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Charging Kwhs and BTUs on Credit

Fortnightly Magazine - September 15 1998

do that. The credit option was in lieu of the electronic draft option. I suspect there will be a decline in the use of credit cards because of that. But there are still are a lot of people who use credit cards for frequent flier miles and get a vacation each year."

Raley says in the utility's agreement with its processing bank, fees run about 1.8 percent, with an additional "capture fee" of 16 cents per item. Other fees are minimal, including a $17 per month fee rental for a computer terminal and printer.

Michael J. Spall, a spokesman for Con Edison Company of New York Inc., says the utility accepts debit payments over the Internet and by phone via a checking account - $9 million total in May - but doesn't take credit card payments from its 3 million customers.

"New York State is one of these states that does not allow the cost of using a credit card to be passed on to the consumer," he says. "It's a state law¼ So the reason, even though we'd like to consider using credit cards to pay electric bills¼ is if we had to take those costs as a regulated utility, we'd have to pass them on to all our customers and that would not be fair."

If the law changed, Con Ed could consider charging the customer a fee to use a credit card, he says.

Jessica Brown, spokeswoman for Baltimore Gas & Electric, reiterates the point, from the perspective of her 1.5-million-customer utility.

"The reason we don't do it is because we would have to charge a service fee and then we'd have to go to the public service commission and say, Look, we're allowing people to use credit cards and we're having to pay a service fee,'" she says. "We need a rate increase because we have to cover those costs.' And that's, I think, our rationale."

Florida Power Corp. sits on the fence when it comes to credit card payments. It accepts payment by credit card, but doesn't promote or advertise the option, says Angela Fields-McKiver, the company's principal customer service strategist. Why? "We would prefer they choose an efficient or cheaper method, rather than using a more expensive method," Fields-McKiver says. Those methods include check-by-mail or payment at automated kiosks.

Duke Power Co. shares this philosophy.

"We, in the past, have not on a wholesale manner published or promoted credit cards due to the fact that Duke currently picks up that discount fee," says Robert M. Hall, general manager of credit and collections. "If a customer is insistent or really requests to pay their monthly bill, we will take it within certain limitations."

The limitation is that the payment be $1,000 or less. Another instance where credit might be allowed is if a customer becomes delinquent in his payments.

"There is definitely a fee associated with accepting cards," says Holmes, of Visa. "And it is a percentage. It is typically below 2 percent. But that can be more expensive than other forms of payment like check or