Shortly after Valeria Carranza moved into her Takoma Park apartment, she got her first electric bill from Pepco. In addition to billing Carranza for the power she used, Pepco added a $390 charge it called a “balance forward.” When Carranza called, the utility told her she had to pay the deposit to “establish credit with Pepco.”
What that meant was that rather than run a credit check to determine if Carranza was a risk, Pepco was charging her up front just in case she might miss any future payments. When Carranza refused to pay, Pepco threatened to shut off her electricity.
As soon as Carranza told the utility that she worked for Montgomery County Councilman Hans Riemer, D-at large, however, Pepco waived the “balance forward” fee.
Carranza may have gotten a break not available to other residents, but last week she filed a complaint with the Maryland Public Service Commission, which is now investigating. Meanwhile, her boss, Riemer, wrote on her behalf to Pepco Regional President Thomas Graham.
Riemer suggested that a large fee like the one Carranza faced would be burden on low-income residents. If the PSC determines that Pepco has done nothing wrong, Riemer said he would pursue a change to the law to eliminate or cap “balance forward” fees.
While Pepco waived the fee for Carranza, the utility defends the charge as legal and in the best interest of its customers.
“Having deposits avoids or reduces the number of cases in which the burden of collectible bills gets borne by ratepayers,” said Jerald Pasternak, Pepco’s vice president for Maryland affairs.
Maryland law allows a utility to make new customers pay a deposit between $5 and two months’ cost of providing service, as long as the utility returns the deposit with interest after a year.
Pepco’s deposits are within the legal range and if the deposit is more than $35, Pepco will offer customers a payment plan, according to spokesman Clay Anderson.
However, Carranza’s total energy cost for her first month was $32.60, less than 10 percent of the deposit she was charged. She also was not offered the option of a payment plan even though her deposit was $390, she said.
And since Pepco said it didn’t run a credit check, Riemer said he wasn’t sure how Pepco determined that Carranza was a credit risk.
But Carranza said she has a theory: She has a Hispanic surname and lives in the Long Branch neighborhood in Takoma Park.
Anderson would not say how many people are charged this type of deposit or how much a deposit usually is. He declined to discuss the specifics of Carranza’s account.
