Individual versus Monopoly – A Modern Tale

December 9, 2010 at 3:03 pm 1 comment

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.


Entry filed under: Consumer.

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1 Comment Add your own

  • 1. Pio  |  August 26, 2012 at 12:45 am

    I have a similar experience with Southern California Edison.

    On June 04, 2012 I applied online for electricity service at Southern California Edison in preparation for my family’s relocation to Temecula, Riverside County. The social security number was listed as optional hence I did not provide it. At the completion of application I received an email informing me to pay a security deposit of $ 235.00 as SCE was not able to run a credit report on me because I did not provide my social security number.

    Learning that I was led into a situation requiring a security deposit which would have been unnecessary as I have an excellent credit history, I informed SCE to cancel my application and I would reprocess an application.

    Other ways to have this security deposit waived aside from providing the social security number are by: 1) enrolling in direct payment, 2) providing a guarantor, 3) providing a letter of credit from previous energy utility indicating positive credit history. In the reprocessed application I provided my social security number so SCE can be assured that I am a financially responsible customer with unblemished credit history.

    When I received a letter informing me of the security deposit requirement, I ignored it as I have: 1) cancelled that application, 2) reprocessed an application, 3) provided my social security number on the reprocessed application;

    But on June 25, 2012 I received a disconnection notice from SCE notifying me to pay aforesaid security deposit before 5:00 P.M. on June 28, 2012 or else my service will be disconnected.

    Even if on the foregoing facts on paragraph four would have sufficed, out of apprehension of a disruption of service I sent to SCE option three from San Diego Gas & Electric indicating my excellent credit history on June 26, 2012 through a certified express mail with a delivery date of June 27, 2012 by the United States Postal Service.

    So my family went through our normal lives until on July 02, 2012 – four days after SCE received the security deposit optional requirement – SCE cut the service to our house.

    I called SCE to inquire and I was told that the letter of credit is not yet received – four full business days after. Even my claim that I have proof of delivery and was signed by somebody from Southern California Edison on June 27, 2012 more than a day before the 5:00 P.M. deadline on June 28, 2012, Southern California Edison insisted that they have not received the letter of credit!

    Feeling helpless and abandoned by the government for allowing monopoly and thereby big business greed I wrote a letter to the President of Southern California Edison. The following is an excerpt of the letter

    “This is now the fourth day that we do not have electricity in our home – spoiling 4th of July – and everyone in the family is mentally anguished, stressed, humiliated and felt shamed in our neighborhood. We were not able to have our meals properly and our daily chores are thrown off and I am at work right now without having taken my breakfast.

    In seeking all remedies available to me I am thus writing you this letter, first, in the hope that your good office could act judiciously and expeditiously in restoring our electricity service immediately and the bad record stricken out history.”

    And after seven days being thrown back to the Stone Age, Southern California Edison gave me a call informing me that my electric service is to be restored while it searches for the missing letter of credit – which it did an I was told that the security deposit has been waived.

    So my family went through our normal lives again until on Aug 23, 2012 – after the first two billing cycles – SCE informed me to pay a security deposit and this time the reason(s) cited for this request verbatim is “A deposit is required to re-establish credit because payment(s) has been received after the past due notice(s) has expired and/or you have paid with returned checks.”

    Except for the current one, I have had only two previous bills. The first was due on July 09, 2012 which I paid on June 29 and paid for by my bank on July 02, 2012 – seven days before the due date – per my bank account record of transaction as transacted by Southern California Edison.

    The second bill was due on Aug 07, 2012 which I paid on July 27, 2012 and paid for by my bank on August 01, 2012 – seven days before the due date – per my bank account record of transaction as transacted by Southern California Edison.

    So the claim that “A deposit is required to re-establish credit because payment(s) has been received after the past due notice(s) has expired and/or you have paid with returned checks.” can be, what lawyers call, misrepresentation.

    But again, we feel helpless, where should we go? To the lawyers? Do they exist?


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