Avoiding Utility Shutoffs in New Jersey


The purpose of this guide is to provide information so utility customers will avoid an electric or gas shutoff. A while ago, I realized many social workers, members of the social service community and fellow advocates are not adequately prepared to provide counseling in the area of utility rules and regulations. Having worked in the area of low income energy issues for the past 25 years, I decided to compile this guide.

A few rules and observations to keep in mind. 1) A customer service rep will ask for as much money as they think they can get. They don't "negotiate" too often but might, if you know the rules. 2) Any agreement that you reach with a utility company must be doable for the consumer. 3) Deal with the situation before it turns into a crisis situation. 4) Learn the rules and regulations that govern utility companies. Call the Board of Public Utilities - the BPU. Learn their phone number by heart - 800-624-0241.

The rules and advice contained in this guide cover the seven investor-owned electric and gas companies under the jurisdiction of the New Jersey Board of Public Utilities. There are a number of other municipal owned and operated electric companies and even one rural electric cooperative in the state of New Jersey, none of which are regulated by the BPU. These local companies operate under their own rules and regulations.

Utility Customer's Bill of Rights

According to Board of Public Utilities regulations, "all utility customers shall be given a copy of the "Customer Bill of Rights" shortly after service commences. These rights, in accordance with N.J.A.C. 14:3-3.3, read as follows:

  1. You have the right to utility service if you are a qualified applicant.
  2. You shall not be asked to pay unreasonably high deposits as a condition of service, nor to make unreasonable payments on past due bills.
  3. You have the right to budget billing, or payment plans if you are an electric, or gas customer.
  4. You are entitled to at least one deferred plan in one year.
  5. You have the right to have any complaint against your utility handled promptly by that utility.
  6. You have the right to call upon the Board of Public Utilities to investigate your utility complaints and inquiries. Your service may not be terminated for non-payment of disputed charges during a BPU investigation.
  7. If you suspect it is not working properly, you have the right to have your meter tested, free of charge, once a year by your utility. For a $5 fee the meter test will be conducted under the supervision of the staff of the BPU.
  8. You have the right to a written notice of termination, ten days prior to the discontinuance of service.
  9. Residential service may be shut-off, after proper notice, Monday through Thursday, 8:00 a.m. to 4:00 p.m. A utility may not shut-off residential service on Friday, Saturday, Sunday or a holiday or the day before a holiday or if a valid medical emergency exists in your household.
  10. Winter Termination Program - If you are an elderly or low income customer having financial problems paying your bill you should request the company to enroll you in a budget plan in accordance with your ability to pay. You are required to make good faith payments of all reasonable bills for service and in return are assured of the right to have gas and electric utilities service from November 15, to March 15 without fear of termination of such service.
  11. If you live in a multi-family dwelling, you have the right to receive posted notice of any impending shutoff. This notice must be posted in a common area and/or sent individually to occupants.
  12. You have the right to have a "diversion of service" investigation if you suspect that the level of consumption reflected in your utility bill is unexplainably high.
  13. Service shall not be shut-off for non-payment of repair charges, merchandise charges or yellow page charges nor shall notice threatening such discontinuance be given.
  14. You have the option of having a deposit refund applied to your account as a credit or of having the deposit refunded by separate check.

Knowing these rights may help avoid needless shutoffs and reduce the number of gas and electric disconnections. Read the Board of Public Utility's Customer's Bill of Rights.

Preparations Before Contacting the Utility Company

Before you contact the utility company get prepared and know exactly what you want to say. If you work for a social agency, get to know your customer, ask questions. Consider it equivalent to a lawyer preparing his client for court testimony. Don't be surprised when the utility rep asks a question and it leaves you in a bad position.

Areas to cover include: 1) amount of the outstanding bill; 2) payment history; 3) any prior arrangement or budget plan; 4) length of time the bill has been outstanding; 5) circumstances (disruption in income, death, separation/divorce, medical bills, etc; 6) ability to pay; 7) eligibility for various energy assistance programs; 8) other factors; 9) hardship if service is disconnected.

The 25% Rule

Now let me introduce what I call the 25% Rule. On the back of every shutoff notice is a statement. The wording mentions the right to enter into a payment agreement with the utility company. The statement of your rights does not spell out your ability to avoid a shutoff by paying just 1/4 of the bill. Example: the bill is for $500, the bill says you must pay $400. The customer service rep says $400. Instead of accepting his statement or demand, ask him about the 25% rule. Under this rule you could pay $125 to avoid the shutoff.

