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Utility Customers Are Entitled to Reasonable Payment Agreements to Pay High Utility Bills
by: Iowa Legal Aid
June 2001
People who have not been able to pay their high utility bills from last winter are not automatically in danger of having their utilities disconnected. Rules of the Iowa Utilities Board require utilities to offer customers an opportunity to enter into a reasonable payment agreement to avoid having utilities disconnected if the customer is not behind on a previous payment agreement. Utilities cannot require unpaid bills to be paid before next winter's heating season starts if the customer is not in default on a previous payment agreement.
For the first payment agreement, customers are entitled to longer payment periods if more time is needed to pay their bills. In negotiating a payment agreement, the utility must consider the customer's household income, ability to pay, payment history including prior defaults on similar agreements, the size of the bill, the amount of time and the reasons why the bill has been outstanding, and any special circumstances creating extreme hardships within the household. The agreement may require the customer to pay specific amounts at scheduled times, and must allow spreading the payments evenly over at least twelve months. New monthly bills must be paid as they become due.
If a customer and utility make a payment agreement over the telephone, the utility has three days to send the customer a written document stating the terms of the agreement. The written terms are binding unless the customer notifies the utility within ten days that they do not accept the agreement. If the customer makes the first payment required by the agreement, the customer is also treated as accepting the agreement.
A customer may also offer the utility a reasonable payment agreement by sending a proposed payment agreement to the utility. If the utility does not agree with the payment agreement offered by a customer, it must provide a written refusal to the customer within 30 days of the mailing of the initial disconnection notice.
If the utility company refuses the agreement proposed by the customer, customers may avoid a disconnection of service by making the payments they proposed and asking the Iowa Utilities Board for help in working out a payment agreement with the utility. The request for help must be made within ten days after receiving the utility company's written refusal of the proposed agreement. Disconnection is delayed for 30 days for the making of a reasonable payment agreement, and the 30 days can be extended to 60 days if requested by the Utilities Board.
In addition to the right to a reasonable payment agreement, people who have been certified as eligible for Iowa's low-income home energy assistance program cannot have their utilities disconnected during the winter moratorium, which usually lasts from November 1 through April 1. A customer who has retained services during the moratorium, but is in default of a payment agreement may be offered a second payment agreement by the utility. The Iowa Utilities Board currently is considering whether to make a second payment agreement mandatory and extend the time for payment. Currently, the rules regarding second payment agreements state the final payment will be due before the next heating season.
If a customer offers a reasonable payment plan that is rejected by the utility, or if disconnection is otherwise inappropriate, the customer can file a written complaint, including a copy of the utility's refusal, with the Iowa Utilities Board. Contact the Iowa Utilities Board at 877-565-4450, by mail at Customer Services Section, Iowa Utilities Board, 350 Maple Street, Des Moines, Iowa 50319-0069, or on the Internet at IUBCustomer@max.state.ia.us. The initial complaint filed with the Iowa Utilities Board is considered to be an informal complaint and the Board's Customer Services Section attempts to resolve the complaint. If the customer is not satisfied with the proposed resolution of the complaint, the customer must file a written request for formal complaint proceedings within 14 days after the Customer Services Section issues its proposed resolution, or the specified date of utility action, whichever is later. The Utilities Board will then consider whether to initiate formal complaint proceedings or allow the customer to file a petition for judicial review in Iowa District Court.
Low-income Iowans may contact their local office of Iowa Legal Aid to obtain free legal assistance to negotiate a reasonable payment agreement. The location of your nearest Legal Aid office can be obtained by calling 1-800-532-1275. Iowans who are 60 or older who need help negotiating a reasonable payment agreement may contact Iowa Legal Aid's Legal Hotline for Older Iowans at 1-800-992-8161.
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