In a decision expressing dismay at what it called “the disparate treatment of customers of certain public service utilities,” the state’s Public Utilities Regulatory Authority issued a $4.48 million civil penalty this week against Avangrid’s United Illuminating, Connecticut Natural Gas, and Southern Connecticut Gas companies.

The penalty, outlined in a notice of violation and proposed final decision, is a result of Avangrid failing to contact customers to provide information regarding the COVID-19 Payment Program. Further, the notice alleges that Avangrid violated state statute when its employees referred accounts to third-party collection agencies without providing adequate notice to those residential customers.

“Connecticut residents should not experience such a disparity in the treatment of delinquent accounts solely based on which company’s service territory they reside in,” according to PURA’s proposed final decision in the matter. “The evidence gathered in this investigation illuminates not only the disparities among the Public Service Utilities in their collection practices generally, but how those practices were inequitably altered (or not) by certain companies during a global pandemic and an economic emergency.”

Avangrid has the right to request a hearing on the matter within 20 days after which the decision becomes final.

Gage Frank, spokesman for Avangrid, said the company is currently reviewing PURA’s draft decision and 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.”

In April 2020, PURA issued an interim decision that required the establishment of a payment program for customers requesting financial assistance during the pandemic that would include an option that they could pay what they can, when they can. The Authority says there were specific requirements for these public service utilities to communicate this program to their customers – including “proactively and directly” contacting any residential, commercial or industrial customer after the first missed payment.

In February, Avangrid and Eversource filed a motion to clarify whether to continue to offer the payment program when Gov. Ned Lamont’s emergency authority expired, to which the Authority mandated that they continue the program through June 30, 2022.

PURA states in the notice that Avangrid continued to forward customers with outstanding balances, who fail to make payments or do not enroll in a payment arrangement, to a collections agency, which can then apply to the court to garnish the customer’s wages.

“The Companies did not suspend all collection activities as a result of the COVID-19 pandemic or the Interim Decision; instead, Avangrid instructed its legal collections firm to use a “softer approach,” according to the notice.

Since April 2020, Avangrid’s collections firm filed more than 200 applications for wage garnishments against customers, the notice states. “The Companies suspended the filing of any new lawsuits by the legal collections firm on March 19, 2020, but continued pursuing collection activities for those lawsuits pending before the pandemic, including applying for wage garnishments if a customer failed to comply with a judgment.”

Further, PURA notes that Avangrid told its collection agency to notify customers about the COVID-19 payment program, but not those with a judgment against them.

“Garnishing wages is one of the most severe forms of debt collection; therefore, violations of Authority orders that may have resulted in unwarranted or avoidable wage garnishments are particularly egregious and necessitate substantial sanctions,” according to the notice.

The penalties will be disbursed to the companies with UI paying $2.3 million, SCG paying $1 million, and CNG paying $1.1 million – all of which will go to Operation Fuel, a program for residents who are struggling financially.

Consumer Counsel Claire E. Coleman said she filed a petition in March 2022 to investigate the lawsuits and wage garnishment actions pursued during the pandemic.  She said the notice and the proposed final decision help hold companies accountable for wage garnishments and lack of important information to customers in a vulnerable position.

“UI should have been seeking to assist low-income customers during the unprecedented financial challenges that COVID-19 inflicted upon them, not placing greater pressures on these already overburdened customers and their families,” she said.