N.J. Admin. Code § 14:3-7.8

Current through Register Vol. 56, No. 21, November 4, 2024

Section 14:3-7.8 - Diversion of service

(a) The following words and terms, when used in this section, shall have the following meanings unless the context clearly indicates otherwise:

"Beneficiary" is the person, corporation or other entity financially benefiting from the service.

"Diversion" is an unauthorized connection to pipes and/or wiring by which utility service registers on the tenant customer's meter although such service is being used by other than the tenant-customer of record without his or her knowledge or cooperation. The unauthorized connection must not be apparent from the premises.

"Landlord" means those persons, corporations or other entities who currently lease residential dwellings, as well as condominium associations or other owners' associations in instances where occupants own their premises in a multi-family building.

"Premises" are those areas of the residence where service outlets are visible and under the direct control of the tenant-customer of record.

"Tenant-customer" is a residential customer of record at the time of the complaint who rents a dwelling unit in a multi-family building or owns a condominium.

(b) Each electric, gas, water and/or wastewater utility shall include in its tariff provisions ensuring that tenant-customers shall not be required to pay for service supplied outside their premises without the tenant-customers' consent.

(c) Each electric, gas, water and/or wastewater utility shall notify tenant-customers who apply for service that if the utility's tariff provides for billing through one meter for the tenant-customers' own usage and for service diverted outside the tenant-customers' premises, the tenant-customers may not be required to pay for such diverted service absent their consent or cooperation for such service.

(d) Each utility shall investigate alleged diversions as follows:

1. When a tenant-customer alleges in good faith that the level of consumption reflected in his or her utility bill is unexplainably high, the tenant-customer may request the utility supplying gas, electricity, water and/or wastewater service to conduct a diversion investigation at no cost to the customer;

2. Such request shall be made in writing by the tenant-customer by completing and returning to the utility a diversion investigation application provided by the utility;

3. The application shall state that, if the tenant-customer has made one or more previous diversion complaints in the previous 12-month period, which failed to uncover a diversion of utility service, the utility may bill the customer for the cost of the second and subsequent investigations;

4. The utility shall investigate the alleged diversion within two months of the receipt of the investigation request. Each diversion investigation shall include a meter test conducted in accordance with 14:3-4.4;

5. The utility shall have the right of reasonable access pursuant to 14:3-3.6. For purposes of utility access, the alleged diversion is presumed to constitute a hazardous condition until the utility investigates;

6. If, as a result of such investigation, the utility determines that the service from the pipes and/or wires serving the tenant-customer has been diverted, the utility shall notify the landlord or his or her agent and instruct him or her to correct the diversion within 30 days through rewiring or repiping. However, this provision shall in no way prohibit a utility from disconnecting service if the utility determines that an unsafe condition exists;

7. If a diversion is found, the utility shall attempt to determine the identity of the beneficiary;

8. A tenant-customer seeking relief shall be responsible for furnishing to the utility the identity and address of the landlord or agent, and of the beneficiary, if known;

9. Additionally, the tenant-customer shall provide any other information, which may assist the utility in its investigation;

10. The utility shall furnish to the tenant-customer, the tenant-customer's landlord, and to the beneficiary (if different from the landlord) within 14 days of the investigation, a written report on the findings of the investigation. This report shall include information on the estimated cost of diverted service based upon prior use, degree day analysis, load study and/or cooling degree hours, whichever is appropriate;

11. If the utility locates a diversion, the utility shall attempt to reach an agreement with the parties involved or, in lieu of such agreement, proceed to the conference described in (f) below; and

12. If no diversion is located, these diversion proceedings shall end when the utility has completed and filed its investigation report pursuant to (j) below.

(e) Utility service shall be continued as follows:

1. As of the date of the tenant-customer's allegation, the utility shall continue the tenant-customer's service provided the tenant-customer pays (or makes an agreement to pay) amounts not in dispute; and

2. A utility may not terminate service to a customer involved in a diversion dispute until one of the following has occurred, whichever is latest:

i. Four weeks have elapsed after the conference described in (f) below and no Board intervention has been sought; or

ii. The Board has rendered a decision on a formal petition, or Board staff has rendered a decision on an informal complaint if either is filed as described in (h) below.

(f) If an agreement has not been reached within two weeks of the completion of the utility's investigation, the utility shall invite the landlord, tenant-customer, beneficiary and any other parties, which it has reason to believe may be involved with the diversion to a conference with a utility representative. Reasonable efforts shall be made to hold the conference within 30 days of the investigation at a mutually convenient time and place.

1. Prior to the conference, the utility shall attempt to have the landlord correct the diversion through rewiring and/or repiping. If the landlord or his or her agent fails to appear or to eliminate the diversion, or if the beneficiary fails to appear, the utility shall adjust the beneficiary's billing and future bills by the process described in (g) below. The utility may also refuse to establish utility service for any new tenant of the landlord if the diversion remains uncorrected and the tenant-customer moves from the premises.

2. At the conference, the parties shall negotiate the adjusted billing and payments pursuant to (g) below.

3. At the conference, the utility shall have the burden of presenting the results from the investigation and seeking remuneration from the beneficiary.

4. If the diversion has not already been corrected, an attempt shall be made at the conference to have the landlord or his or her agent to file an agreement with the tenant-customer and the utility that necessary correction to the facilities shall be made within a specified time.

5. At the conference the utility shall provide all parties with a copy of these regulations.

6. The utility shall provide to all parties within two weeks of the date of the conference a detailed summary of the conference which shall include determinations, conclusions, a copy of the investigation report and the names of the participants.

