How DPU got rid of the convenience fee for online utility bill payments
In the 2024 budget year, Richmond residents and businesses collectively paid more than $1 million in convenience fees when paying their utility bills online.
As of July 1, the city has scrapped the $2.25 extra fee charged for the privilege of making an online payment.
In a statement this month, the city’s Department of Public Utilities said the changes were an effort to make bill payment “easier, more accessible and affordable for everyone and as part of our commitment to affordability and improved customer service.”
Officials are also increasing the maximum amount for a single online payment from $500 to $1,000, removing an obstacle that complicated the process of settling particularly high bills via credit card or electronic bank payment.
“Sometimes customers had to pay twice for one charge,” DPU Director Scott Morris said at a recent City Council briefing. Having to split up large bills into multiple online payments also sometimes forced users to pay the convenience fee twice to settle one bill.
Before the change this summer, the utility bill convenience fees were collected through EZ-PAY and PromisePay, the third-party platforms DPU uses for bill payments.
In fiscal year 2024, the EZ-PAY fees added up to $868,426, according to the city. The PromisePay fees that year were $333,432.
The utility department will now pick up those fees directly, according to the city, but the financial impact is expected to be offset by cost savings from more people making online payments instead of mailing paper checks.
Handling paper payments can be “burdensome,” said DPU spokeswoman Rhonda Johnson, “given tasks including researching and making adjustments for delayed checks, identifying associated accounts for checks, rectifying returned checks and collections for delinquent accounts.”
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DPU officials have said they’re making a variety of other billing improvements that will also help the department handle the impact of dropping the convenience fee. Those changes include new handheld meter readers, a more timely approach to handling billing issues and proactive leak checks to help address billing issues earlier.
Richmond utility bills are expected to increase overall under the new rates and fees that took effect July 1.
Contact Reporter Graham Moomaw at gmoomaw@richmonder.org
