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Pay Up or Power Down

Nova Scotia Power tacks seemingly arbitrary "security deposit" charge to customers' bills

by Miles Howe

Watch your meter closely, or you might be in for a surprise. (photo: Miles Howe)
Watch your meter closely, or you might be in for a surprise. (photo: Miles Howe)

Having trouble paying your power bill? Be careful: don't fall too far behind on the wrong day, or you might just find a pricey surprise in the mail. Nova Scotia Power (NSPI), the Emera-owned monopoly power provider to almost all of Nova Scotia's 921,000 citizens, has at its discretion the ability to add a lump sum equal to up to three months’ service, known as a “security deposit”, to its customers’ power bills.

The decision to add a “security deposit” to a ratepayer’s bill is measured on a vague series of guidelines, which no one at NSPI appears able to explain fully. What is clear, however, is that a customer with errant bill payments has a good chance of being slapped with an added charge worth up to three months of average power consumption.

Receiving these startling bills in the mail has roused some Nova Scotians to take action against NSPI, with mixed results. The following two individuals received added “security deposit” charges on their power bills, and chose to fight back. The reaction of the power provider differed greatly between the two cases.

Take the case of Deborah Anthony. To Anthony, the relationship between power service provider and user seemed fairly straightforward. She paid for the power she used, and that was it. So it didn't sit well with Anthony when in 2008, a tidy sum of $385 was added to her monthly power bill.

“I've had a power bill for thirty years plus,” says Anthony. “It hasn't always been paid on time, but it's always been paid.

“[Nova Scotia Power] send[s] you your bill and you have a particular date to pay your bill by. And my communication to anybody that bills me is this: The money I send you is mine. I earn it...If I chose not to send what you're looking for by a specified date, you have the right to charge me a late fee, which I take the responsibility to pay. That was the problem that Nova Scotia Power had with me originally. I couldn't pay the bills in full, and I was paying them what I could, when I could.”

For close to a year, Anthony lived with the $385 surcharge on her monthly bill. Indeed, she watched the exorbitant fee collect interest. Each month, when she sent in her power bill payment, she specifically earmarked her bill payments, writing on her cheques that the money was meant as payment for charges accruing from actual power use, and were not meant for the “security deposit.”

Then, according to Anthony, in December 2008 NSPI took her monthly payment, applied it to her security deposit, and promptly shut off her power, saying that her actual power usage payments were in arrears. Anthony, the single mother, was left powerless in the cold of the Nova Scotian winter.

Understandably, Anthony filed a complaint against NSPI.

She demanded an outside mediator examine her untenable situation, and NSPI was pleased to comply. Indeed, they even went so far as to seek out their own “independent” dispute resolution officer - who happened to be Don Farmer, reputed to be himself a former NSPI employee.

Farmer, in going through the motions of resolving the dispute between Anthony and NSPI, was quick to point out that Nova Scotia Power was only following its own regulations when it applied security deposits to clients' accounts. Such logic, the classic “I was only following the rules” argument, is always suspect, especially when dealing with corporations.

The wording of regulation 6.6, of Nova Scotia Power's set of guiding regulations, upon which Farmer rested his decision, reads:

When requested by the Company, a customer shall deposit with the company a sum equal to the estimated charges for three months' service when billed bimonthly...This deposit is to be held by the Company as security for the payments of its bills. When the customer ceases to use the service and pays all bills, or the Company deems a deposit is no longer required, the deposit with interest is to be returned to the customer...The Company shall review its customer deposits every two years with a view to determining whether or not a deposit is still required.”

In other words, when Nova Scotia Power requests it, you shall pay a sum equal to three months' charges.

Farmer further noted that there would be no way to remove Anthony's security deposit, because there was “[n]o basis on which an exception to the requirements of an approved regulation should be made in your case...[I]ndeed, N.S. [Nova Scotia] Power is forbidden under law to treat any customer on a preferential basis.”

In effect, having decided to request the money, there was simply no way that NSPI could un-request the money. To do so would be to show preference, and that would be breaking NSPI's own laws.

