Utilities must be transparent about secret ‘risk ranking’ of customers

It’s unfair to keep customers in the dark about a process that could literally leave them in the dark.

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A crowd protests a proposed rate hike on natural gas at the headquarters for Peoples Gas at the Aon Center in downtown Chicago, Monday, March 27, 2023.

A crowd protests a proposed rate hike on natural gas in front of the headquarters for Peoples Gas at the Aon Center on March 27.

Ashlee Rezin/Sun-Times

The less privileged shouldn’t have to face more of a burden than those who are more financially stable — but they do when it comes to how public utility companies treat them when they’re facing dire financial straits.

ComEd, People’s Gas, its sister company North Shore Gas, and the downstate and gas and electric company Ameren all use the practice of customer “risk ranking” to flag delinquent customers for potential disconnection, as the Sun-Times’ Stephanie Zimmermann reported on Sunday.

All those utilities use the same Nevada-incorporated company to help them tabulate customer payment data to access how much of a financial risk their customers are in terms of ability to pay. The “riskier” the customer, the more likely they don’t have the resources to pay their bills — and the more likely they are to find their service quickly disconnected, leaving them without power or heat.

The “riskiest” ComEd customers, for instance, could have their service cut off 16 days after they are flagged for disconnection based on their risk ranking. Others who aren’t designated as high-risk receive a 40-day cushion.

It all means faster disconnection for those with the least ability to pay, while those with more financial means get more of a break. At a time when more people are struggling to pay their utility bills, more people are at risk of finding their utilities shut off if they get behind on payment.

Editorial

Editorial

Meanwhile, public utilities have asked the Illinois Commerce Commission to approve massive rate increases that, if approved, would mean even more burden for those who can least afford it.

Which makes it that much more important for utility companies to be transparent. Right now, they aren’t just guilty of shutting off some customers faster than others. They are also shutting everyone off from key information.

It’s important, but not enough, to provide customers with information about public and private grant programs and payment plans to help them avoid being cut off from service. The utilities should also inform customers where they fall on the risk scale and how it works, none of which is outlined on utility bills.

Don’t keep customers in the dark about a process that could literally leave them in the dark.

A right to know

It’s not surprising that consumer groups, as well as individuals who’ve lost their jobs or are saddled with medical and other bills, call the risk ranking system unfair.

Utility companies insist that their risk ranking are fair and accurate, based on information like payment history and length of time as a customer. (Nicor Gas uses its own in-house system rather than the Nevada firm.) They have a point: Using a formula to figure out which customers could likely default is important for record-keeping and to keep bad debt at bay.

“Any bill left unpaid by one customer ultimately ends up on the bills of other customers,” as Peoples Gas spokesman David Schwartz explained.

Customers who make their payments on time certainly don’t want to pay more than they already do, nor should they have to. But all Illinoisans deserve to know the steps involved with risk rankings, how quickly we might face disconnection if we can’t pay, and whether we are considered a higher-risk customer.

That information is even more important given the prospect of those massive utility rate hikes. As Citizens Utility Board’s Executive Director David Kolata put it, “more transparency is needed.”

When algorithms and data science are used to determine “high risk” customers, the findings should be used to “help, not hurt” the most vulnerable, Kolata added.

The ICC has rightfully started to examine collection practices of all the utilities. Ensuring that those practices are fair and unbiased should be part of any agreement regarding rate hikes.

ComEd has also worked toward leveling the playing field by no longer targeting the highest-risk customer groups when they hit $100 in past-due bills, while allowing the two least-risky groups to rack up $300 in bills.

The electric utility also says it is working with the state to automate the system that permits the company to pause disconnection when a customer has a pending application for a grant through the Low Income Home Energy Assistance Program (LIHEAP). Achieving that is key since it would lessen the chance for customers with pending applications to fall through the cracks and get disconnected.

All of us rely on public utilities to get through the day. We all need to know the facts about what happens should we have trouble paying up.

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