Small businesses are no longer subject to unreasonable back billing rules and now enjoy similar protections to the ones residential customers have.
Huge back-bills can literally bankrupt small business without a lot of extra cash. Organizations like The Utility Reform Network (TURN) advocated for the same limits that apply to residential customers to apply to small businesses: three months in cases of utility errors.
The previous rules inexplicably allowed utility companies to hold small businesses responsible for up to 3 years of back charges due to utility billing or meter error. The new rules revise utility back-billing tariffs so that utilities may only back-bill small businesses for up to three months rather than the current rule of three years.
‘Billing error’ can include incorrect meter reads, clerical errors, incorrect billing calculations and wrong daily billing factor, among other things. ‘Meter error’ relates to non-registering or incorrectly registering meters, which result in a slow meter and, thus, undercharges to the residential customer.
Deposits on top of those bills were also creating an additional burden for business customers who were hit with huge back bills and fell behind on payments. Now, no additional deposit will be required for a small business to restore service in back-billing cases, and all deposits for small businesses will have new limits.
Although the Commission did not go as far as TURN had hoped in forbidding deposits to re-establish service and late payment deposits, there are better restrictions on the size of the deposit, which will now be limited to two times the average monthly bill. In addition, deposits cannot be charged when service is being re-established after failure to pay back charges.
Small business customers are customers that either: use less than 40,000 kilowatt-hours a year or less than 20 kilowatts at a time (known as the energy demand); use fewer than 10,000 therms of gas a year; qualify as a ‘microbusiness’ under Gov C §14837.2., defined as a small business which, together with affiliates, has average annual gross receipts of $3,500,000 or less over the previous three years; or is a manufacturer with 25 or fewer employees.
In these difficult economic times, it is good to know that small business can no longer be subject to the huge utility bills the previous rules allowed.
If you would like more information, call The Utility Reform Network at 1-800-355-TURN (8876). You can also visit the TURN website at www.turn.org.
Ana Montes is Organizing Director at the The Utility Reform Network in San Francisco.