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Chester landlord's Peco fight hits $100K

Thousands of customers have billing disputes with utilities. What sets Chester landlord Daniel P. Vermeychuk apart is the sheer scale of the amount Peco Energy Co. says he owes: about $100,000.

In a rare 3-2 party-line split, commission members voted to explore the sensitive issue of how much low-income customers should be required to pay for monthly energy costs. State policy established in 1992 sets the limit at 17 percent of a household's income.
In a rare 3-2 party-line split, commission members voted to explore the sensitive issue of how much low-income customers should be required to pay for monthly energy costs. State policy established in 1992 sets the limit at 17 percent of a household's income.Read moreDavid Swanson / Staff Photographer

Thousands of customers have billing disputes with utilities. What sets Chester landlord Daniel P. Vermeychuk apart is the sheer scale of the amount Peco Energy Co. says he owes: about $100,000.

For more than a decade, Peco and Vermeychuk have been feuding over unpaid gas and electric bills. Between 2008 and 2011, Vermeychuk closed six accounts, and Peco transferred the balances to other accounts in his name.

In April 2013, Peco sued Vermeychuk in Delaware County Court to recover the accumulated debt, the largest amount owed by a residential customer. It also sought a court order to seize the gas and electric meter on his last remaining account, a Chester apartment.

Vermeychuk complained to the Pennsylvania Public Utility Commission, saying Peco was charging him for accounts he had closed or never opened.

"It's just the craziest thing I've ever been involved in," Vermeychuk, 63, said in a recent telephone interview. "I certainly don't owe that kind of money."

Last month, the PUC dismissed his complaint. Commissioner Pamela A. Witmer said Vermeychuk had actively employed strategies to avoid payment. But she was also troubled that Peco would allow such an "astronomical balance" to build up.

"I recognize that it is not possible to completely prevent bad actors from attempting to take advantage of the system," Witmer said. "However, it is critically important to the customers who are ultimately left footing the bills for such abuses that our utilities act vigilantly to prevent them."

Non-paying customers are a persistent problem for utilities, which must adhere to strict rules governing service cutoffs. Last year, Pennsylvania gas and electric utilities wrote off about 2 percent, or $171 million, of $8.6 billion in residential billings, according to the PUC.

Peco's net write-offs of about 1 percent of residential billings, or $26.5 million, was second-lowest in the state. Philadelphia Gas Works, which serves a large low-income population that struggles to make payments, wrote off $41.7 million, or 8 percent of its billings, highest in the state.

Next year, utilities must begin to report their collection efforts for all residential accounts that owe more than $10,000. The new law also tightens the process through which customers get medical certification that their health would be impaired if service were shut off, which the PUC said Vermeychuk employed four times to prevent Peco terminations.

Peco said Vermeychuk, a lawyer, delayed collection efforts by filing legal challenges and engaging in stall tactics.

"This is a very unusual case, where a customer was able to extend service and accumulate such a significant balance by prolonging the litigation process," said Ben Armstrong, a Peco spokesman.

Vermeychuk's name appears frequently in Delaware County Court records. More than 100 actions involving Vermeychuk, his wife, Doris, or both have been filed since 1980, according to the court's records. Most are collection actions.

Seven times, credit-card companies and contractors have filed to recover debts. About 65 cases were municipal liens, mostly for nonpayment of trash or sewer bills at the couple's properties in Chester, or their home on Copples Lane in Nether Providence Township. A bank collection action also is pending in New Jersey, where Vermeychuk has a property in Avalon.

Vermeychuk, a third-generation Chester landlord, said that the liens were for bills incurred before he inherited several properties from his parents in 1978, and that the debts have been paid off.

According to docket sheets, almost all the liens are for billings after 1980, and many are still listed as unresolved. The most recent were filed in 2014 by the city of Chester against Doris E. Vermeychuk for $35,000 in accumulated unpaid trash-collection fees at the five rental properties.

Vermeychuk's court cases are often protracted, and some result in negotiated settlements for reduced amounts. He has appealed six cases to Superior Court, one to Commonwealth Court, and three to the state's Supreme Court.

He appealed the 2013 lower-court ruling that allowed Peco to seize its meters. After his appeals failed, the utility removed the meters a year ago. Vermeychuk is still fuming because the court acted while his PUC complaint was pending.

"I can't believe they came for the meter when one of the basic things in public utility law is you can't turn off service while there's a decision pending," he said.

Vermeychuk said that he earned his degree in 1990 from the Delaware School of Law and that his practice was mostly related to his real estate investments. He said he also represents other Chester landlords.

Peco filed at least two previous actions against Vermeychuk, in 1993 and in 2003, when it sued him and his wife to recover $28,300 owed at their home address. In 2007, Peco obtained an order to garnishee two bank accounts.

In 2008, Vermeychuk began closing accounts, and Peco transferred the balances to the remaining account. Vermeychuk argued that the old debts had expired because of the statute of limitations.

Not so, Peco attorney Shawane L. Lee told PUC Administrative Law Judge Cynthia Williams Fordham at a January 2014 hearing in Philadelphia.

"Mr. Vermeychuk would like your honor to believe that he is no longer responsible for that balance because the balance is several years old," Lee said, according to a hearing transcript. "Well, it doesn't work that way."

She said Vermeychuk last paid his bill in 2005. Late fees alone accounted for $32,548 of his debt.

At the hearing, Vermeychuk said that he had closed the accounts in 2003, and that tenants had stolen the power used. But Peco introduced evidence that Vermeychuk requested a medical certification in 2007 to forestall cutoff and requested a payment agreement in 2009, indicating that he continued to accept responsibility. Vermeychuk denied he had made the requests.

Vermeychuk also had sought to delay the hearing because Peco provided records only a few days earlier.

Peco said Vermeychuk caused the delay by waiting to request the information.

"This whole matter is a simple, skillful ploy to delay proceedings in paying Peco the almost $97,000 balance," Lee said.

Vermeychuk pleaded poverty and said he was generous to his low-income tenants.

"I don't have a lot of money," he said, according to the hearing's transcript. "I drive a 10-year-old truck. I have poor individuals in the city of Chester that really don't have anywhere else to go, and they can't afford to pay a lot of rent. But I'm a third-generation doing that in my family, and I keep it up because it's for the public good down there and I give people decent housing."

In a March 2015 decision, the judge rejected Vermeychuk's arguments. Vermeychuk requested that the PUC consider the matter.

It rejected his complaint on Nov. 5. PUC rulings can be appealed to higher courts.

Meanwhile, Peco's suit seeking payment is still pending in Delaware County. Interest is accruing at 1.5 percent a month.

Despite the adverse rulings, Vermeychuk and the PUC agree on one matter:

"How do you run up a bill like this and not have it turned off?" he said. "I mean, there's something wrong there in the way this has happened."

amaykuth@phillynews.com

215-854-2947@maykuth