Indecisive Pennsylvania panel retains a ban on utilities shutting off nonpaying customers
The PUC postponed a decision on allowing utilities to resume shutoffs of nonpaying customers, the third time the stalemated panel was unable to agree on lifting the moratorium.
The Pennsylvania Public Utility Commission on Thursday postponed a decision on allowing utilities to resume shutoffs of nonpaying customers, marking the third time the stalemated panel has been unable to agree about lifting a coronavirus moratorium on service terminations.
The PUC delayed a vote until Sept. 17 on whether to lift the order banning service terminations, put into place in March after the state declared a COVID-19 emergency. Twice previously, the commission deadlocked in votes to end the moratorium.
Utilities said the moratorium on shutoffs and payment penalties has led to a dramatic increase in nonpaying customers, but consumer advocates said the action was vital to protecting consumers hit by the pandemic’s economic outfall.
The commission gave no indication of points upon which it remains divided. Gladys Brown Dutrieuille, the PUC’s chair who had called for a vote this week, made a brief statement after Thursday’s announcement, thanking interested parties for submitting responses to the PUC.
“I understand the gravity of the issue that this commission is faced with, and although I regret not being able to provide any type of motion or opportunity for a determination today, I do believe that we will eventually get to vote on this matter and it will be a well-informed and considered vote,” she said.
The state’s electric, gas and water utilities reported earlier this summer that about 845,000 customers were so far behind that their service could be ended, an increase of 9.6% from a year ago. Peco, the company that serves Philadelphia and its suburbs, said in May that about 146,000 of its electric customers were in arrears — 9% of its 1.6 million customers.
The commission deadlocked in June and in July by 2-2 votes along party lines, with the two Republicans favoring lifting the moratorium on shutoffs, while the two Democrats opposed it. However, Dutrieuille, a Democrat, had said that an absolute moratorium protecting all customers is unsustainable, leading to speculation that a compromise was in the offing.
The postponement works in favor of consumer advocates, who had urged the PUC to reject a resumption in shutoffs. It also reduces the time for utilities to terminate non-paying customers before the state’s annual winter moratorium on shutoffs goes into place at the end of November, prohibiting utilities from disconnecting customers during the heating season through the end of March.
The state’s electric and gas utilities say total customer unpaid bills have soared to $479 million through the end of June, up $139 million or 41% over 2019 levels. About $181 million of the unpaid bills, or 38% of the total, are owed by customers who have identified themselves as low-income.
Utilities say that customers are more likely to default the deeper they dig themselves into debt, requiring a costly shutoff, disrupting families, and eventually forcing the utilities to seek rate increases for all customers to pay the cost of the write-offs. The utilities also say that customers are unmotivated to address payment problems without a threat of a shutoff.
“Once people owe more than $1,000, the chances of collecting that go way down,” said Alison Alvarez, the chief executive of BlastPoint, a Pittsburgh analytical firm that uses artificial intelligence to help utilities to identify at-risk customers.
Advocates for low-income customers petitioned the PUC to initiate a “robust public review process” of the moratorium before allowing shutoffs to resume. The Energy Association of Pennsylvania, the trade group for utilities, opposed the petition.
The commission normally has five members, but Wolf on Aug. 10 nominated Democrat Hayley Book to fill the seat of Andrew Place, who resigned in April. Until the Pennsylvania Senate affirms the appointment, the commission’s four members are divided equally between Republicans and Democrats.
In New Jersey, where utilities adopted a voluntary coronavirus moratorium on shutoffs, the state announced last Friday that energy companies agreed to extend their voluntary moratorium on shutoffs until Oct. 15, allowing energy companies more than a month to warn customers before terminating service. Customers can apply for COVID-enhanced relief programs or to pay up before their service is shut off.
About 24 states have enacted pandemic bans on utility shutoffs, according to the National Association of Regulatory Commissioners. New York has extended its moratorium until next year.
The Philadelphia Water Department, which is not regulated by the PUC, announced Wednesday that it will extend its moratorium on shutoffs of nonpaying customers through Sept. 30. Philadelphia water customers were encouraged to apply for help immediately at phila.gov/waterbillhelp or by calling (215) 685-6300 to avoid a large bill when shutoffs resume.
In a related COVID-19 matter, the PUC also declined to reconsider decisions that prohibit electricity suppliers from conducting door-to-door sales and in-person marketing efforts. Suppliers are allowed to conduct sales efforts electronically, by telephone or teleconference.
“The moratorium on door-to-door, public event, and in-person sales and marketing activities remains necessary to protect customers and supplier employees by minimizing social contact in response to the COVID-19 pandemic,” the PUC said in its order.
The Philadelphia Inquirer is one of more than 20 news organizations producing Broke in Philly, a collaborative reporting project on solutions to poverty and the city’s push toward economic justice. See all of our reporting at brokeinphilly.org.