State regulators fined Puget Sound Energy (PSE) $430,000 for improperly charging residential disconnect-visit fees to electricity and natural gas customers.

The Washington Utilities and Transportation Commission (UTC) approved a multi-party settlement agreement that alleged 1,639 violations of the state’s consumer protection rules. In addition to the penalty, the utility has now refunded to customers more than 9,000 disconnect-visit fees charged in error dating back to December 2009. PSE also agreed to change its procedures for handling such visits.

The company is not allowed to pass any penalty costs to customers through rates. The penalty will be deposited into the public service revolving fund. All disbursements from the fund are made by the Legislature.

The violations arose from an investigation of PSE’s records that covered March to May 2011. UTC staff found PSE was improperly charging a $13 disconnect-visit fee to customers. PSE employees can only charge the fee if he or she is dispatched to the residence to disconnect electric or natural gas service, and once there, collect a payment to stop the disconnection.

The investigation revealed PSE charged the fee when its employees left a 24-hour termination notice or attempted to collect a payment. The investigation found that PSE was making house calls solely for the purpose of attempting to collect a payment on delinquent amounts owed by the customer. The company has agreed to discontinue these collection visits.

For affected PSE customers that could not be refunded, the utility agreed to contribute an amount equal to the refund to PSE HELP, the company’s low-income assistance fund.

The multi-party settlement agreement was filed Oct. 29 with the UTC. The parties include: commission staff, PSE and the Public Counsel Section of the Attorney General’s Office.

Bellevue-based PSE serves more than 1 million electric customers and about 785,000 natural gas customers, primarily in the Puget Sound region of Washington.

The UTC is the state agency that regulates private, investor-owned electric and natural gas utilities in Washington. It is the commission’s responsibility to ensure regulated companies provide safe and reliable service to customers at reasonable rates, while allowing them the opportunity to earn a fair profit.