PUC stands by decision to punish PGW for lien practices

The Pennsylvania Public Utility Commission has declined to reconsider a far-reaching 2016 decision to fine the Philadelphia Gas Works $27,000 and ordered the city-owned utility to refund $566,000 in late charges to an owner of several apartment complexes.

The PUC on Thursday unanimously rejected PGW’s request to revisit the decision, in which SBG Management Services Inc., an Abington rental-property manager, successfully challenged PGW’s practice of assessing 18 percent annual late fees on amounts that are under lien.

PGW has fought the decision because it has broad ramifications on the utility’s practice of slapping liens on thousands of indebted customers. Unlike investor-owned utilities, government-owned utilities like PGW can assess liens, which are legal attachments to real estate.

SBG, which owns and manages properties in North and Northwest Philadelphia, had disputed the accuracy of PGW’s billings going back to 2005, including the calculation of interest and penalties. In protest, it refused to pay its bills over long stretches, and PGW placed 39 liens on its properties.

The firm in 2012 challenged PGW’s practice of continuing to assess late fees for the amounts that the utility placed under lien. The PUC’s decision last year equates the liens to civil judgments and said they are no longer entitled to be treated as debts subject to PUC late fees.

The long-standing case highlights the complicated relationship between the PUC and PGW, which was the only municipal utility under its jurisdiction until the Legislature recently placed the troubled Pittsburgh Water and Sewer Authority there.

The commission also declined to reconsider its ruling that invalidated PGW’s practice of applying customers’ partial payments first to reduce the balance of late fees, rather than to pay off the customers’ underlying debt. That practice effectively compounded the amount of late fees PGW was able to assess.

The commission on Thursday gave PGW 90 days to reconfigure its billing system to comply with the order, which effectively removes any amounts under lien from thousands of customers’ current account balances. PGW last year said there were more than 81,000 gas liens on the city’s books, valued at $122 million.

PGW was also ordered to refund the $566,000 in late fees to SBG in 15 days. “We are grateful and appreciative of the PUC’s thoughtful and careful consideration of the issues presented,” SBG’s attorney, Donna S. Ross, said in an email Friday.

The utility is likely to appeal the decision to Commonwealth Court. A PGW spokesman was not immediately available Friday.

The PUC case is one of several complex legal challenges to PGW’s lien practice. In an unrelated federal class-action lawsuit, U.S. District Judge J. Curtis Joyner last year declared PGW liens on rental properties for unpaid tenant bills “invalid, null, and void.” That decision applies only to landlords hit by liens for unpaid tenant bills and is under appeal.