CenterPoint's credit-reporting plan is dropped

  • Article by: H.J. CUMMINS , Star Tribune
  • Updated: February 8, 2008 - 7:29 AM

CenterPoint Energy has backed away from its plan to start sending names of delinquent bill payers to credit reporting agencies, after advocates for low-income families challenged its usefulness.

CenterPoint Energy has backed away from its plan to start sending names of delinquent bill payers to credit reporting agencies, after advocates for low-income families challenged its usefulness.

The utility said Wednesday it will postpone indefinitely the reporting program it announced in December, but had not yet begun to use. The program was to be one of several collection efforts to tackle a record $106 million in delinquent natural gas bills last spring.

The Houston-based company, Minnesota's largest natural-gas utility, told the Star Tribune that it still considers credit reporting one of several appropriate ways to collect past-due payments. It also considers those collections crucial for keeping rates down for all customers.

But it has chosen not to begin such a program because "we feel it is important to focus our attention on exploring alternatives," the company said in a prepared statement.

Consumer groups had complained about the program.

They said it would damage credit records -- now used for everything from employment background checks to mortgages to car insurance rates -- of Minnesotans who don't pay their bills because they don't have the money. A new threat won't change that, the groups protested. The group threatened to seek legislation to ban the practice.

"It is simply adding insult to injury for families struggling with high energy costs and even mortgage foreclosures," said Pam Marshall, director of Energy Cents in St. Paul, a nonprofit that administers energy assistance programs.

The original plan was to send the payment records -- both on time and delinquent -- of all CenterPoint customers to the four major national credit reporting agencies: Equifax, Experian, Innovis and TransUnion. These agencies collect individuals' credit histories and compile the results into a credit score.

That would be an unusual step for utilities. Xcel Energy, Minnesota's largest electric utility, for example, doesn't do it.

A low total score, or just the presence of unresolved debt in the last 12 months has a "major, major derogatory impact with lenders," said Evan Hendricks, Maryland-based author of "Credit Scores & Credit Reports."

Instead, CenterPoint said, it will continue several consumer education and outreach efforts on various energy-assistance programs, as well as urging Congress to increase funding for assistance. It also continues to advise customers struggling to pay bills to contact CenterPoint for advice on their options before they are in arrears.

H.J. Cummins • 612-673-4671

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