Joanie Pierce lives with her two dogs in a small two-bedroom cottage south of downtown Colorado Springs. She watches her pennies.
On a limited income, Pierce thought Colorado Springs Utilities' budget billing program might be a good thing — it would average her utility costs over 12 months, to keep bills from spiking during the winter. But Pierce says she wound up owing $1,000 that she doesn't know how she'll pay.
A Utilities official defends how the account was handled and says budget billing is a great option for ratepayers, especially those on fixed incomes.
In October 2008, Pierce says, she moved into the rental. She signed up for budget billing several months later. Her bill was $130 a month, but after a year, she was told the monthly amount was going up to $250 a month, because the city-owned enterprise reset the monthly average based on her utilities usage.
Pierce freaked. She couldn't afford it. She was in a pinch due to her job at a car dealership not paying as much as she expected. If she didn't pay the new $250 rate, she was told, service would be disconnected. But, she says, a Utilities worker told her if she got off budget billing, her utilities wouldn't be shut off. She agreed, and within a month or so, got a bill for an outstanding balance of $1,015.
Then Pierce really freaked.
"Why would you let somebody get that far in the hole?" Pierce wants to know. "They don't have an answer for that, and they don't care."
Utilities spokesman Steve Berry says the worst thing Pierce did was withdraw from budget billing: "If she had not opted out, a lot of that [$1,000] would have been made up in the summer months."
Berry says the $1,000 was due for the previous four months' usage during cold weather.
"If she had stayed on budget billing [through the whole year], it would mostly have been a wash," he says.
Under budget billing, Utilities reconciles accounts annually, resetting a monthly average for the coming year and determining whether customers used more or less service than what they paid for in the previous year. Berry says a balance is usually due the customer, and credit is issued. Berry says it's rare to have a big bill pile up on a budget-billing customer without Utilities identifying a problem early on.
"We do have internal controls in place to watch for big fluctuations to avoid huge recalculations at the end of the year," he says.
He adds that Utilities is trying to work with Pierce through its COPE program, which helps customers pay utility bills. Under Utilities' rules for budget billing, customers may be removed from the program if they fail to pay the budget payment each month by the due date. If that happens, the total account balance will be due.
Generally, Berry says, budget billing is a good tool for residential customers. (The program isn't open to commercial and industrial accounts.) But only 15,162 of Springs Utilities' 200,000 residential customers have signed up for it, and Utilities officials aren't sure why more haven't embraced the program.
"It's huge from a budgetary standpoint," Berry says. "We encourage people on fixed incomes to sign up."
But at the least, Pierce's story is a cautionary tale.
"They make it look like they weren't the big bully, but they were," she says of Utilities. "Either way, I'm screwed."
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