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DPUsets new limits to rates of interest on overdue bills
By JEFFREY KRA.SNER
Commercial customer! with overdue accounts at local utilities will *ee their total bills {TOW more slowly thanks to the effort* of the owner of a Roxbury apartment complex who has had a long battle with Boston Edison.
The Department of Public Utilities this week instituted new limits on the rate of interest gas, electric and phone companies can charge to their past due commercial accounts.
Instead of a Hat 18 percent Interest. the utilities' maximum interest will be aet at the two-year Treasury bill rate plus 10 percent The new rate, which roes into effect Nov. 1. wUl drop to 14.05 percent.
The DPU's order comes in response to a request from Alphonse Mourad. owner of the Mandela Apartments in Roxbury. For year*. Mourad has waged an angry battle against Boston Edison, alleging that the utility has overcharged the complex and generated excessive and inaccurate bills. He claimed that he had overpaid his bills by (29.000, but that Edison refused to disclose its accounting records.
In Its order, the three DPU commissioners argued that late payment interest charges should remain relatively high.
"While It is one of the Department's goals to make late payment charges more reflective of current Interest rates, It is also important to ensure that late payment charges remain high enough to deter delinquent payment of accounts."
They rejected a proposal to let rates float at 8 percentage points over the two-year Treasury bill. and instead adopted a 10 percent premium, to be computed Feb. 1 of each year.
The order does not affect overdue accounts for residential customers, on which utilities are prohibited from charging interest.
But the commissioners warned utilities against harassing.customers, saying it "expects companies to suspend late payment charges where a customer has a good faith and reasonably grounded dispute on billed amounts, and abate late *payment charges where the amount la dispute is determined to be erroneous.**

THE ATTORNEY GENERAL'S OFFICE TO REVERSE THE 20 YEAK OLD, UNFAIR BILLING PRACTICES OF CHARGING 18% INTEREST AND PYRAMIDING INTEREST AND LATE CHARGES, DESPITE THE CURRENT PRIME RATE OF ONLY 6%.
WHAT: A hearing between V&M Management and Boston Edison/ challenging Boston Edison's unfair practices of charging interest on interest and 18% in teres t on la te payments.
WHEN: February 10,1993 at 10:00 AM. (contact AlMourad (617)
WHERE: The Department of Public Utilities, Consumer Division Conference Room/ 12th Floor, Saltonstall Building, 100 Cambridge Street, Boston, MA.
After 11 months of legal battles, the Department of Public Utilities has finally allowed a hearing to take place on V&M Management's challenge to Boston Edison's unfair billing practices of:
1. charging 18% interest on late payments when the prime is 6%, the lowest in 20 years.
(While commercial banks are charging 3 to 4 points above prime, Boston Edison is charging 12 points above prime);
2. charging interest on interest, or "pyramiding" interest and late charges. (Seventy one percent (71%) of V&M's "arrearage" actually consists of of interest on interest); and
3. classifying affordable housing as a "commercial account" thereby Justifying a higher billing rate. (V&M Management owns 276 section eight affordable housing units and is being charged commercial rates which are substantially higher than residential rates. Affordable housing and its low-income tenants cannot survive such usurious billing practices).
In retaliation for V&M's challenge to interest rate policies, Boston Edison moved in the Suffolk Superior Court for a hearing on February 25th to put V&M Management into receivership to satisfy a Judgment which consists entirely of interest on interest, despite that V&M has paid 94.4% of all Boston Edison usage charges. The utility companies cannot be allowed to enforce these unethical billing practices which allow them to force property owners into foreclosure, receivership or bankruptcy.
The Attorney General's Office and the Department of Public Utilities have a moral obligation to protect consumers and business owners from losing their properties as a direct result of unfair utility billing practices (as the A.G, finally did with the 24% interest, second mortgage scam). Economic hard times are upon everyone and interest rates need to be fairly adjusted. While financial and government institutions have made such adjustments (see Internal Revenue Service adjustment below), the utility companies continue to milk business owners with the blessing of the Department of Public Utilities, which deddes utility billing policy.

Interest Rate Change
As a result of new legislation, the interest rate computed on underpayments and overpayments of Massachusetts taxes has changed. Previously, Massachusetts imposed a simple 18% interest rate on all such transactions. The new interest rate is based on current federal short-term interest rates p'us four percentage points, compounded

The new in;erest rate provisions apply to all interest accruing on or after January 1, 1993. interest accruing belore then is subject to the prior interest rate provisions.
DPU sets new limits to rates of interest on overdue bills By JEFFREY KRA.SNER - Boston Herals

Commercial customer! with overdue accounts at local utilities will *ee their total bills {TOW more slowly thanks to the effort* of the owner of a Roxbury apartment complex who has had a long battle with Boston Edison.

