Avangrid Fined $4.48 Million by State Regulators for Pandemic Debt Collections

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Avangrid, the parent company of electric utility United Illuminating, was fined $4.48 million on Monday by state utility regulators, who concluded that the company’s electric and gas subsidiaries in Connecticut had violated state law by trying to garnish customers’ wages without first informing them of a payment plan.

The decision came out of an eight-month investigation into the collections practices of Connecticut’s major utilities during the early days of the COVID-19 pandemic, which found that Avangrid – the parent company of United Illuminating, Southern Connecticut Gas and Connecticut Natural Gas – continued to send customers to collections despite a moratorium on utility shutoffs.

In March 2020, the Public Utilities Regulatory Authority ordered a halt to all utility shut offs considering the uncertainty of the COVID-19 pandemic. On April 29, it established the COVID-19 Payment Program. Utilities were required to “proactively and directly” contact customers who missed payments to offer that program, said PURA.

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Avangrid spokesperson Gage Frank said the companies are reviewing PURA’s findings. 

“The Companies maintain that they have respected and complied with the moratorium, and that the collection activity involving the accounts that are the subject of the investigation pre-dated the moratorium,” Frank said. “Caring for our customers is the highest priority for UI, SCG and CNG, and reflecting our commitment to help them during these challenging times, the companies continue to offer energy assistance programs and payment plans for those facing difficulties paying their bills.”

The legal collections firm contracted by Avangrid’s companies stopped filing new lawsuits for unpaid utility bills on March 19, 2020, but continued collections for lawsuits that were filed before the shutoff moratorium began. That included filing at least 204 applications for wage garnishments over those unpaid bills, according to state regulators.

During the shutoff moratorium, Avangrid told the collections firm to provide the COVID-19 payment plan information to its customers with unpaid bills, but not to any of the customers with existing judgments against them. PURA said those guidelines violated its order that the companies offer the payment plan to those customers.

Avangrid argued to PURA that the courts prohibited them from offering customers a payment plan after a judgment was entered against them, and that the COVID-payment plan was less affordable than the court judgments. PURA said neither of those arguments is true.

PURA said Avangrid’s subsidiaries also violated state law by not properly notifying customers that their third-party collection agency would report their debt to credit bureaus. Avangrid referred at least 48,833 inactive accounts to collections between April 2020 and 2022, without giving the customers proper notice, PURA said.

PURA ordered Avangrid to pay a $10,000 fine for each of the 204 customers for which its companies sought wage garnishments without offering the payment plan.

“Garnishing wages is one of the most severe forms of debt collection,” PURA said in its order. “Therefore, violations of Authority orders that may have resulted in unwarranted or avoidable wage garnishments are particularly egregious and necessitate substantial sanctions.”

Avangrid was also fined $50 for each of the inactive accounts sent to collections without proper notice. In total, Avangrid was fined $4,481,650, though the company can request a hearing to contest the fine.

PURA’s investigation – spurred by Office of Consumer Counsel Claire Coleman – also focused on the collection efforts of Eversource and its gas and water subsidiaries. PURA could not say on Monday whether Eversource or any other company would be issued a notice of violation from the investigation.

But in a related draft decision issued Monday, PURA found that Eversource told its collections firm to stop all collections activities in March 2020, and it has not sought any new wage garnishments since then.

PURA said that while Eversource has periodic calls with its collections firm for updates to customer communications, Avangrid “exercised nearly no oversight over its collections firm,” which does not report the number of judgements and wage garnishments to Avangrid.

In that draft decision, PURA proposed ordering Eversource and Avangrid to each provide a cost-benefit analysis for using wage garnishments as a tool for collections over the past 10 years.