Peco agrees to pay $225,000 fine after software glitches in 2018 and 2019

Like many cascading failures, it all started with a software glitch. It ended up with Peco Energy facing $225,000 in penalties for improperly terminating service for nearly 50,000 electric customers and the utility company being forced to refund about $1 million in reconnection fees.

The Pennsylvania Public Utility Commission (PUC) on Thursday approved a proposed settlement with the Philadelphia utility to resolve violations stemming from the company’s 2018 installation of new automated phone-dialing software. If the agreement is finalized after public comment, the company would pay a fine of $150,000 and to contribute $75,000 to its Matching Energy Assistance Fund.

Due to a coding glitch in the phone-dialing software, a large number of customers did not receive a phone call at least 72 hours before their service was shut off in 2018 for nonpayment, as the law requires. Peco reported the problem at the time to the PUC, power was restored to most customers within three days, and the issue was believed to have been resolved.

But a second problem with the dialer software emerged in 2019 when Peco discovered the system incorrectly listed some customers’ current bill due date as the termination date.

» READ MORE: Peco improperly shut off nearly 50,000 customers because of computer glitches

Thursday’s settlement, approved by 3-0 vote, initially came before the PUC in May 2021, when the commission approved a settlement that called for $75,000 in penalties, about one-third the amount agreed to on Thursday.

But new information came to light.

After the 2021 settlement was approved, Peco determined it had “erroneously charged reconnection fees” to some customers who had been shut off without proper notice. So Peco issued refunds of the $20 reconnection fee, plus $5 in interest, a total of $1.2 million.

But Peco was unable to refund about $321,000 in reconnection fees because the customers were no longer receiving Peco service. Under the settlement, Peco will contribute the orphaned $321,000 in refund money to the Matching Energy Assistance Fund, which provides grants to about 750 customers a year who face service termination.

In a statement Friday, Peco said it “proactively” identified that the initial settlement did not account for reconnection fees for those customers who were impacted and sought to revise the settlement to “make those customers whole.”

The commission’s vote on Thursday will become final after a period of public comment. Peco also agreed to report quarterly audits of its customer notification efforts to the PUC.

The company also terminated its relationship with the software vendor, which it declined to identify.