Credit Policy Changes

Last week the MLGW Board of Commissioners approved revisions to our customer care policy (previously referred to as the MLGW credit policy). The revisions will provide more flexible policies for customers. With energy costs rising and the economy experiencing a downturn, MLGW is implementing these changes to assist as many customers as possible while still maintaining sound business practices. The revised customer care policy will be effective January 1, 2009, with the exception of language changes to the annual moratorium that will become effective December 1, 2008.

Highlights include:

Deposits
The maximum deposit amount of $500 has been reduced to a maximum amount of $225, with a minimum of $125. Also, new customers can pay their deposits over a five-month period in increments of $25 instead of being billed the entire amount the first month.

Definition of Good Pay Customers
MLGW is changing the definitions of “good pay” and "credit risk" customers, resulting in more flexibility with the “good pay” designation. A-rated or “good pay” customers are not required to a have a deposit and they have a higher minimum balance threshold. For B-rated or “credit risk” customers, missed payment arrangements and poor payment history are removed from the criteria defining those customers. Therefore, an additional 50,000 to 70,000 customers will move into the “good pay” category.

SmartPay
Because credit history will no longer affect a customer’s eligibility to enter Smart Pay, MLGW’s leveled billing program, more customers can participate and will be better able to manage budget fluctuations in their utility bills each month.

Discount Allowance
MLGW’s Discount Allowance, formerly known as the K-discount, allows a customer to earn a Discount Allowance after six consecutive months of not incurring a late fee. The Discount Allowance will be automatically applied on the first late payment assessed. A customer may accrue no more than three Discount Allowances.

No Water Cut-Offs
MLGW will administer a “No Cut Water Program” for all residential customers subject to a delinquent service disconnect. Under this program, residential water services are left on when gas and electric services are disconnected for non-payment. Residential customers’ water services will remain on for a minimum period of 60 days after the other metered services have been disconnected for nonpayment.

Deferred Payment Plan
Customers will now be allowed to enter into a payment arrangement while on a Deferred Payment Plan.

Hardship Criteria
The new policy increases the number of days for hardship criteria from 30 to 45.

Conservation
In addition to altering credit policies, MLGW is strongly encouraging customers to conserve energy this winter. This includes information in bill inserts, brochures, news stories, advertisements, and MLGW participation in public events such as Community Conservation Day, which was held on October 10.

MLGW will soon begin an advertising campaign that features PSAs on TV, radio and print, as well as billboards, to help customers save energy. Tips are also available online at www.mlgw.com, and programs such as EnergySmart Memphis and the Energy Doctor can further assist customers in using energy efficiently.