Makes provisions regarding payment by utility customers to authorized payment agents

BILL NUMBER:S1258

Title of bill

An act to amend the public service law, in relation to protecting residential utility customers who make bill payments to authorized payment agents, to provide for written contracts between electric corporations and payment agents, and to provide for public service commission review of the credit-worthiness of payment agents in certain cases

Purpose or general idea of bill

This bill would protect consumers that pay their utility bills to an authorized payment agent. Under present law, if certain kinds of payment agents fail to remit utility payments promptly, consumers could be forced to pay the same bills twice or suffer disconnection, late penalties or other charges. This bill would not only prevent these results, but also avoid utility rate increases due to credit losses occurring when payment agents fail to remit payments to the utility.

Summary of specific provisions

This bill would provide that payment of utility charges to an authorized payment agent would be the same as payment to the utility. Timely payment to an authorized payment agent would prevent penalties or extra charges, even if the payment agent fails to remit the funds to the utility or remits the funds after the designated payment date.

In addition, this bill would prohibit any person from acting as a payment agent for an electric utility without a written agreement. Each agreement would have to make the utility, and not the consumer, responsible for the acts of the agent. In addition, the bill would provide for Public Service Commission review of certain agreements that could result in significant financial losses to a utility and rate increases for consumers.

Effects of present law which this bill would alter

Amends Section 45 of the Public Service Law by amending and numbering the current section as subdivision 1, and adding new subdivisions 2, 3 and 4.

Justification

Whenever a third party collects money from consumers and holds it for one or more creditors of the consumers, there are risks related to the credit-worthiness of the third party. Utility companies often permit payment of utility bills to a third-party payment agent. Moreover, if and when electric utility competition becomes a reality in New York, the use of agents to collect bills will probably become more common. Without appropriate protection, consumers might suffer, if a payment agent remits their payments late or not at all. Consumers could be forced to pay the same bill twice, or they could be subject to late payment penalties, termination of service, and reconnection charges.

There is some protection for consumers under current Section 45 of the Public Service Law, but it is less than what is afforded to commercial, industrial and other utility customers under Section 118. This bill would prevent the possibility of double payments, disconnection, late penalties and other charges for consumers that make timely payment of their electric bills to an authorized payment agent.

The bill also would establish that it is the policy of the State of New York that the utilities, rather than consumers, should bear the credit risks of payment agents. Finally, the bill provides for Public Service Commission review of certain contracts with payment agents to prevent large credit losses that utilities might later attempt to pass on to ratepayers in the form of higher rates.

Prior legislative history

(2000) - A.4590 (2001) - A.6357 (2004) - A.6916 (2006) - A.4575 (2007) - A.7246 (2009) - A.6707 (2014) - S.5085

Fiscal implications

None.

Effective date

On the ninetieth day after enactment.