Individual versus Monopoly – A Modern Tale

I had an interesting experience upon my move to southern California from the northeast.  As I established utility service with Southern California Edison (SCE), the boundary between the ordinary consumer and a monopoly became apparent.  This all started when SCE requested a $150 deposit.  As I later learned, government seemed to be an enabler to the monopoly.

In advance of my move to southern California I needed to establish some basic services.  I logged on to the Southern California Edison (SCE) web site and turned on service at my new address.  Everything went smoothly to that point.

After a week in my new apartment, I received a letter from SCE.  They wanted payment of a deposit.  I found this somewhat amusing.  I had never been asked to pay a deposit for a utility before.

The principal was the issue for me – not the money.  What if I could not afford the deposit?  Would they deny electricity?  What really bugged me is that there were no options.  There are no other electricity providers here.  If I didn’t like the terms at which I was being offered electricity there was no fallback position.

I called and lodged a complaint with SCE.  The initial customer service reps really just reiterated the policy.  They did offer to split the deposit over three months.  Again, it was the principal – not the money.  Would one be denied electricity if they couldn’t afford $50/mo.

Interestingly, there was a second option.  If I permitted direct withdrawl from my checking account, SCE would wave the deposit.  I found this amusing too.  Now the monopoly wants direct access to my hard earned money.

In any case, I worked my way up the chain of command.  SCE appears to train their managers well.  They largely will listen and not say anything.  I suppose that is a perfect strategy for a litigious society.

I also called the California Public Utilities Commission’s Consumer Affairs Branch. I did learn that utilities companies are able, by law, to charge a deposit.   I wanted to pursue this further and never received a call back from the appropriate people there.  Overall, the agency seems to be rather ineffective.  I wonder who in California is actually advocating for consumers.  I have never heard of a utility asking for a deposit before and it seems like a silly policy to permit.

A second issue for me was paying for services in advance.  In essence, SCE uses the deposit as advance payment for services the consumer may default in paying.  Other than lawyers – who call their advances “retainers” – I know of no other businesses where consumers pay in advance.  The thought that a monopoly could get away with such a practice and that government would actually permit such a practice – particularly for a basic service like electricity – just enraged me.

The end of the story is that I remained persistent.  I didn’t want to pay the deposit.  I did not agree to direct withdrawl for payment.  I did not want the payments broken down over several months.  Eventually SCE conceded, probably just to rid themselves of a pain-in-the-neck.  Now if only all new customers would complain, maybe the policy would be dropped.