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Niagara Mohawk is dropping part of a controversial policy that would have required new customers with one-year leases to pay a two-month security deposit before it would turn on the lights.

The Syracuse-based utility and the state Public Service Commission staff have reached an interim agreement that would allow customers with a one-year lease to avoid having to pay a security deposit.

The company, which implemented the new policy in March in an effort to cut its losses from unpaid bills, will continue to require deposits from customers who have no lease or one that runs for less than a year.

"We believe our alternative security deposit policy will offer a better long-term solution for customers and the company," said Tony Pini, a NiMo senior vice president.

Niagara Mohawk's initial policy had sought to require security deposits, which typically would range between $200 and $400, from new customers, primarily renters with leases of one year or less.

Current customers who move to another residence within NiMo's service territory are exempt from the security deposit policy, as are customers receiving public assistance or who are blind, disabled or age 62 or older.

The initial policy sparked criticism from a group of state legislators, as well as consumer advocates, who argued that the policy was unfair to the poor.

The security deposits are part of NiMo's push to reduce its unpaid bills, which have averaged about $65 million a year over the last three years -- a level that Pini said is "extremely high" compared with other Northeastern utilities.

Niagara Mohawk said it also plans to submit to the PSC later this week an alternative proposal that calls for security deposits to be required, based on a new customer's credit history. That alternative would require commission approval, and in the meantime, the revised policy will be in effect.


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