Digital Power Meters Mean Faster Utility Cut-Offs

Has your local power company installed a digital meter at your house?  Information sheets in your bills will suggest that this new digital meter will improve the accuracy of power measurement but this is only part of the story.

Digital meters allow power and gas companies to turn off your services from the central office.  Rather than sending out a technician to lock the meter, a central office cut-off can be performed with the flip of a switch in the office.  Digital meters also allow power companies to reduce the flow of power to delinquent customers – perhaps to provide enough power to keep a refrigerator on, but not enough for television or an air conditioner.

Today’s Wall Street Journal reports that utility companies are becoming much more aggressive in fighting delinquencies.  Even public corporations like the Tennessee Valley Authority have to report to bondholders and delinquencies can negatively impact both profitability and a bond’s rating with Moody’s or Standards and Poors.

The Bankruptcy Code does allow utilities to demand some form of “adequate protection”  in the form of security deposits if a customer files bankruptcy and includes a delinquent utility bill.   To date, we have not seen utilities take an aggressive stance with this, but the TVA and its distributors may be changing their policies.  For now, we are advising our clients in Knoxville, Nashville and Chattanooga to make every effort to bring their utility bills current prior to filing, thereby avoiding a potential issue getting utility service going forward.