IN – Encouraging Legislature

This is from Indiana and doesn’t apply to us, but it is nice to see a smart legislature at work.

Municipal utilities will no longer be allowed to make landlords pay when tenants default on their bills
June 18, 2020  | 
By Isaac Gleitz
TheStatehouseFile.com


INDIANAPOLIS—A new law that lets landlords off the hook for their tenants’ unpaid utility bills has the operators of municipal utilities across Indiana concerned that the costs will shift to taxpayers.

House Enrolled Act 1165 takes effect July 1 and prohibits the state’s gas, electric and water utilities that are owned by local communities from holding landlords responsible when their tenants fail to pay their bills.


“This bill allows landlords to enjoy the benefits of services provided to their properties without having to share in any of the risk,” said Lindsey Moss of AIM, an organization representing town and communities across Indiana.

She said her organization opposed the legislation because members believes it’s safer for cities and towns to charge the owner of a property than a tenant, as they rely on landlords to help recoup loss from missed payments. “We argued that by owning a property, it was fair to hold landlords accountable,” Moss said.

The author of the bill, Rep. Woody Burton, R-Greenwood, disagreed, saying said that utility practices are unfair to landlords. When landlords want to evict a tenant, they have to go through a court process, which can take 60 days, and during that time the property owners were compelled to utility bills if the tenant didn’t.

Rep. Woody Burton, R-Greenwood, authored the legislation that prohibits municipal utilities from holding landlords accountable for tenants’ utility bills. Photo by Victoria Ratliff, TheStatehouseFile.com  “All the way around it wasn’t fair,” Burton said.
Burton said that about a dozen noncooperative municipal utility groups in the state have also put landowners in a difficult position, citing Bargersville in Johnson County as an example.

Bargersville Power and Light serves an area that’s bigger than the town’s voting district, which means many customers, including landlords, were at the mercy of local government officials for whom they did not have the chance to vote, he said.

Most municipal utilities are regulated by town councils and boards, unlike corporate utilities such as IPL and Duke, which are governed by the Indiana Utility Regulatory Commission, Burton said. He added that he heard from a number of unhappy local utility operators whose operators felt like their autonomy was being threatened.
“As complicated as it got, it really is pretty simple—fairness to everybody: the landlords, the tenants, and the utilities,” Burton said of the bill which passed the House of Representatives by a 61-34 vote margin.

Moss said the new law will force some municipalities to alter their policies because most currently have landlords and tenants co-sign for fiscal responsibility, while others already hold the tenant liable, she explained.

“We really felt that it was really… a local matter, best handled by the local utility, as it was appropriate for their community,” said Carolyn Wright , vice president of government relations for the Indiana Municipal Power Agency, of why her organization opposed the legislation. The power agency is a wholesale electric provider for 60 Indiana municipal utilities.

Wright said the local impact will be compounded by the order issued by Gov. Eric Holcomb in March blocking utilities from disconnecting customers during the COVID-19 pandemic. The moratorium is scheduled to expire at the end of June.
Wright said her agency is currently gathering information from its utility groups to see how the current obligation to provide service is affecting them.

But Moss said communities have already begun to see higher rates of delinquencies and now the concern is whether some who are skipping payments now can overcome their debt when the mandate is lifted, she said.

At Frankfort Municipal Utilities the list of missed payments is longer than usual, said Todd Corrie, the utility’s general manager. “People owe us a lot of money,” Corrie said. “People know now that they cannot be shut off, so they’re not paying their bills.” He continued, “It’s going to be brutal for some people because they’re going to owe us hundreds and hundreds of dollars.”

While the impact of the virus is their main concern, Corrie said there has been trouble with the tenant-landlord relationship for a long time, saying he has felt it would be best for the utility to get its payments directly from tenants because sometimes landlords collect the money but don’t pay.

Collecting payments has been less of a concern at the City of Jasper Utilities so he doesn’t see the bill as a threat, said General Manager Bud Hauersperger, adding,  “We are very lucky in Jasper that we have very few default. Our lost revenue is very small.”
Isaac Gleitz is a reporter with TheStatehouseFile.com, a news website powered by Franklin College journalism students.

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