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HEA institutes new fees to reduce late payments

Posted: August 7, 2013 - 1:51pm

Homer Electric Association is instituting new fees designed to reduce the number of late and declined payments received. The new fees will not affect any HEA members who are paying their energy bill on time or those who have special arrangements. 

Under the new structure, which goes into effect Sept. 1, a late fee will be charged on account balances that are past due. The account becomes past due 25 days from the date of the billing; however, there is a five-day grace period between monthly billings before the fee is applied. 

The late fee will be 0.875 percent of the overdue monthly amount or a minimum of $2, whichever is greater. For example, if the past due account balance is $300, the late charge fee will be $2.62. If the past due account balance is less than $230, the late fee would be the $2 minimum, HEA said in a press release. 

“Each past due account balance costs the cooperative between $12 and $15 to handle. With an average of over 5,000 past due accounts on the books each month, the financial impact is significant,” the electric cooperative said in the release.

Until now, HEA was the only electric utility in Southcentral Alaska that did not have a late fee in place. 

In addition to the late fee charge, HEA also is re-working its non-sufficient funds, or Dishonored Check Charge. The new name for this transaction is the Declined Payment Fee and will increase from $7.50 to $25 per denied payment. 

The Declined Payment Fee also will be charged for denials of any form of electronic payments, debit cards or credit cards. The exception to this fee is when the payment is made in person or over the phone and is immediately declined. 

“A review of our internal costs found that we were not collecting these special handling expenses from those who had the problem, but instead were spreading these costs over our entire membership. This change is the right thing to do,” said Sandra Ghormley, HEA manager of member relations. 

The new fees were approved by the Regulatory Commission of Alaska and will go into effect for all billings as of Sept. 1.

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