State regulators fined Avista Corp. more than $60,000 for improper handling of customer accounts. Most of the violations were related to errors in how energy-assistance dollars were credited to low-income families.
Avista was putting the money toward customers’ old past-due bills, instead of crediting it toward current and upcoming payments.
“That money is intended to keep the heat and the lights on right now,” said Sharon Wallace, assistant director for consumer protection at the Washington Utilities and Transportation Commission. “What happened was that the company applied the money … to old balances.”
That put some customers at immediate risk of having their power shut off, she said.
In one instance, a customer owed Avista at least $1,200 in past-due bills. When the customer received $928 in credits through two energy assistance pledges, all of the money was applied to the old bills, instead of current and upcoming bills.
Commission staff uncovered 621 violations of state consumer protection rules by Avista, with 573 of the violations for misapplying energy-assistance credits to old debt.
Each day the money was incorrectly credited is one violation, Wallace said. Each violation carries a $100 fine.
Avista has 15 days to respond to the investigation. The company can pay the fine, request a hearing to contest the findings or ask the commission to reduce the fine.
Avista officials said Thursday that they were reviewing the commission’s findings.
“Avista and the (commission) share a common concern for our customers and both want to help them avoid an interruption in their service because of non-payment,” Vicki Weber, the company’s customer service director, said in a statement. “We believe that certain aspects of the rules are unclear, and we look forward to working with commission staff in order to avoid future misunderstandings.”
Wallace said the current rules have been in place for at least 10 years. As recently as 2007, commission staff sent a “technical assistance” letter to utilities, explaining how energy-assistance credits should be applied, she said.
The state regulations aren’t intended to keep Avista or other utilities from collecting on bad debts, Wallace said. But the energy-assistance dollars are specifically geared toward “ensuring that customers have energy even when something difficult is occurring in their lives,” she said.
That could be the loss of a job or a medical emergency, she said.
Commission staff initiated the investigation after a routine review of consumer complaints against energy companies in Washington.
The audit of Avista’s accounts covered part of 2009. The commission staff randomly selected for detailed review 166 accounts that had their power shut off in October of that year. The staff also reviewed 101 consumer complaints filed against Avista between June and December 2009.
The other Avista violations were related to inaccurate billing statements, improper notification of power shut-offs and errors in deposit requirements.
Avista reported 19,852 disconnects for customers who didn’t pay their bills in 2009.