Nearly a million Pennsylvania customers were late on their utility bills going into the winter after more than eight months of pandemic-induced economic recession. But utilities disconnected few customers for nonpayment, despite being allowed to resume shutoffs in November.
About 968,000 mostly residential customers of large electric, gas and water utilities were more than 30 days past due on their bills at the end of November, up 34% from a year ago, according to reports filed with the Pennsylvania Public Utility Commission. They owed more than $808 million, up 70% from the previous year.
The numbers are likely to increase dramatically in the coming months, when winter heating bills typically soar.
“We have not yet hit the highest consuming month of the winter,” said Nils Hagen-Frederiksen, the PUC’s press secretary. Home-heating demand usually peaks in February, with bills due in March.
Peco, the state’s largest utility, reported that 141,600 of its 1.6 million customers are past due, up 64% over the previous year. They owe $141.6 million, nearly triple the amount of arrearages from 2019. Peco supplies electricity to customers in Southeastern Pennsylvania and gas service to the Philadelphia suburbs.
More than 149,000 of 500,000 customers of Philadelphia Gas Works, which provides natural gas service inside the city, are behind on their bills. They owe $80.3 million, up 67% from the previous year. The unpaid balance is more than 10% of total annual revenue of the city-owned PGW.
State law prohibits electric and gas utilities that provide heat from shutting off most nonpaying customers from December through the end of March, so advocates expect a day of reckoning for customers will arrive at the end of winter. The PUC next month is likely to consider modifying rules it put in place last year to protect customers financially distressed by the pandemic.
But somebody eventually will have to pick up the tab for the unpaid bills — either the customers themselves, ratepayers at large, or the utility’s owners.
With unemployment levels still high after the imposition of the COVID-19 lockdowns, consumer advocates fear that many customers will never be able to pay down their unpaid bills. Utilities typically write off uncollectible bills, and the costs are recovered from all customers in the form of higher rates.
Low-income advocates and utilities, who are often at odds, see eye-to-eye on the need for a government rescue. They hope some part of the $900 billion federal spending bill that President Donald Trump signed into law in late December will filter down to pay for energy assistance. Advocates expect about $853 million of the federal stimulus package will go to rent and utility assistance for Pennsylvania families.
“There’s a lot of talk right now about how that program and funding gets out to people and we’re working hard on it,” said Elizabeth R. Marx, executive director of the Pennsylvania Utility Law Project.
The PUC imposed a ban on shutting off customers for nonpayment at the onset of the coronavirus crisis last March. But utilities began to express alarm in the summer at the mounting pile of unpaid bills. They say it becomes increasingly unlikely to recover past-due bills from many customers once the debt becomes unmanageable.
The commission partially lifted the moratorium on Nov. 9, but put safeguards into place for families and small businesses that were struggling financially because of the pandemic. The key restriction prohibited utilities from shutting off “protected customers” whose income is no more than triple the Federal Poverty Guidelines, which are set at $26,200 for a family of four, so the yearly limit for such a family would be $78,600.
After lifting of the restrictions, utilities had only three weeks to shut off customers before the annual winter moratorium went into place on Dec. 1, and few utilities were able to modify their computer systems or practices to take the new guidelines into effect, said Terrence J. Fitzpatrick, the president of the Energy Association of Pennsylvania, a trade group of utilities.
“Companies aren’t eager to terminate customers in the first place,” he said.
No electric utilities shut off customers in November, and only two gas utilities and one water utility disconnected customers for nonpayment, according to the reports filed with the PUC. Only utilities regulated by the PUC are required to report; most customers get water and sewer service provided by municipal utilities, which are not governed by the PUC.
Two companies owned by Essential Utilities of Bryn Mawr — Aqua Pennsylvania and Peoples Natural Gas in Pittsburgh — accounted for 99% of the 1,286 shut offs by major utilities. Aqua shut off 405 residential customers and 19 nonresidential customers in November, and Peoples shut off 899 customers, all but 12 of which were residential. UGI Utilities of Wyomissing, Pa., shut off 8 non residential customers.
Aqua and Peoples complied with PUC guidelines before shutting off customers, said Daniel M. Lockwood, an Essential Utilities spokesman. The guidelines included providing 20 days notification and encouraging customers to enroll in payment programs or applying for low-income assistance.
“Aqua continues to notify at-risk customers to work with them before disconnection,” he said in an email. Peoples Gas has suspended terminations in accordance with the winter moratorium.
Representatives of Peco and PGW said the utilities used the time in November to encourage customers to enroll in payment programs, which for low-income customers usually involves paying reduced amounts with the understanding that some of the debt will eventually be forgiven if the customer does not miss any payments.
“PGW remains committed to helping our customers maintain their service, not accumulate higher debt during the winter, and avoid a future service termination,” said Richard G. Barnes, a PGW spokesman.
The impact of the moratorium on shut-offs may also show up in the PUC’s upcoming annual Cold Weather Survey, which tallies the number of customers without utility service going into the winter.
PGW in December reported that 981 of its customers were without natural gas service. While that number is large compared to other utilities, PGW last year reported 7,222 customers without service going into the winter of 2019, suggesting that despite the current economic troubles, more at-risk customers have heat this winter than last year.