170 Ind. Admin. Code 5-1-15

Current through May 29, 2024

Section 170 IAC 5-1-15 - Creditworthiness of customer; deposit; refund

Authority: IC 8-1-1-3

Affected: IC 8-1-2-87; IC 12-14-11; IC 32-34-1-20

Sec. 15.

(a) Each utility shall determine the creditworthiness of residential applicants or customers in an equitable and nondiscriminatory method:

(1) without regard to the economic character of the area wherein the applicant or customer resides; and

(2) solely upon the credit risk of the individual without regard to the collective credit reputation of the area in which he or she lives.

(b) Each new applicant for residential gas service shall be deemed creditworthy and shall not be required to make a deposit as a condition of receiving service if the applicant satisfies the following criteria:

(1) If the applicant has been a customer of any utility within the last two (2) years, the applicant:

(A) owes no outstanding bills for service rendered within the past four (4) years by any such utility;

(B) during the last twelve (12) consecutive months that the service was provided, did not have more than two (2) bills that were delinquent to any utility or, if service was rendered for a period for less than twelve (12) months, did not have more than one (1) delinquent bill in the period; and

(C) within the last two (2) years, did not have a service disconnected by a utility for nonpayment of a bill for services rendered by that utility.

(2) If the applicant has not been a customer of a utility during the previous two (2) years, any two (2) of the following criteria are met:

(A) The applicant either:

(i) has been employed by his or her present employer for two (2) years;

(ii) has been employed by his or her present employer for less than two (2) years, but has been employed by only one (1) other employer during the past two (2) years; or

(iii) has been employed by the present employer for less than two (2) years and has no previous employment due to recently:

(AA) graduating from a school, university, or vocational program; or

(BB) being discharged from military service.

(B) The applicant either:

(i) owns or is buying his or her home; or

(ii) is renting a home or an apartment and has occupied the premises for more than two (2) years.

(C) The applicant has credit cards, charge accounts, or has been extended credit by a bank or commercial concern unless a credit check shows that the applicant has been in default on any such account more than twice within the last twelve (12) months.

(c) Deposits for residential customers shall be assessed as follows:

(1) Deposits for utilities serving at least thirty-five thousand (35,000) residential customers, as listed in the utility's most recent annual report on file with the commission, or their affiliates as defined in clause (G) below, shall be assessed as follows:

(A) New applicants who have not been a customer of the utility during the previous four (4) years who fail to establish creditworthiness under subsection (b)(2) may be required to make a deposit not to exceed one-sixth (1/6) of the estimated annual cost of regulated utility service to be rendered to the applicant.

(B) Subject to the requirements of clause (E), an applicant that has been a customer of the utility during the previous four (4) years may be required to make a deposit not to exceed one-third (a) of the estimated annual cost of regulated utility service to be rendered to the applicant, when the applicant:

(i) owes an outstanding bill for service rendered by the utility within the past four (4) years;

(ii) during the last twelve (12) consecutive months that the service was provided, had more than two (2) bills that were delinquent to the utility or, if service was rendered for a period of less than twelve (12) months, had more than one (1) delinquent bill in such period; or

(iii) within the last two (2) years had service disconnected by the utility for nonpayment of a bill for services rendered by that utility.

(C) Subject to the requirements of clause (E), the customer may be required to make a deposit not to exceed one-third (a) of the estimated annual cost of regulated utility service to be rendered to the customer when:

(i) the customer has been mailed disconnect notices for two (2) consecutive months;

(ii) the customer has been mailed disconnect notices for any three (3) months within the preceding twelve (12) month period; or

(iii) the service to the customer has been disconnected within the previous two (2) years under section 16 of this rule.

(D) If a customer has contracted for the budget plan, the amount of the deposit shall be no more than the equivalent of two (2) monthly budget payments.

