Utility Cuts Grace Period in Half

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Lenoir City, Loudon County (WVLT) - You may now have less time to "pay-up" on past due bills.

Lenoir City Utilities Board had been allowing its "slow pay" customers up to 190 days to pay up before being disconnected.

That grace period has now been reduced by about half.

Volunteer TV’s Jim Freeman takes a look at LCUB's new policy.

LCUB has just revised its termination of service policy, and it narrows the window to pay before being disconnected to approximately 45 to 60 days.

For the average small business, waiting up to six months for payment could be devastating.

"For a business our size, we couldn't handle 180 days out. I know LCUB is much bigger and takes in a lot more revenue than we do when you've got people that far delinquent,” says Rodney Grugin, manager at Meadowview Greenhouse and Garden Center.

Lenoir City Utilities Board is tightening the days in its grace period for its nearly 60,000 electric customers. And it's a two-fold issue for LCUB.

"Number one, we believe it's unfair to our existing customers to allow utility bills to go unpaid. Secondly, we believe it's unfair and really unjust to allow a customer to continue to be in charge and essentially have their utilities disconnected,” says LCUB assistant general manager Shannon Littleton.

The revision will change the 120 to 190 days of continued utilities after non-payment to approximately 45 to 60 days before LCUB would pull its services.

"But what we will also look at is when someone's in a bad situation, we'll not turn a deaf ear to those folks either,” Littleton says.

LCUB's policies are now aligned closely to what KUB does for its almost half-a-million customers.

"So that puts it around 45 days to 48 days. If you haven't paid your bill, you're subject to disconnection for non-payment,” explains KUB’s customer service manager Dale Maddox says.

First Utility District turns off about 50 customers a week for non-payment, and it usually brings a quick response.

"Unless the customer has moved away, generally they're in that next day to pay the bill and have the water turned back on,” says Wayne Watson, general manager for First Utility District of Knox County.

Because even the local utilities have bills to pay.

"If customers don't pay their bills, it affects all the rate payers, and we try to keep our rates as low as possible,” Maddox says.

LCUB's revised policy also holds true for businesses.

And that includes all LCUB services including water, gas and electric.

Aside from helping improve the utilities' cash flow, the shorter grace period may drop the amount a "past due paying customer" owes by up to two-thirds.