The last six months in the utility world and how it affects customers
The public and economic impacts of the COVID-19 pandemic have been undeniable. Most prominently, job and business loss have affected families and communities who are now struggling to pay bills, including utilities, and stay safe at home.
In the Northwest and nationally, many utilities have stopped disconnections and proactively halted late fees to protect customers, as the public health crisis has underlined the deep importance of keeping households connected to safe drinking water, heat, and electricity. However, more than six months into the pandemic, we are starting to see disconnections resume and households facing large arrearages.
Since the beginning of the pandemic, the NW Energy Coalition (NWEC) has been actively working with utilities, regulators, and other stakeholders in Oregon, Washington, Idaho, and Montana on needed customer protections to keep people safe and bills affordable.
In April, Governor Inslee issued a proclamation banning all utility service disconnections and late fees for non-payment. This proclamation has been extended a number of times to reflect the continuing impacts on Washingtonians; it is currently in effect until December 31, 2020.
The Washington Utilities and Transportation Commission (UTC), which regulates investor-owned utilities (IOUs) in the state, opened a docket to discuss how the COVID-19 pandemic is affecting utility operations and customers and needed additional customer protections. The NW Energy Coalition worked in partnership with Puget Sound Sage, the Sierra Club, The Energy Project, Front & Centered, and the Public Counsel Unit of the Attorney General’s Office on a comprehensive proposal. The proposal would both extend the moratorium on disconnections and late fees while also putting in place longer-term bill payment arrangements, additional bill assistance funds that could be applied to arrearages, and urge utilities to explore arrearage management programs, all supported by comprehensive communications to customers.
Based on this proposal, as well as feedback from utilities and extensive public comment, the UTC directed a number of requirements, including:
- Extended the moratorium on disconnections for late payment for customers served by an energy IOU until at least April 30, 2021, to be reviewed in February 2021 by the UTC.
- Prohibited late fees and customer deposits until October 27, 2021.
- Allowed an increase in utility-funded bill assistance to 1% of retail revenues, which can also be used to address past due bills.
- Extended bill payment arrangements to 18 months for residential customers and 12 months for small business customers.
- Directed utilities to actively explore arrearage management programs, which encourage regular payment in exchange for some bill relief.
- Regular data reporting on customer arrearages and uptake of programs.
However, many customers in Washington are not served by an investor-owned utility for their electricity—there are about 60 consumer-owned energy utilities in the state. The Governor’s extension of the disconnection order applies to these utilities. To ensure that customers can manage their bills, it is essential that these utilities work creatively and in partnership with community organizations to help customers manage arrearages. And we are seeing some best practices that utilities can review and adopt. Here are some examples:
- The City of Seattle’s Utility Discount Program (UDP) provides income-eligible customers with a discount on Seattle City Light (SCL) of 60% on electric bills. Since the pandemic started, the City has provided a “fast-track” application process for customers, resulting in more than 11,000 new customers enrolled in the program.
- Tacoma Public Utilities, which oversees Tacoma Power, established an emergency relief program and has provided $2.4 million to customers affected by COVID.
- Benton PUD has expanded long-term payment arrangements and allows customers to apply their security deposits to arrears.
The Oregon Public Utility Commission established a disconnection moratorium for investor-owned utilities that will continue until at least April 2021. This action inspired some consumer-owned utilities to enact a self-imposed moratorium in the Spring and Summer. Now, most consumer-owned utilities – have since resumed regular disconnection practices.
On September 24, 2020, Oregon PUC commissioners passed a stipulation protecting IOU customers impacted by the pandemic. The proposal includes:
- Immediate protections for regulated energy utility customers through a disconnection moratorium for the 2020-2021 winter heating season.
- Suspension of security deposits, late fees, disconnection, and reconnection fees through October 2022.
- Other terms include; a continued suspension of disconnection for non-payment, notifying customers of arrearages and flexible payment options, and engaging in proactive customer outreach.
- Stipulations recommending the Commission open an investigation to improve utility services for low-income customers, and develop a framework for analyzing proposals through an environmental and social justice lens.
- The development of an advisory committee on equity and low-income affairs.
The Coalition has also been a strong advocate for robust outreach to customers with any past due amounts before any disconnections happen. Portland General Electric (PGE) and NW Natural have been able to provide proactive assistance for residential and business customers impacted by COVID-19. They are providing bill payment assistance, and reaching out to customers during the disconnection moratorium.
In Idaho, regulated utilities voluntarily suspended disconnects from May through July. Most utilities added the flexibility of payment plan options – which was most helpful for those in short-term unemployment.
However, at the beginning of August, regular disconnection practices began again. Although some utilities have helped provide payment plans and resources for payment, the most vulnerable populations are at risk of losing essential utility services.
Avista, which serves customers in Idaho, Oregon, and Washington, has been developing payment plans for income-eligible customers. If payment is not possible, they are directly connecting customers with the local Community Action Partnership Association for energy assistance on past-due bills, as well as other serves available through these organizations.
Prior to the pandemic, emergency bill payment assistance was only provided when the customer received a disconnect notice. However, because utility companies paused disconnects temporarily, the Community Action Partnership Association of Idaho worked with both utilities and partners at the State of Idaho to change the rules so that customers could apply for payment assistance if they were behind on their bill.
In March, Governor Bullock, enacted a directive that prohibits suspension of utilities during the state of emergency, which concluded in the summer directive for: electric, gas, sewage, disposal, water, telephone, and internet services. It also prohibited late fees for the duration of the directive. The directive has ended, and while some utility companies are offering payment plans as a resource, regular utility disconnection practices have resumed.
The Impacts of the Pandemic will Continue
In the short-term, each state took a different approach in response to the COVID-19 crisis and the necessary utility consumer protections. The moratoriums in Washington and Montana applied to all utilities, and in Oregon, it only affected investor-owned utilities. For Idaho and Oregon consumer-owned utilities, some paused disconnections voluntarily for a short time, but have since resumed regular practice. It is vital that utilities and regulators track data and require reporting on customer arrearages and uptake of programs to ensure that communities are getting the help they need.
In Oregon, policymakers will consider a proposal to allow the Public Utility Commission to establish a separate energy rate for low-income customers. This proposal would enable income-based rates for energy, addressing energy burden and more equitably distribute the costs of the energy system.
Regardless of whether a state has any kind of moratorium on disconnects, the region is seeing many customers facing high past-due bills; the economic climate is unlikely to change in the short-term and it is unclear what additional federal assistance will be forthcoming to help customers. In the last six months, we have seen utilities developing programs to help customers, such as longer payment arrangements, increased bill assistance, and proactive communication and streamlined eligibility enrollment for assistance programs. But there is still a huge opportunity for utilities to work closely with regulators, local government, and community stakeholders to support households. Nationally 1 out of 5 households is energy burdened, and energy bills, which have not always been affordable are even less so now when people have lost jobs and have a more challenging time regaining employment. The COVID-19 pandemic will continue to affect our economy, our public health, and our livelihoods as we move into 2021, and it is essential to keep people connected and able to afford their power and heat.