Pennsylvania will allow utilities to resume normal service shutoffs for nonpaying customers after March 31, ending a coronavirus moratorium that utilities said had contributed to a massive growth of unpaid bills.
Citing the state’s improved economic outlook and the expected influx of aid under the $1.9 trillion federal stimulus package, the Pennsylvania Public Utility Commission on Thursday voted to allow the resumption of service terminations at the end of the month, though it added some protections for low-income customers.
Gladys Brown Dutrieuille, the PUC’s chair, said it was “time to return to the regular collections process” in accordance with the state utility code, citing the downward trend of unemployment as well as COVID-19 infection rates.
But Dutrieuille proposed to lengthen payment programs for as long as five years for some customers. Under terms of the programs, utilities typically forgive part of the debt for low-income customers who stay current in their payments.
Utilities had pressed the PUC to lift the moratorium on March 31, when the state’s annual winter ban on shutoffs of low-income customers ends. The state’s largest electric and gas utilities are owed more than $743 million, up about 76% from a year ago.
Low-income advocates and some elected officials, including Gov. Tom Wolf, asked the PUC to keep protections in place at least until federal pandemic assistance for rents and energy bills is expected to arrive in the next few months.
Community Legal Services lawyer Joline Price, who represents some low-income groups before the PUC, said that allowing the resumption of shutoffs will put at least 847,000 households at imminent risk of losing heat, electric, and water service.
“We call on utility companies to recognize the crisis we are all facing and offer compassion and flexibility to people who are struggling to get by,” Price said in a statement.
The commission struggled for much of last year on whether to lift the moratorium. It allowed utilities to resume shutoffs on Nov. 9 but the ban was lifted for only three weeks before the annual winter shut-off went into effect on Dec. 1. Utilities said that few customers responded to pleas to enroll in payment plans or to apply for assistance, and few customers were shut off.
“Based on a review of the data and comments, it appears that not as many customers as we hoped took advantage of the opportunity to enter into agreements, apply for assistance, or satisfy their arrearages,” Commissioner John F. Coleman Jr. said.
Without any commission action, the moratorium would have been lifted March 31. The commission on Thursday initially defeated a motion by Vice Chairman David W. Sweet to extend the moratorium to July 15. The motion failed on a 2-2 party-line vote, with Democrats Sweet and Dutrieuille voting to extend the moratorium, and Republicans Coleman and Ralph V. Yanora voting no.
The panel then voted unanimously to support the resumption of shutoffs, with added consumer protections. Sweet, lamenting the defeat of his effort to extend the moratorium, nevertheless joined in on lifting the ban because the new protections that it included through the end of 2021 were “better than nothing.”
Pennsylvania’s approach differs from that in New Jersey, where Gov. Phil Murphy on March 3 signed an executive order extending its moratorium on service shutoffs until June 30.
“Despite the fact that we now see the light at the end of the tunnel for the COVID-19 pandemic, many families are still reeling from the economic impacts of the virus,” Murphy said, explaining the extension. The Garden State’s ban applies to all residential gas, electric and water utilities, both public and private.
The total amount of unpaid utility bills soared 89% last year in New Jersey, from $376 million to $709 million, according to data compiled by the New Jersey Division of Rate Counsel. About two-thirds of the money is owed by residential customers. About 8% of the state’s 7.6 million utility accounts face disconnection.
The Philadelphia Water Department, whose rates are not regulated by the PUC, announced Monday that it would extend its moratorium on shutoffs until April 2022, though it will resume charging penalties for nonpayment on May 1 against customers not enrolled in low-income assistance programs. Penalties for overdue bills were suspended for all customers under the coronavirus relief.
In Pennsylvania, the new protections adopted in Thursday’s decision are primarily aimed at extending the payment terms to make them more affordable. For a family of four earning less than $66,250 a year — that’s 250% of the federal poverty level of $26,500 — utilities will be required to offer a payment arrangement of a minimum of five years. Customers can request a shorter arrangement or utilities can agree to a longer arrangement.
For customers with higher income levels, utilities must offer payment terms of one or two years.
For small-business customers, utilities are required to offer a payment arrangement for a minimum length of 18 months.
As a rule, utilities will give customers a payment arrangement unless there is a history of breaking multiple agreements. But under Thursday’s decision, the commission can also order one payment arrangement for a residential customer who has previously defaulted on a commission-ordered payment arrangement.
In addition, utilities also must make quarterly reports to the PUC through the end of the year on the numbers of customers at risk, the total amounts of the arrearages, and the numbers of customers terminated.
Coleman emphasized that normal consumer protections remain in place to notify customers who are behind on payments and to allow customers to dispute charges.
For instance, public utilities must give customers 10 days’ notice before termination, and make two additional attempts at personal contact before termination. Customers can avoid a shut off by paying their arrearage in full, by entering into a payment arrangement, by enrolling in a customer assistance program if they are low-income, or by filing a dispute with the PUC. A utility may not terminate service while a dispute is pending.
The PUC left unresolved who eventually will cover the cost of any unpaid utility bills that are written off as uncollectible. Some consumer advocates suggest the utilities’ owners should pay. But the law currently allows utilities to count uncollectible amounts as an expense that they can later seek to recover through higher rates for all customers.