Eliminating Transaction Fees on Water Utility Bill Payments

Slide Note

Assembly Bill 1180 aims to eliminate transaction fees on water utility bill payments made through credit and debit cards. The bill allows participating water utilities to waive these fees during their General Rate Case cycle, collecting information on payment methods, costs, customer utilization, expectations, and satisfaction. The pilot program under PU Code 755.5 involves three chosen utilities that must notify customers of the temporary nature of the fee waiver. Participating companies like California American Water, Golden State Water, and Great Oaks Water are charging varying fees under this program. Additionally, PU Code 915 requires collaboration to assess the impact of credit card usage on low-income customers, household debt burden, customer preferences, and the cost-effectiveness of payment options. Challenges in data collection include billing data challenges, disconnection length, possible double-counting of customers, household burden, credit card fee variations, and limited data for cost-effectiveness analysis.

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Assembly Bill 1180 Eliminating Transaction Fees on Water Utility Bill Payments by Credit and Debit Cards LIOB Presentation Water Division March 6, 2020

2 AB 1180 Summary Public Utilities (PU) Code 755 (2005) allowed energy, telecommunications, and water utilities to charge a transaction fee to recover costs for customers paying with credit or debit cards. 9 water utilities offer payments through credit cards 2 water utilities waived transaction fees California Water Service Company Suburban Water Systems Assembly Bill 1180 passed in 2016 created PU Code 755.5 and 915 which offered Class A water utilities the opportunity to analyze whether transaction fees should be removed in their General Rate Case (GRC).

3 PU Code 755.5 Legislation Summary for Utilities The pilot program lasts the length of the GRC and participating water utilities are required to: Waive transaction fees for customers paying by credit card, debit card, and prepaid card Collect information on the various forms of payment Costs effectiveness of payment options Customer utilization Customer expectations and satisfaction Notify customers of temporary nature of pilot program Limited to duration of rate case cycle 3 utilities were chosen to operate the pilot program

4 Utilities Participating in Pilot Program California American Water Company (2018-2020) Charges Card and E-check Fee of $1.95 Golden State Water Company (2019-2021) Charges $1.45 Great Oaks Water Company (2019-2021) Charges Card and Bank Fee $1.95 for Interactive Voice Response system $2.95 for Customer Service Representative

5 PU Code 915 Reporting to Legislation Commission and LIOB collaborate to assess the following items: Credit cards to avoid service disconnections by low-income customers Impact using a credit card to pay water bills on household debt burden Customer bill payment preferences Cost-effectiveness of various payment options Levying a transaction fee on customers paying by credit, debit, or prepaid card serves customers interests.

6 Data Request Challenges Billing Data Either fully paid or not paid SB 998 increased disconnection length Possible double counting of customers Household Burden Different types of credit card fees Not Enough Data Most utilities have less than a year s worth of data to see the impact for waiving the transaction fees Cost-effectiveness on Different Payment Options In-person or by mail costs estimates

7 Data Requests Monthly bill payments with transaction fees vs other (indication of low income for each category) Total customers Credit Card Other payments with transaction fees All other payments Additional requests for costs analysis for different payment options