Report calls utility law unneeded, urges repeal

PENNSYLVANIA - The state's tough new utility law, which allows companies to more easily shut off service to customers, was both unnecessary and harmful, according to a report from a former state Public Utility Commission member.

Joseph Rhodes Jr. has called for speedy repeal of the law, known as Chapter 14. In his report to state Rep. Dwight Evans, D-Philadelphia, who had asked Rhodes to investigate, Rhodes criticized the law on both historic and practical grounds.

The state Legislature usurped the traditional role of the PUC in regulating utility connections and caused thousands more low-income households to be without heat going into the winter, he also reported.

The utility industry had argued that changes in existing law were needed because too many people were gaming the system to avoid paying utility bills. Evans initially supported the changes, but he later asked Rhodes to investigate after concerns were raised that the law was too harsh.

"[Chapter 14] was a hasty mistake," said Rhodes, who served on the PUC from 1988 to 1995. "It was a solution looking for a problem that did not exist. There was no collections problem."

He recommended that the law be repealed and that the state "go back to letting the PUC regulate terminations and reconnections."

To do that, reform or repeal supporters would have to get a bill through the Legislature. Attempts to do so failed last year, mainly because state Sen. Robert Tomlinson, R-Bucks, insisted on holding hearings first. A spokeswoman for Tomlinson said nothing has been scheduled so far.

Some state legislators, including Sen. Jake Corman, R-Centre, oppose reforming the law.

Michael Love, director of the Energy Association of Pennsylvania, which is criticized in the report, attacked Rhodes for bias.

"He never looked at this objectively," Love said. "His bias going in was that he was against this law and wanted it repealed."

Rhodes said Love is entitled to his opinion. "From the beginning, I had concerns," he said. "This was such a radical change."

As part of his investigation, Rhodes asked the Energy Association to provide him with data showing that Chapter 14 was both necessary and effective.

The association argued that the tough provisions in the law greatly helped with collecting delinquent utility bills. About 86,000 of the utility customers who had their electricity shut off in 2005 found the money to pay their bills and get reconnected, it has said.

Rhodes said a study done last year by the National Energy Assistance Directors Association found that 73 percent of heating- assistance recipients reported that they reduced spending on household necessities, such as food and medicine, to pay their heating bills.

"To jump to the conclusion that these thousands of households were deadbeats is the height of insensitivity on the part of the [Energy Association]," Rhodes said. "These results establish that [Chapter 14] was a 'big stick,' not that it was used on deadbeats alone."

He said the 86,000 households mentioned by the Energy Association may well have "merely shifted their misery from one category to another."

Rhodes said Chapter 14 gives utilities "almost total command" over service terminations and reconnections, removing the PUC from the picture in many instances.

"We have a Public Utility Code because, when we are talking about the provision of essential services on a monopoly basis, we cannot simply trust that the utility will do the right thing," he said.