The D.C. Public Service Commission yesterday ordered the Potomac Electric Power Co., and Washington Gas Light Co, to justify their practice of keeping special lists of VIP customers who get kid-glove treatment when their bills are overdue.
The commission, after four months of considering a staff report, found the lists "unjustly discriminatory" and gave the utilities 15 days to show why the practice should not be banned. Sources close to the commission said a similar order is expected shortly against the Chesapeake and Potomac Telephone Co.
The favored ones include "judges, congressmen, senators, elected officials, appointed officials, news media personnel and certain business and financial executives," the orders said. When one of these neglects to pay a gas bill, an individaully typed reminder notice is sent instead of the computer letter and/or shutoff notice that other laggards receive, the order related.
Failure to pay Pepco on time gets a VIP a telephone call or a personalized letter from a customer services manager when an ordinary customer gets a final notice from a computer.
"The extra measure of preference accorded to the special customers . . . is clearly the result of their influential status," the order said. "It is therefore concluded that such preference is grounded upon the company's desire to avoid the unfavorable exercise of that influence."
The staff report made clear that bills are pursued until paid in all cases and that the amount involved and the number of people considered are "minuscule" in comparison with the total number of customers.
The VIPs covered by the order include 154 Pepco customers and 190 gas company customers who live in the city, although the total VIP lists are larger than that.
The gas company's list of 640 VIPs includes 230 customers in Virginia and 220 in Maryland, although there is a longer list of 1,402 "potential and actual" customers who are VIP listed or would be if they are customers, company spokesman Paul Young said.
Pepco's full list "numbers in the hundreds rather than the thoysands," according to spokesman Horace Webb.
He said the actual names were specially extracted from the company's computer to satisfy the commission's request for D.C. purposes only, and numbers in the other jurisdictions are not known.
The chosen few were not named, nor will they be, Webb said. He said the list was "proprietary information" not subject to public disclosure.Public Service Commission accountant Norman Reiser, who took part in the study, said the commission asked the utilities only for numbers of persons and descriptions of treatment they received, and did not have any list of names.
"The companies decided who to put on the list. The people didn't ask to be put on it . . . it would embarrass them to be made public. We just didn't ask for the names." Reiser said.
Spokesman for both utilities said the entire matter was of little consequence but that the firms would respond as ordered. "It's no big deal." Young said for WGL. "We fell our procedure has been a perfectly reasonable business practice but if the commission wants us to discontinue it, we will."
Webb said Pepco "can't understand the concern. We rather suspect that the whole thing resulted form the one or two days of media interest rather than from any groundswell of public opinion." He said there had been no rash of telephone calls or letters and that the episode appeared solely to have been "fed by the media."
Specially coded Pepco customers in the District were in arrears a total of $2,153.43 on Nov. 17, out of a total of $33.3 million owed the company at that time, the staff report showed. The 190 WGL customers lagged in paying a total of $24,803 in 1976 compared with $26.2 million overdue from all the utility's D.C. customers. The amounts were less than one-half of 1 percent of the total owed in both cases, the report said.
The VIP lists were first revealed in a Washington Post article last September. At that time, Webb said Pepco had compiled the list partly to avoid cutting off schools, hospitals, fire stations and government builings. He said that the system was "informal . . . there are no formal criteria" for inclusion and that it was "just good business practice."
"The company's explanations to justify the preferential treatment for special custormers are not persuasive the staff reports said of both utilities. "To our knowledge, the individuals designated for such treatment never requested it and many other customers of equally good credit standidng and equally pressing circumstances are not extended the same courtesy."
The staff reports continued that while extra costs are doubtless incurred because of the special attention, it was impossible to determine the amount because of the small numbers of persons involved.