(E) From November 1 to March 15 of any year, applicants or customers who the utility has been informed by the state or its agent are eligible and have applied for low income heating assistance under IC 12-14-11, may be required to make a deposit not to exceed one-sixth (1/6) of the estimated annual cost of regulated utility service to be rendered to the applicant or customer.

(F) An initial deposit made by an applicant shall be subject to reevaluation upon the request of either the utility or the applicant, based upon actual charges for services rendered, at any time after service has been provided.

(G) The provisions of this subdivision shall apply to any utility, regardless of size, that has an affiliate utility serving at least thirty-five thousand (35,000) residential customers, as listed in the utility's most recent annual report on file with the commission.

(2) Subject to the provisions of subdivision (1)(G), deposits for utilities serving less than thirty-five thousand (35,000) residential customers, as listed in the utility's most recent annual report on file with the commission, shall be assessed as follows:

(A) If the applicant fails to establish that he or she is creditworthy under subsection (b), the applicant may be required to make a reasonable deposit. The deposit shall not exceed one-third (a) of the estimated annual cost of service to be rendered to the applicant unless the customer has contracted for the budget plan, in which case the amount of the deposit shall be no more than the equivalent of two (2) monthly budget payments. If a deposit is greater than seventy dollars ($70), the utility shall advise the applicant or customer simultaneously with making a demand for a deposit that the applicant or customer may pay the deposit in equal installment payments over a period of no less than eight (8) weeks. Service shall be connected upon receipt by the utility of the first such payment.

(B) Unless a present customer has contracted for the budget plan, in which case the amount of the deposit shall be no more than the equivalent of two (2) monthly budget payments, a present customer may be required to make a reasonable deposit not [sic., to] exceed an amount equal to one-third (a) of the expected annual billings for the customer at the address at which service is rendered when:

(i) the customer has been mailed disconnect notices for two (2) consecutive months;

(ii) the customer has been mailed disconnect notices for any three (3) months within the preceding twelve (12) month period; or

(iii) the service to the customer has been disconnected within the past four (4) years under section 16 of this rule.

(d) If a utility requires a deposit as a condition of providing service, then the utility must:

(1) immediately notify the applicant stating the precise facts upon which the utility based its decision; and

(2) provide the applicant with an opportunity to rebut the facts and show other facts demonstrating his or her creditworthiness.

(e) In the event the required deposit from a utility serving at least thirty-five thousand (35,000) residential customers, or its affiliate, is in excess of one hundred fifty dollars ($150), the utility shall advise the customer that he or she may pay the deposit in installments, the initial installment being one hundred fifty dollars ($150), with subsequent payments of the deposit balance paid over a period of up to twelve (12) weeks, except where the deposit is required as a result of a disconnection for nonpayment, in which case full payment of the deposit may be required prior to reconnection. The utility shall record the terms of any payment arrangement by selecting one (1) of the following methods:

(1) Sending the customer a letter describing the terms of the payment arrangement, including the following:

(A) The amount of each installment.

(B) The due date or dates.

(C) The total amount due.

(D) An explanation that failure to comply with the terms of the arrangement may lead to disconnection of service.

(2) Describing the terms of the payment arrangement on the customer's bill, including the following:

(A) The amount of each installment.

(B) The due date or dates.

(C) The total amount due.

(D) An explanation that failure to comply with the terms of the arrangement may lead to disconnection of service.

(3) Making a voice recording of a telephone conversation in which the customer agrees to the payment arrangement, including the following:

(A) The amount of each installment.

(B) The due date or dates.

(C) The total amount due.

(D) An explanation that failure to comply with the terms of the arrangement may lead to disconnection of service. Recordings of telephonic payment arrangements shall be maintained for at least six (6) months after the arrangement is completed or broken by the customer.

(f) Requirements for interest upon deposits shall be as follows:

(1) For a utility serving less [sic., than] thirty-five thousand (35,000) residential customers, deposits held more than twelve (12) months shall earn interest from the date of deposit at a rate of six percent (6%) per annum or at such other rate of interest as the commission may prescribe following a public hearing.

