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Analyst: affordable bills — not deferred payment plans — reduce arrears; Philadelphia’s TAP program offers model
Summary
An economist and utility-affordability consultant presented evidence from multiple U.S. programs that affordable‑bill programs (tiered assistance, TAP) substantially improve collections and arrearage resolution, while standard deferred payment plans often default at high rates and can raise monthly bills to unaffordable levels.
Roger Colton, an attorney‑economist who works on low‑income utility policy, presented comparative evidence that programs delivering affordable monthly bills produce greater arrearage reductions and faster collections than traditional deferred payment arrangements.
Colton described results from Philadelphia’s tiered assistance program (TAP) showing markedly faster arrears reduction and higher bill‑payment coverage ratios for participants: TAP participants reached roughly 72.5% of billed collections within one year, a pace that previously required several years in the system before TAP’s introduction. He said similar evaluations in Pennsylvania, New Jersey and Colorado showed comparable improvements when eligible customers received affordable, income‑adjusted bills.
By contrast, Colton argued deferred payment arrangements (DPAs) and conventional installment plans often fail because they add large monthly installments to already unaffordable bills. He cited Commonwealth Edison data showing that adding a DPA can increase a customer's monthly charge by 40–100% depending on the plan term and class, and that default ratios for DPAs have risen — in one example ComEd faced roughly 3.5 defaulted payment plans for every new payment plan recorded.
Policy takeaway: Colton urged policymakers to prioritize affordability-first approaches (income- or tier‑based bill adjustments and TAP‑style models) rather than relying primarily on DPAs, which he said routinely default and can exacerbate household unaffordability.
Ending: He recommended regulators track program-specific outcomes (collections, completion, reconnection rates) and favor affordable billing solutions that evidence shows accelerate repayment and reduce long-run write-offs.
