July 14, 2012

PUC reviewing Central Maine Power's bad-debt write-offs

By Tux Turkel tturkel@mainetoday.com
Staff Writer

Has Central Maine Power Co. done a reasonable job pursuing customers who don't pay their bills on time and minimizing bad-debt write-offs?

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Those issues are at the heart of a two-year old investigation at the Maine Public Utilities Commission.

The review was triggered by mounting sums that CMP has been unable to collect from non-paying customers. If the utility is able to write off that bad debt on its books, ratepayers would pick up the tab. In the ongoing case, the PUC staff argues that CMP shouldn't be allowed to charge off a total of $10.6 million.

That write-off would hardly be noticeable on a power bill, when spread across 600,000 or so customers, but it could add up over time.

"We felt we needed to do something," said Derek Davidson, director of the PUC's Consumer Assistance Division. "They were carrying a lot of arrearages that weren't going to get paid."

CMP delivers electricity but doesn't generate it. Through a complicated arrangement linked to the restructuring of Maine's electric industry, power suppliers to the state's standard offer service have the costs of bad debt estimated in their contracts. In recent years, CMP has sought to increase the amount of money set aside to cover uncollectible debt.

In the investigation, PUC staff question why the amount of money in arrears was growing and how it related to the company's decision to outsource some of its credit and collections functions.

CMP maintains that the lingering recession was responsible for most of the problems. It says it does a good job balancing customer service standards and PUC rules with the goal of minimizing bad debt.

No date has been set yet for the commission to decide the case. 

Staff Writer Tux Turkel can be contacted at 791-6462 or

tturkel@pressherald.com

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