit.

 (a)  Applicants. A utility may not require a cash deposit from an applicant in excess of the average estimated bill of the applicant for a period equal to one billing period plus 1 additional month’s service, not to exceed 4 months in the case of water and sewage utilities and 2 months in the case of gas, electric and steam heat utilities, with a minimum deposit of $5.

 (b)  Existing ratepayers. For an existing ratepayer, the cash deposit may not exceed the estimated charges for service based on the prior consumption of that ratepayer for the class of service involved for a period equal to one average billing period plus 1 average month, not to exceed 4 months in the case of water and sewage utilities and 2 months in the case of gas, electric and steam heat utilities, with a minimum of $5.

 (c)  Adjustment of deposits. The amount of a cash deposit may be adjusted at the request of the ratepayer or the utility whenever the character or degree of the usage of the ratepayer has materially changed or when it is clearly established that the character or degree of service will materially change in the immediate future.

   The provisions of this §  56.52 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; reserved April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial page (37341).

 A cash deposit shall be refunded under the following conditions:

   (1)  Termination or discontinuance of service. Upon termination or discontinuance of service, the utility shall promptly apply the deposit of the ratepayer, including accrued interest, to any outstanding balance for utility service and refund or apply to the ratepayer’s account, the remainder to the ratepayer. A transfer of service from one location to another within a service area may not be deemed discontinuance within the meaning of this chapter.

   (2)  Credit established. When a ratepayer establishes credit under §  56.32 (relating to credit standards), the utility shall refund or apply to the ratepayer’s account, any cash deposit plus accrued interest.

   (3)  Third-party guarantor. When a ratepayer substitutes a third-party guarantor in accordance with §  56.33(3) (relating to composite group; cash deposits; third-party guarantor), the utility shall refund any cash deposit, plus accrued interest, up to the limits of the guarantee.

   (4)  Prompt payment of bills. After a ratepayer has paid bills for service for 12-consecutive months without having service terminated and without having paid his bill subsequent to the due date or other permissible period as stated in this chapter on more than two occasions, the utility shall refund any cash deposit, plus accrued interest, so long as the customer currently is not delinquent.

   (5)  Optional refund. At the option of the utility, a cash deposit, including accrued interest, may be refunded in whole or in part, at any time earlier than the time stated in this section.

   The provisions of this §  56.53 amended under the Public Utility Code, 66 Pa.C.S. § §  501, 504—506, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.53 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250; amended July 17, 1998, effective August 17, 1998, 28 Pa.B. 3379. Immediately preceding text appears at serial pages (205740) to (205741).

 The ratepayer may elect to have a deposit applied to reduce bills for utility service or to receive a cash refund.

   The provisions of this §  56.54 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.54 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial pages (37342) to (37343).

 If a ratepayer is not entitled to refund under §  56.53 (relating to refund of deposit), the utility shall review the account of the ratepayer each succeeding billing period and shall make appropriate disposition of the deposit in accordance with §  56.53 and §  56.54 (relating to application of deposit to bills).

   The provisions of this §  56.55 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.55 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial pages (37343).

 If a cash deposit is applied or refunded, the utility shall mail or deliver to the ratepayer a written statement showing the amount of the original deposit plus accrued interest, the application of the deposit to a bill which had previously accrued, the amount of unpaid bills liquidated by the deposit and the remaining balance.

   The provisions of this §  56.56 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501 and 1504.

   The provisions of this §  56.56 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250. Immediately preceding text appears at serial page (37343).

 Interest at the rate of the average of 1-year Treasury Bills for September, October and November of the previous year is payable on deposits without deductions for taxes thereon unless otherwise required by law.

   The provisions of this §  56.57 amended under the Public Utility Code, 66 Pa.C.S. § §  331, 501, 504, 1301, 1305, 1501, 1504 and 2911.

   The provisions of this §  56.57 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; amended April 8, 1983, effective April 9, 1983, 13 Pa.B. 1250; amended January 13, 1995, effective April 14, 1995, 25 Pa.B. 145. Immediately preceding text appears at serial page (144901).

 Interest shall be paid annually to the ratepayer, or, at the option of either the utility or the ratepayer, shall be applied to service bills.

   The provisions of these § §  56.61—56.65 adopted June 16, 1978, effective June 17, 1978, 8 Pa.B. 1655; reserved July 17, 1998, effective August 17, 1998, 28 Pa.B. 3379. Immediately preceding text appears at serial pages (205743) to (205744) and (241289).