Norwich — Norwich Public Utilities officials explained and defended policies that call for collecting utility security deposits from residential and commercial customers in a presentation to the utilities commission Tuesday but said they have made some changes and concessions based on criticism and suggestions from city landlords.

Landlords raised objections last month to the strict policies requiring residential utility deposits for some customers and requiring landlords to pay hefty deposits on vacant units for the times between tenants.

Jeff Brining, customer service division manager, presented statistics and an overview of the deposits policies to the Board of Public Utilities Commissioners Tuesday and offered to meet again with the Norwich Property Owners’ Association to discuss possible additional changes.

Brining said NPU currently has deposits on hand for 3,067 customers totaling $2,767,231. The utility has had to apply $698,046 in deposits to cover delinquent bills over the past three years and typically applies about 10 percent of the deposits on hand annually to cover overdue bills. Brining said about 5,000 NPU customers have back-due bills — some 2,000 more than have deposits on hand to cover them.

Brining said the inherent problem with utility billing is that customers consume the service before being required to pay for it, and it takes 61 days before NPU even knows a customer is behind on a bill. The customer uses power for 30 days, the bill comes and is not deemed overdue until a month later, while the customer continues to consume power, and NPU has spent staff time tracking the overdue payments.

Brining said 48 multifamily property owners have past due bills totaling about $124,000, with 80 percent of them more than 90 days overdue, and about half more than 180 days overdue.

“They’re not just a couple days late,” he said. “In many cases, it’s many months.”

NPU requires utility security deposits on residential customers with either poor or no payment history, stressing that utility payment tracking services are different separate from regular credit rating agencies. A deposit totaling one month of the dwelling unit’s usage if a person has poor payment history on the utility rating report or no history. A customer whose service has been terminated for nonpayment with the past two years or who has received five termination notices or who has been involved with meter tampering would owe three months’ deposit.

In response to requests from landlords in the Norwich Property Owners’ Association that the deposits are unfair for new tenants with no payment history who are just striking out on their own, NPU is considering a change to allow new customers a three-month payment plan to cover the deposit.

Commercial customers typically must pay a deposit of three months’ usage on a property. That proved contentious with landlords who must pay the utility bill when apartments are vacated for brief periods. NPU has changed the policy to require deposits of $500 per building and $100 per unit instead — “that’s way south of what their utility consumption would be,” Brining said.

All deposits for residents and commercial property owners are cut by 50 percent for properties in any of the city’s designated economic development incentive zones, such as Enterprise, Opportunity or Mill Enhancement zones.

Landlords also have asked NPU to alert them if a tenant or potential tenant would be required to pay a utility deposit. Brining said NPU has consulted with its attorney and decide it could provide landlords with that information if the tenant or potential tenant signs a voluntary release with NPU.

“Some of the accommodations we’ve already made in response to the property owners and customers,” NPU spokesman Chris Riley said Tuesday. “And we’re continuing to listen to property owners.”

c.bessette@theday.com