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TX Advocates Score Win for Low-Income Customers in Austin

December 13, 2013 — The Austin City Council recently adopted an ordinance addressing disconnections by city-owned Austin Energy. People who have their power shutoff will no longer have to pay half their debt to get service restored. Under the ordinance, no lump sum payment will be required upfront, and customers can pay off their debt over a two-year period.

"We've all been hearing from families...who are, for one reason or another, cut off and who are at risk of losing their housing, because they can't afford to pay half of it [their debt] back right away," said Austin Council Member Kathie Tovo, who proposed the change. "It's just an untenable situation."

Media reports stated about 17,000 Austin Energy customers are behind on their bills.

Prior to the new ordinance, Austin Energy gave customers 34 days to make a missed payment. During that time, the customer received two notices from the utility before finally getting a 24-hour disconnection warning. Customers could enter into payment plans, which could help stop disconnections from happening and could stretch re-payment over a year. Customers that didn't set up a payment plan were required to pay half their debt, plus any remaining balance within 15 days, to get service restored.

The ordinance ends the requirement of the lump-sum payment up front. It also allows customers to pay off their balances over at least two years. Customers can negotiate for a longer timeframe if they can continue proving they have a hardship. Advocates believe the ordinance will create consistency in the way Austin Energy negotiates with customers.

In the past, advocates said customers received different deals depending on who they spoke to at Austin Energy. Randy Chapman, executive director of the Texas Legal Services Center, stated some customers got 60 days to pay off their debt while others got 90 days. He said it created a situation like there was "a secret handshake, and if you know someone, you get better treatment." The ordinance puts a firm policy in place. A draft of the ordinance can be viewed here.

The advocates supporting the ordinance included the Texas Legal Services Center, Texas ROSE, and the National Consumer Law Center. They were joined by local community-based activists, including members of local interfaith coalition.

Sources: Media Reports, Texas ROSE, Texas Legal Services Center, National Consumer Law Center.