The deposit dilemma 

NLR Electric policy puts the squeeze on a struggling customer.

click to enlarge BRIAN CHILSON

By his own admission, Sherwood resident William Kendrick has had his lights shut off for non-payment several times in the last three years. Like a lot of people in America, he's having hard times. He bought his house in 2006, but lost his job, and suffers from a chronic illness that has required months of costly treatments. Now he waits tables, has filed for bankruptcy and tries to hold on. Before you judge him too harshly, ask yourself, how many paychecks am I from sitting in the dark?

In a bad spot, Kendrick says the deposit policy of the North Little Rock Electric Department is making things worse. By city ordinance, North Little Rock Electric levies an additional $100 deposit every time it reconnects a customer's lights — quite a bite for someone already struggling to pay his bills. The additional deposit is on top of a $25 dollar reconnection fee ($50 if you want them turned on after hours) and the outstanding balance that's owed. North Little Rock Electric is currently holding $500 of Kendrick's money as deposits.

"I honestly didn't realize exactly what it was until I called them and asked them to explain it to me," he said. "I thought it was just the reconnect fee, but it turns out it's not." Kendrick said the policy doesn't make sense for struggling consumers, especially in a shaky economy.

"I think it's an unjust policy for bad economic times," he said. "If they're already holding a huge amount of my money, and I need $175 to get my electric bill paid or they're going to turn me off, why can't they take that out of these deposits they're already holding? Otherwise, what's the point in taking all these deposits?"

A spokesperson for Entergy Arkansas said that if one of their customers is terminated for non-payment, there is no deposit required if it's the first time in a 12-month period. If service is terminated more than once in a year, each subsequent reconnection requires a $25 deposit.

David Melton, customer service manager for North Little Rock Electric, said that the policy on deposits is determined by city ordinance. He said the electric company can levy a $100 deposit every time a customer's power is shut off, up to an amount equal to twice that customer's highest-ever monthly bill (Kendrick's highest-ever bill was just over $270). The additional deposit is reflected on the next month's bill. Power is shut off 28 days after bills are mailed out, unless the bill is paid or the customer contacts the utility to arrange payment. A technician must physically go to the residence to turn the power on and off. Melton said that if a customer has a "good pay history" for 12 months — meaning, at most, one late payment — their deposits are credited to them with interest.

Asked if it makes sense for North Little Rock Electric to shut off someone's lights for non-payment rather than dipping into the stockpile of the customer's money already on hand, Melton said North Little Rock Electric doesn't have the power to alter the policy. "I'm not the decision maker," he said. "The City Council is the decision maker. I'm required to follow that."

Ward 2 Alderman Maurice Taylor said he's familiar with the North Little Rock Electric deposit policy, and didn't know the utility charged customers who fall behind on their bill an additional $100 deposit every time their lights are turned back on. He said the City Council might need to reexamine the deposit policy, especially given the hard economic times.

"You've got people being laid off, businesses closing and people losing their income stream for one reason or another," he said. "If that [the additional $100 deposit] is the case, then we need to look at reexamining things and maybe mirroring what Entergy does .... Maybe we can do a better job of helping people out."

But Debi Ross, Ward 1 alderman, said that customers who are having problems paying their electric bill can request a free energy audit through North Little Rock Electric, and can apply for financial assistance with their utilities through the Central Arkansas Development Council. She said North Little Rock's deposit ordinance is in place to help protect the city.

"Everyone seems to be having a tough time in one situation or another," Ross said. "But we still have to protect the interests of the whole city, because this affects everybody in the whole city. If we're losing money in one account, it's got to be paid somewhere. I don't want to sound like I'm not compassionate, but we do have to look after the interests of the city."


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