(g) After the conference, billing where diversion has occurred shall be adjusted as follows:

1. The tenant-customer whose service has been diverted by another party shall be billed by the utility only for service used, based upon the estimation contained in the investigation report described in (d)3 above;

2. Where the utility can locate a diversion but not the beneficiary, the tenant-customer shall not be liable for the diverted service. Where the beneficiary can be identified, liability shall be imposed as follows:

i. If the beneficiary is currently a customer of the utility on another account, the utility shall bill that beneficiary for the amount the utility estimates is attributable to the diversion plus all related expenses incurred by the utility in accordance with the utility's tariff; or

ii. If the beneficiary is not a customer of the utility, the utility may bill that beneficiary for the excess usage, which is not attributable to the tenant-customer plus all related expenses incurred by the utility;

3. In cases where the diversion of gas or electricity is a result of a construction error in the pipes and/or wires, which was not the responsibility of the beneficiary or landlord, the account of the tenant-customer involved shall be adjusted to charge only for service used based upon a prior use, degree day analysis, load study and/or cooling hours, whichever is appropriate;

4. In instances where the tenant-customer benefited from or cooperated in the diversion, the utility may collect from the tenant-customer of record for the diverted service plus that portion of the related expenses incurred by the utility in accordance with the utility's tariff;

5. The utility may permit the beneficiary to amortize the amount due for the diverted service. In cases of diversion due to construction error, the utility may allow the customer to amortize the amount due for the diverted service in equal installments over a period of time equal to the period of the diversion, for up to a maximum of four years; and

6. Billings shall be corrected retroactively to the most recent of the following dates:

i. The date of the beginning of the diversion;

ii. The date of the beginning of the tenancy; or

iii. The date four years prior to the date of the tenant-customer's diversion complaint.

(h) If an agreement cannot be reached at the conference, the landlord, tenant-customer and beneficiary shall be advised by the utility that, within three weeks of the date on which the conference summary is available, they may request Board intervention.

(i) Each electric, gas, water and/or wastewater utility shall send the following notice to all of its tenant-customers with the tenant-customer's initial bill and annually thereafter: "Pursuant to Board of Public Utilities rules, no tenant-customer may be billed or disconnected for failure to pay for electric, gas, water and/or wastewater service which was diverted outside of his/her premises without the tenant-customer's permission. Upon suspecting that his/her utility bill is unexplainably high because of a diversion of service, the tenant-customer should notify the utility immediately by calling the following number:________."

(j) Each electric, gas, water and/or wastewater utility shall annually report to the Board on the utilization of the diversion of service complaint proceedings provided for in (a) through (k) above. This report shall be provided on a Board-approved report format.

N.J. Admin. Code § 14:3-7.8

R.1983 d.526, effective 11/21/1983.
See: 15 N.J.R. 787(a), 15 N.J.R. 1949(a).
Amended by R.1997 d.39, effective 2/3/1997.
See: 28 N.J.R. 1810(a), 29 N.J.R. 449(a).
Amended by R.2002 d.280, effective 9/16/2002.
See: 34 N.J.R. 992(a), 34 N.J.R. 3216(b).
Inserted "water and/or wastewater" throughout.
Recodified from N.J.A.C. 14:3-7.16 and amended by R.2008 d.119, effective 5/19/2008.
See: 39 N.J.R. 4077(b), 40 N.J.R. 2481(a).
In the introductory paragraph of (a), substituted a colon for a period at the end; in definition "Landlord", deleted "both" preceding "those persons,"; deleted definition "Utility"; in (b), substituted "include in its tariff provisions ensuring" for "file tariff amendments to provide"; in the introductory paragraph of (d), substituted "Each utility shall investigate" for "Investigation of" and deleted "shall be conducted following "diversions"; in (d)1, substituted a semicolon for a comma at the end of the first sentence and recodified the second and third sentences as new (d)2 and (d)3 and the fourth and fifth sentences as (d)4; in (d)2, substituted a semicolon for a period at the end; rewrote (d)3; in (d)4, substituted "shall" for "must" twice and updated the N.J.A.C. reference; recodified former (d)1i and (d)1ii as (d)5 and (d)6; in (d)5, updated the N.J.A.C. reference and substituted a semicolon for a period at the end; in (d)6, inserted a comma following "If", deleted a comma following "tenant-customer" and substituted a semicolon for a period at the end; recodified former (d)2 as (d)7; in (d)7, substituted "If a diversion is found, the" for "The" and substituted a semicolon for a period at the end; recodified former (d)2i and (d)2ii as (d)8 and (d)9; in (d)9, inserted a comma following "information" and substituted a semicolon for a period at the end; recodified the first and second sentences of former (d)3 as (d)10; in (d)10, substituted a semicolon for a period at the end; recodified the former third and fourth sentences of (d)3 as (d)11 and (d)12; in (d)11, substituted "; and" for a period at the end; in (e)1, substituted "; and" for a period at the end; in the introductory paragraph of (f), inserted a comma following "parties" and substituted "utility" for "company"; in (g)1, substituted a semicolon for a period at the end; in (g)2i substituted "utility's tariff; or" for "company's tariff."; in (g)2ii and (g)3, substituted a semicolon for a period at the end; in (g)3, inserted commas following "wires" and "hours" and inserted "/or"; in (g)4, substituted "utility's tariff;" for "company's tariff."; in (g)5, substituted "utility" for "company" and "; and" for a period at the end; in (i), substituted "all of its tenant-customers" for "its tenant-customer"; and in (j), deleted the former first sentence. Former N.J.A.C. 14:3-7.8, Record of customer's account, was repealed.