Customer Name

To take full advantage of various energy programs - including the Winter Termination Program (WTP), the Universal Service Fund (USF), and the Low Income Home Energy Assistance Program (LIHEAP) - the electric and gas bills should be in the name of the person who is responsible for the bill. Failure to have the bill in the proper name may result in the denial of benefits or have other negative consequences. All the major investor-owned utility companies have adopted a policy whereby a customer can have their name added to the bill, even when there is an outstanding balance.

Deferred Payment Plans

You may wish to read a small section of the regulations that pertain to deferred payment arrangements. It discusses in detail the 25% Rule. It reads as follows:

14:3-7.13 Disputes as to bills
(c) Whenever a residential customer advises the utility that the customer wishes to discuss a deferred payment agreement because said customer is presently unable to pay a total outstanding bill, the utility shall make a good faith effort to provide the customer with an opportunity to enter into a fair and reasonable deferred payment agreement(s) which takes into consideration the customer's financial circumstances. In negotiating such a deferred payment agreement(s), a residential customer may not be required to pay, as a down-payment, more than 25 percent of the total outstanding bill due at the time the agreement(s) is made or executed. In the case of a residential customer who received more than one utility service from the same utility and the amount which is in arrears is a combination of those services, the utility shall offer a separate deferred payment agreement for each service based on the outstanding balance for that service prior to any proposed discontinuance for nonpayment. The utility shall not require such a customer to accept two or more deferred agreements that extend over the same time period. The customer shall have the option to enter into a deferred payment agreement(s) and have the remaining service(s) disconnected until satisfactory arrangements for payment can be made. A utility shall renegotiate and/or amend the deferred payment agreement of a residential customer if said customer demonstrates that his or her financial circumstances have changed significantly because of factors beyond his or her control.

(d) Such agreements which extend for more than two months shall be in writing and shall provide that a customer who is presently unable to pay an outstanding debt for utility services may make reasonable periodic payments until the debt is liquidated while continuing payment of current bills. While a deferred payment agreement for each separate service need not be entered into more than once a year, the utility may offer more than one such agreement in a year. The Board may order a utility to accept more than one deferred payment agreement in a year if said action is reasonable. If the customer defaults on any of the terms of the agreement, the utility may discontinue service after providing the customer with a notice of discontinuance. In the case of a residential customer who receives more than one utility service from the same utility and has subsequently entered into a separate agreement for each separate service, default on one such agreement shall constitute grounds for discontinuance of only that service.

Can't Work Out A Reasonable Payment Arrangement?

Just because you may have all the facts and a plan for paying down an outstanding bill, doesn't mean your negotiation will go well. Too often, the demand made by the customer service rep is left unchallenged. So what happens if you respond with a lower offer but it is refused? First, get the name of the person you have been speaking to, if you haven't done so already. Then ask to speak to his supervisor. Write down that person's name when introduced. If your are still unsuccessful in your conversation, threaten to file a complaint with the Board of Public Utilities (BPU) as the company has not negotiated in good faith. Finally, follow through and file the complaint.

What's the best way to file a complaint? The form of communication that receives the most attention and respect is a letter. From what is said, utility companies do not like having to answer queries from the BPU nor do they like to be reminded of all the complaints filed against them. There are several ways you can file a complaint. You can send a letter to: New Jersey Board of Public Utilities, Division of Customer Assistance, 44 South Clinton Ave, 9th Floor, PO Box 350, Trenton, NJ 08625-0350. You can file an online complaint. You can telephone the Board at 800-624-0241 during their business hours of 9a.m. to 4p.m.

Winter Termination Program

The New Jersey Board of Public Utilities maintains a written policy, known as the Winter Termination Program (WTP) by which regulated electric and gas utility companies cannot discontinue service to certain households during the period of November 15 through March 15. Individuals and households that receive benefits from any of the seven government programs listed below are protected. Other persons who are experiencing a financial hardship and are unable to pay their bill due to circumstances beyond their control may also be placed under WTP protection.

