AB 1945: Municipal utility districts: prepay option: termination of service.

12823.1.

(a) A district furnishing light, heat, water, or power shall not terminate residential service on account of nonpayment of a delinquent account unless the district first gives notice of the delinquency and impending termination, at least 10 days before the proposed termination, by means of a notice mailed, postage prepaid, to the customer to whom the service is billed not earlier than 19 days from the date of mailing the district’s bill for services, and the 10-day period shall not commence until 5 days after the mailing of the notice.

(b) Every district shall make a reasonable attempt to contact an adult person residing at the premises of the customer by telephone or personal contact, at least 24 hours before any termination of service, except that, whenever telephone or personal contact cannot be accomplished, the district shall give, by mail, in person, or by posting in a conspicuous location at the premises, a notice of termination of service, at least 48 hours prior to termination.

(c) Every district shall make available to its residential customers who are 65 years of age or older, or who are dependent adults as defined in Section 15610.23 of the Welfare and Institutions Code, a third-party notification service, whereby the district will attempt to notify a person designated by the customer to receive notification when the customer’s account is past due and subject to termination. The notification shall include information on what is required to prevent termination of service. The residential customer shall make a request for third-party notification on a form provided by the district, and shall include the written consent of the designated third party. The third-party notification does not obligate the third party to pay the overdue charges, nor shall it prevent or delay termination of service.

(d) (1) Every notice of termination of service pursuant to subdivision (a) shall include all of the following information:

(A) The name and address of the customer whose account is delinquent.

(B) The amount of the delinquency.

(C) The date by which payment or arrangements for payment is required to avoid termination.

(D) The procedure by which the customer may initiate a complaint or request an investigation concerning service or charges, except that, if the bill for service contains a description of that procedure, the notice pursuant to subdivision (a) is not required to contain that information.

(E) The procedure by which the customer may request amortization of the unpaid charges.

(F) The procedure for the customer to obtain information on the availability of financial assistance, including private, local, state, or federal sources, if applicable.

(G) The telephone number of a representative of the district who can provide additional information or institute arrangements for payment.

(2) Every notice of termination of service pursuant to subdivision (b) shall include the items of information specified in paragraph (1).

(3) All written notices shall be in a clear and legible format.

(e) If a residential customer fails to comply with an amortization agreement, the district shall not terminate service without giving notice to the customer at least 48 hours before termination of the conditions the customer is required to meet to avoid termination, but the notice does not entitle the customer to further investigation by the district.

(f) A termination of service shall not be effected without compliance with this section. Any service wrongfully terminated shall be restored without charge for the restoration of service, and a notation of the restoration shall be mailed to the customer at the customer’s billing address.

(g) A district may offer customers the option of receiving notices required by this section, except for notices pursuant to subdivision (b), solely by email, text message, app-based notification, or other electronic method as specified by the customer.

(h) This section does not apply to a customer participating in a prepay program pursuant to Section 12823.2.

12823.2.

(a) A district furnishing electrical service to fewer than 100,000 customers may offer residential customers a prepay option for electrical service if all of the following conditions are met:

(1) (A) For a customer that is a new residential applicant applying for electrical service on or after January 1, 2027, the customer has paid the deposit under a decision of a district described in Section 12822.6.

(B) A customer that has a current deposit held by the district shall be eligible to participate in the prepay option.

(2) The customer affirmatively opts into the district-approved prepay option with informed written consent.

(3) The district provides the customer with all information related to the mechanisms and policies to return to standard billing and provides information on any differences in consumer protection rules between the prepay option and standard billing.

(4) The district provides access to usage and account balance information.

(5) The district issues automated low-balance alerts to the customer before service suspension at least 10 days before the forecasted service suspension and again 24 hours before the forecasted service suspension, based on the district’s best estimates of the customer’s electrical service usage.

(6) The customer retains the right to exit the prepay option and return to standard billing pursuant to a policy adopted by the board.

(7) (A) Before converting a customer whose account is in arrears to a prepay option, the district shall offer the customer the opportunity to participate in an arrearage payment plan. A customer who elects to participate in and complies with the arrearage payment plan shall not be converted to prepay service while the customer remains in compliance with the plan, except as specified in subparagraph (B).

(B) Notwithstanding subparagraph (A), a customer that is participating in, and in compliance with, an arrearage payment plan may elect to convert to prepay service only if their deposit is equal to, or greater than, the amount of the delinquency. Upon conversion to prepay service, the district shall apply the customer’s deposit to the amount of their delinquency and any remainder of the deposit shall be applied as a credit to the customer’s account.

(8) The prepay option requires the district to refund to the customer any unexpended balance from the customer’s account within 10 business days after the customer has terminated electrical service and the district has withdrawn payment for the customer’s final bill.

(9) (A) The district deposits into a separate fund all revenue collected from customers that have opted into the prepay option.

(B) Except as provided in paragraph (8), any amounts that have been deposited into the separate fund that are associated with electrical service that has not been provided shall not be transferred or expended from the separate fund.

(10) The district adopts a policy to minimize service disruptions to customers who elect to participate in the prepay option and who are 65 years of age or older, customers who are medically vulnerable, and customers who are dependent adults, as defined in Section 15610.23 of the Welfare and Institutions Code.

(b) Section 12823.1 does not apply to the termination of electrical service for nonpayment of a delinquent account for a customer participating in a prepay option pursuant to subdivision (a).

(c) For purposes of this section, “prepay option” means a payment option offered by a district to its customers pursuant to subdivision (a) that enables the customers to make a payment for a specified amount of electrical service before that service is rendered.