The Department of Public Utilities this week instituted new limits on the rate of interest gas, electric and phone companies can charge to their past due commercial accounts.
Instead of a Hat 18 percent Interest. the utilities' maximum interest will be aet at the two-year Treasury bill rate plus 10 percent. The new rate, which goes into effect Nov. 1. will drop to 14.05 percent.

The DPU's order comes in response to a request from Alphonse Mourad. owner of the Mandela Apartments in Roxbury. For years. Mourad has waged an angry battle against Boston Edison, alleging that the utility has overcharged the complex and generated excessive and inaccurate bills. He claimed that he had overpaid his bills by (29.000, but that Edison refused to disclose its accounting records.

In Its order, the three DPU commissioners argued that late payment interest charges should remain relatively high.
"While It is one of the Department's goals to make late payment charges more reflective of current Interest rates, It is also important to ensure that late payment charges remain high enough to deter delinquent payment of accounts."
They rejected a proposal to let rates float at 8 percentage points over the two-year Treasury bill. and instead adopted a 10 percent premium, to be computed Feb. 1 of each year.
The order does not affect overdue accounts for residential customers, on which utilities are prohibited from charging interest. But the commissioners warned utilities against harassing. customers, saying it "expects companies to suspend late payment charges where a customer has a good faith and reasonably grounded dispute on billed amounts, and abate late payment charges where the amount in dispute is determined to be erroneous.

THE ATTORNEY GENERAL'S OFFICE TO REVERSE THE 20 YEAK OLD, UNFAIR BILLING PRACTICES OF CHARGING 18% INTEREST AND PYRAMIDING INTEREST AND LATE CHARGES, DESPITE THE CURRENT PRIME RATE OF ONLY 6%.
WHAT:

A hearing between V&M Management and Boston Edison/ challenging Boston Edison's unfair practices of charging interest on interest and 18% interest on late payments.

WHEN: February 10,1993 at 10:00 AM.
WHERE: The Department of Public Utilities, Consumer Division Conference Room/ 12th Floor, Saltonstall Building, 100 Cambridge Street, Boston, MA.

After 11 months of legal battles, the Department of Public Utilities has finally allowed a hearing to take place on V&M Management's challenge to Boston Edison's unfair billing practices of:
1. charging 18% interest on late payments when the prime is 6%, the lowest in 20 years.
(While commercial banks are charging 3 to 4 points above prime, Boston Edison is charging 12 points above prime);
2. charging interest on interest, or "pyramiding" interest and late charges. (Seventy one percent (71%) of V&M's "arrearage" actually consists of interest on interest); and 3. classifying affordable housing as a "commercial account" thereby Justifying a higher billing rate. (V&M Management owns 276 section eight affordable housing units and is being charged commercial rates which are substantially higher than residential rates. Affordable housing and its low-income tenants cannot survive such usurious billing practices). In retaliation for V&M's challenge to interest rate policies, Boston Edison moved in the Suffolk Superior Court for a hearing on February 25th to put V&M Management into receivership to satisfy a Judgment which consists entirely of interest on interest, despite that V&M has paid 94.4% of all Boston Edison usage charges. The utility companies cannot be allowed to enforce these unethical billing practices which allow them to force property owners into foreclosure, receivership or bankruptcy.

The Attorney General's Office and the Department of Public Utilities have a moral obligation to protect consumers and business owners from losing their properties as a direct result of unfair utility billing practices (as the A.G, finally did with the 24% interest, second mortgage scam). Economic hard times are upon everyone and interest rates need to be fairly adjusted. While financial and government institutions have made such adjustments (see Internal Revenue Service adjustment below), the utility companies continue to milk business owners with the blessing of the Department of Public Utilities.

Interest Rate Change:
As a result of new legislation, the interest rate computed on underpayments and overpayments of Massachusetts taxes has changed. Previously, Massachusetts imposed a simple 18% interest rate on all such transactions. The new interest rate is based on current federal short-term interest rates plus four percentage points, compounded
The new interest rate provisions apply to all interest accruing on or after January 1, 1993. interest accruing before then is subject to the prior interest rate provisions.

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