If you, dear reader, are confused at this point, perhaps it is because logic suggests that a series of guidelines would exist that determine when to apply security deposits to customers’ bills.

Surely there must be a set of preconditions and indicators, coupled with warnings of ascending timbre, that precede the heavy-handed decision to tack an extra three months charge onto a customer's bill – especially in light of the fact that those having difficulty in meeting their monthly payments are more likely to be in general financial difficulty?

Surely this irreversible demand, against which Don Farmer suggested he was powerless, is not just applied helter-skelter, whenever the mood strikes? Surely there is more to all this than vaguely-worded Regulation 6.6?

Yet according to NSPI, there is not.

“There is no threshold to the process,” says Mike from NSPI customer service. “It is entirely discretionary.”

With encouragement, Mike from NSPI customer service fetches the manager of wherever it is that Mike is. Mike's manager ensures him that this is in fact the case.

“But it’s not meant to be Draconian,” says Mike. “It’s not meant to squeeze anybody.”

Meaning aside, the notion that there is truly no precise manner by which NSPI determines whether or not to add a three month “security deposit” to a customer's bill merits at least one more call. Perhaps Mike from customer service is simply misinformed.

“It could be a combination of them not having paid their bill on time...them being asked to do so, and not having delivered on it, and sometimes the payment not going through...would be another scenario,” says Neera Ritcey, media contact person at NSPI. “I couldn't give you all the scenarios, but it would be those types of things.”

Of course, every now and again NSPI drops a security deposit into the wrong customer's lap, and by “wrong” is meant someone who is financially able to access private legal council. In these cases, NSPI's reaction to challenges of security deposits appears to be quite different .

“My case involved an individual who has been a long-term client of Nova Scotia Power, who has always paid his bills,” says J. Gordon Allen, of Auld Allen Barristers Solicitors. “Nova Scotia Power never lost a cent or had to put anything out to collection with this individual.

“A couple months of the preceding year he had had some health problems. He was still paying his bills, but about every second bill was late. And when it’s late, the next bill is there and there's interest added on.

“All of a sudden he got a bill and there was a very large charge added onto it,” Allen says. “I don't remember the exact amount, but it was about five or six hundred dollars. It wasn't small. And that was shown as ‘owing’. He'd paid his power bill, but that was still showing, and there was interest building up on that.”

Allen spoke with NSPI, who confirmed that the security deposit was perceived as required for their collection costs. But he also confirmed that NSPI did not take any real collection activity, in terms of employing an outside agency, that might warrant a surcharge of any type.

No outside party had been bill collecting for NSPI, so Nova Scotia Power had not actually suffered any loss by which they could merit applying a “security deposit.”

And when Allen suggested to NSPI that the justifications that they used to justify security deposits weren't really just, the monopoly backed off, and took the security deposit off his client's account.

“As a consumer, and as someone who's been a lawyer now for nineteen years, I've never come across this circumstance,” says Allen of security deposits.

“The sad part is, it would be those that would be struggling to make payments that would more than likely have this applied. And they're less likely to have the ability to dispute it.”

So take heed. There are no guidelines by which NSPI determines whether or not you are in arrears enough, or whether or not you are enough of a security risk to merit a security deposit. One day it might just happen. Or, it might not. And if you can afford a lawyer, as in most things, it can all be made to go away, whatever Don Farmer might say. Such is life under a private monopoly power provider.

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Comments

Such a shame

I lived in an apartment with a meter inside, so it was my responsibility to send NS power. Sometimes I'd get 600 bills, 1000 bills. I know what its like to get these kind of absurd bills. Although, I was able to send in my meter again to try and sort out the faulty bill. The stress of it made me move out of an apartment. That policy seems draconian to anyone who has dealt with NSpower from the bottom. The customer is always last. 

NSpower should be put back into the public hands. There is not reason why we should have this kind of private mishandling of peoples lives, and their power bills.

N.S.Power's arbituary invoicing deposits

   This is an action that is arbituary by the monopoly power corporation and crys out for a class action suit by Dalhousie Law School .

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