Boston Herald; Boston, Mass.; Oct 1, 1994; JEFFREY KRASNER;

Abstract:
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.

Full Text:
Copyright Boston Herald Library Oct 1, 1994
Commercial customers with overdue accounts at local utilities will see their total bills grow more slowly thanks to the efforts 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 flat 18 percent interest, the utilities' maximum interest will be set 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."

Mourad is also in federal court, fighting a request by Boston Edison that the 276-unit apartment complex be placed in receivership.

The DPU has permitted 18 percent interest since the 1970s. Victor Aronow, attorney for Mourad, said 18 percent interest is no longer justified.

DPU Chairman Ken Gordon said yesterday he favors considering a change in the rate of interest charged.

But Gordon rejected the notion that compound interest is unfair. "This is common practice and has been since Roman times."

Unpaid bills are usually added to the basis used in utility rate requests, he said. "The commission's sympathy goes out - not to the company's shareholders - but to ratepayers."

Residential customers cannot be charged compound interest. The DPU treats Mandela as a business because apartments do not have individual meters.

Edison spokeswoman Sheila Eppolito said the company will not publicly discuss any issues between itself and any particular ratepayer.

However, she said the utility has complied with regulators.

"It is up to the DPU how we charge customers and the rate we charge. All that has to be approved by the DPU."