New city power customers and those who don't pay their bills on time will have to hand over more money for deposits and connections now that the City Council has approved a new fee structure.
The higher deposits and service fees have no effect on basic electric utility rates, and officials estimate only a small percentage of customers will feel the impact of the new fees.The restructuring is part of a city campaign to crack down on residents and businesses that don't pay their power bills.
Beginning in June, new residential power customers must pay a $75 deposit to establish electricity service with the city. The current deposit is $50. The deposit is refunded with interest after two years of prompt payment of monthly power bills.
Commercial customers' deposits - equal to two months' average billing - are unchanged.
In addition to the deposit, the new fee schedule sets a connection charge of $30 to turn on power at a residence. Commercial customers will pay $30 or $60, depending on the type of power service they receive from the city.
Provo currently does not charge a connection fee. The new connection fee will replace the $20 transfer fee the city now charges to move established service from one Provo address to another.
Residents who have service disconnected because of non-payment will now have to pay $60, in addition to paying the overdue bill and the required deposit, to have power reconnected.
Businesses will pay $60 or $150, depending on the electrical service received, for reconnection if power is disconnected for non-payment. The city currently is allowed to charge a $20 reconnection fee, but has not enforced that ordinance.
The new fee structure has practical and philosophical justifications, city officials say. Philosophically, the city wants each power customer to pay directly for services received, rather than have the cost of providing those services subsidized by utility ratepayers.
On the practical side, the Provo Energy Department wants to lower its total of delinquent accounts by making it more expensive for those who don't pay their bills on time.
Last November, the department was owed more than $1.5 million in late payments. More than $1 million of that amount was more than 90 days overdue.
The department tightened credit policies, began an aggressive collections program and cut off power service to those who refused to make arrangements to pay their overdue bills.
As a result the department has slashed its accounts receivable by two-thirds, to just over $500,000.