(2) For a utility serving at least thirty-five thousand (35,000) residential customers, a deposit held more than thirty (30) days shall earn interest from the date the deposit is paid in full. Beginning on the effective date of this section, the rate of interest shall be set by the commission based upon the then existing rate for one (1) year United States Treasury Constant Maturity securities. The interest rate shall be rounded to the nearest one-half (½) of one percent (1%). In December of each year, the commission shall issue a general administrative order establishing the interest rate for the next calendar year that shall be paid on all deposits held during all or part of the subsequent year.

(3) The deposit shall not earn interest after the date it is mailed or personally delivered to the customer, or otherwise lawfully disposed.

(g) Requirements for refunds shall be as follows:

(1) Any deposit or accrued interest shall be promptly refunded directly to the customer or credited to the customer's account without the customer's request when the customer:

(A) submits satisfactory payment for a period of either:

(i) twelve (12) successive months; or

(ii) twelve (12) out of any fifteen (15) consecutive months without late payment in two (2) consecutive months; or

(B) demonstrates his or her creditworthiness as provided by subsection (b).

(2) Refunds of deposits or accrued interest issued under this section must be accompanied by a statement of accounting for each transaction affecting the deposit and interest.

(3) Following customer-requested termination of service, the utility shall:

(A) apply the deposit, plus accrued interest, to the final bill; or

(B) upon specific request from the customer, refund the deposit, plus accrued interest, within fifteen (15) days after payment of the final bill.

(4) Each utility shall maintain a record of each applicant or customer making a deposit that shows the following:

(A) The name of the customer.

(B) The current address of the customer so long as he or she maintains an active account with the utility in his or her name.

(C) The amount of the deposit.

(D) The date the deposit was made.

(E) A record of each transaction affecting the deposit.

(5) Each customer shall be provided a written receipt from the utility:

(A) at the time his or her deposit is paid in full; or

(B) when he or she makes a partial payment.

The public utility shall provide a reasonable method by which a customer who is unable to locate his or her receipt may establish that he or she is entitled to a refund of the deposit and payment of interest thereon.

(6) Any deposit made by the applicant, customer, or any other person to the utility (less any lawful deductions), or any sum the utility is ordered to refund for utility service, that has remained unclaimed for one (1) year after the utility has made diligent efforts to locate the person who made the deposit or the heirs of the person, shall be presumed abandoned and treated in accordance with IC 32-34-1 et seq.

(7) A deposit may be used by the utility to cover any unpaid balance following disconnection of service under section 16 of this rule, provided, however, that any surplus be returned to the customer as provided in subsection (f) and this subsection.

(h) The commission may require that data be reported by utilities in order to determine whether a utility is providing service consistent with this rule. The utility shall respond to any survey that is issued by the commission in a timely manner and provide copies of such survey responses to the office of the utility consumer counselor. Requested information in the survey may include, but is not limited to, the following:

(1) the amount of collected deposits;

(2) the number of customers assessed deposits;

(3) the number of customers served who are receiving low-income heating assistance; and

(4) the amount of uncollected debt.

170 IAC 5-1-15

Indiana Utility Regulatory Commission; No. 34613: Standards of Service For Gas Public Utilities Rule 15; filed Oct 14, 1976, 10:20 a.m.: Rules and Regs. 1977, p. 401; filed Oct 28, 1998, 3:22 p.m.: 22 IR 730; errata filed Nov 22, 1999, 3:31 p.m.: 23 IR 812; readopted filed Jul 11, 2001, 4:30 p.m.: 24 IR 4233; filed Feb 16, 2006, 8:14 a.m.: 29 IR 2164; readopted filed Jun 14, 2012, 3:04 p.m.: 20120711-IR-170120199RFA; readopted filed Aug 2, 2013, 2:16 p.m.: 20130828-IR-170130227RFA

Readopted filed 4/11/2019, 9:04 a.m.: 20190508-IR-170190136RFA