SERVICE CHARGES

Poverty Bay Herald, Volume LXIII, Issue 18975, 27 March 1936, Page 4

SERVICE CHARGES

DISCOUNT TO BALANCE POST - DEPRESSION EFFECTS POWER BOARD SUGGESTION While many business concerns continue to attribute the slow collection of accounts to the lingering effects of the depression, the. manager of the Poverty Bay Electric Power Board, Mr. V.' E. Sanders, has made the interesting discovery that coincident with the late improvement in economic conditions in the Dominion there has developed a great increase in the number of electrical .consumers who neglect to pay their accounts on the due dates. In a report submitted to the Power Board at its monthly meeting to-day/ Mr. Sanders noted this interesting development, and referred to it as a circumstance making necessary some form of penalty on those who do not pay their accounts promptly. His suggestion was that the board .should institute a service charge of 2s per month on all accounts, to be balanced, in the event, of prompt payment by a discount of an equal amount. Commenting on the proposal, Mr. Sanders stated: —

"Members will recall the old system of a percentage penalty for late payment, which in IfK'.O was replaced by the system of disconnection for non-payment by due date. This at present is_ being administered on :t basis that provides for a collection fee being charged if it. is found necessary to send out an officer to obtain payment.

"The .system has worked extremely well right through the years of depression, but, .strangely enough, since the latter part of last year a most amazing increase has occurred in the number of defaulting consumers. This increase seems to coincide with the general improvement in economic, conditions, but, whatever the cause, the need for prompt: payment of electricity accounts is neing increasingly and seriously ignored. WEAKNESS IN PROCEDURE "I do not: for a moment admit the failure of the principle of a uniform against. the previous percentage penalty, but I do claim that a definite weakness in procedure is disclosed in l:ho experience of the past few months. ','lt i.s a peculiar feature that where consumers fail to pay accounts up to time and the penalty is imposed, there is invariably a .strong resistance to payment of the added charge. "Consumers protest, against, the regulation on various grounds, most of which afford very weak .justification for what i.s in most cases pure forgetfulne.ss or neglect. One of the most common examples of resistance takes the form of a plea that the particular consumer concerned has used electricity for so many years that he should not bo subject; to the normal regulations. "Another example is the consumer who admits that such regulations are necessary, but that they should not apply to him.

"Both cases illustrate an outlook which claims individual exemption from a regulation devised for the benefit of the majority of consumers who make prompt payment. 'After .studying the position carefully, I am convinced that the weakness of the system lies in adding the late payment charge to the account after default is made. "The new system recommended assumes that every customer is liable to forget an account at some time or another and offers a tangible inducement to make prompt payment, the inducement being a special discount of 2s per month. "This, I believe, is the correct solution of the difficulties being experienced and, if introduced at. the same time as the substantial tariff reductions recommended, should prove satisfactory to all concerned. ' DISCUSSION BY BOARD

In the course of the discussion, the chairman, Mr. F. ft.. Ball, stated in reply to Mr. J. Tombleson that it was not considered that the charge should be more than 2s. There were large accounts on which a penalty of 5s would not be unreasonable for late payment, but it would not be fair to put a penalty of more than 2s on the smaller accounts. Mr. M. T. Trafford stated that he had had a complaint from a consumer who had had to pay 5s for reconnection of his service, and considered the charge iniquitous.

The manager said that no disconnections had been made without the fullest consideration of individual circumstances.

The fact that consumers' accounts were due when rendered, and that 14 days' grace was accepted by consumers almost as a rule, was mentioned by Mr. C. W. Izod, who stated that people who neglected to pay accounts within the period of grace could not complain that they were unfairly treated. The proposal was adopted.