Financial hardships may be due to unemployment, illness, medical bills, a death in the family or other uncontrollable circumstances. Such a customer should contact the company and request WTP protection under this eighth category. The company should typically place the customer under WTP protection. If they refuse the customer should ask to speak to a supervisor or, if unsuccessful, appeal to the Board.

A customer protected against a shutoff during the heating season has certain responsibilities. To maintain their protected status he or she must agree to a budget plan. The utility company and the customer must agree to a "reasonable" plan that takes into consideration the household's ability to pay. The customer must make good faith payments toward their budget plan, if they have the ability to do so. The household must turn on over any heating assistance benefits they may receive to the proper energy supplier.

Protected households with service disconnected prior to November 15 are eligible for restoration of service upon making a good faith payment. A good faith payment is understood to mean an amount up to 25% of the outstanding balance. The actual amount should be determined on a case by case basis with an individual's ability to pay taken into consideration. Again, if the customer and the utility company cannot agree on an exact amount, the Board's Customer Assistance division should be contacted immediately.

The protected categories as established by the Board of Public Utilities are:

Customers protected by the Winter Termination Program should contact the Board's Division of Customer Assistance at 800-624-0241 for additional details on their rights and responsibilities.

Electric Shut-Offs Prohibited During Periods of Excessive Heat

A customer eligible for the Winter Termination Program should not have their electric service discontinued when the temperature exceeds 95 degrees. The rules are the result of legislation passed by the state legislature, referred to as P.L. 2002, c.62 and issued as BPU regulations in 2002 and 2003.

The regulations read in part, as follows: "If a customer is eligible for the Winter Termination Program under 14:3-7.12A, and the high temperature is forecast to be 95 degrees Fahrenheit or more at any time during the following 48 hours, an electric utility shall not discontinue residential service to a customer for reasons of nonpayment of a delinquent account, failure to pay a cash security deposit or guarantee, or failure to comply with a deferred payment agreement. The utilities shall rely on forecasts obtained from national weather stations covering their utility facilities, including the Newark Weather Station and the Atlantic City Airport Weather Station." The regulation also notes the customer is not relieved of any financial obligation to the electrical utility providing the service.

Medical Emergency

Residential service cannot be discontinued for nonpayment if a medical emergency exists. The regulations, located at N.J.A.C. 14:3-3.6(d), read as follows:

Discontinuance of residential service for nonpayment is prohibited if a medical emergency exists within the premises which would be aggravated by a discontinuance of service and the customer gives reasonable proof of inability to pay. Discontinuance shall be prohibited for a period of up to two months when a customer submits a physician's statement, in writing, to the utility as to existence of the emergency, its nature and probable duration, and that termination of service will aggravate the medical emergency. Recertification by the physician as to a continuance of the medical emergency shall be submitted to the utility after 30 days. However, at the end of such period of emergency, the customer shall still remain liable for payment of service(s) rendered, subject to the provisions of N.J.A.C. 14:3-7.13. During the period of medical emergency, the customer shall pay telephone tolls which are in excess of the average bills of the six months preceding the first 30-day period.

1. The Board may extend the 60-day period for good cause. Such an extension shall be requested in writing by the customer and be accompanied by a current physician's note. Pending the Board's consideration and decision, utility service shall not be discontinued.

2. Public utilities may in their discretion delay discontinuance of residential service for nonpayment prior to submission of the physician's statement required by this subsection when a medical emergency is known to exist.

Regulations Available Online

Regulations issued by the Board of Public Utilities are available from the New Jersey Office of Administrative Law (OAL) and LexisNexis. See the BPU Rules page for details.

The Board of Public Utilities readopted the rules governing all utilities on May 19, 2008. See the Final Readoption with Amendments , available at the BPU's website. These rules have an expiration date of May 19, 2013.

Non Investor-Owned Electric Utilities

As has been indicated in the Introduction, not all utility companies fall under the jurisdiction of the Board of Public Utilities. There are several other entities owned by local municipalities or run as a coop. Probably the two largest ones are Vineland Municipal Utilities and Sussex Rural Electric Cooperative.

Sources of Assistance

In circumstances where a customer falls behind in their bill, there are a number of governmental and private programs that may be helpful. The available assistance programs include:

There are other programs that can also contribute to long-term solutions by addressing energy consumption and usage reduction. These programs include:

Copyright © 2021 by Michael R. Swayze

Updated: January 1, 2020