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Utilities can shut off any customer for nonpayment starting next month, regulators rule

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Utilities can shut off any customer for nonpayment starting next month, regulators rule

It’s official.

Come April 1, the yearlong ban on utilities disconnecting low-income customers who fail to pay their bills is over, the Pennsylvania Public Utility Commission voted Thursday.

While Gov. Tom Wolf, consumers and their advocates urged the PUC to extend the moratorium for a few more months — at least until the most recently passed federal stimulus bill has a chance to trickle down to the state and county levels — the four-member commission voted unanimously to lift the ban.

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“Utility service, like any service, must eventually be paid for,” said commissioner John Coleman, who has been calling for an end to the moratorium for months. 

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The moratorium, which was enacted in March 2020 and initially applied to all utility customers, was lifted in early November for households that were above 300% of the federal poverty level.

Still, many utilities did not rush to cut off clients, in part because they had a short window do so before the annual winter shutoff moratorium began. This has meant that a small number of customers has continued to accrue debts that the utilities and the PUC now fears are too big for the customers to tackle, causing them to further retreat from utility contact instead of reaching out for assistance.

Utilities have maintained that putting the risk of shutoff on the table is the most powerful tool they have to engage some customers, especially now that even more federal funding will be made available for struggling households.

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A stimulus package approved by Congress in December, which directs about $848 million to Pennsylvania for rent and utility assistance, is just now being put into action on the ground. And just this week, Congress passed another $1.9 trillion relief package that includes $4.5 billion in funding for the Low-Income Home Energy Assistance Program, PUC Vice Chairman David Sweet said.

Even though he voted for lifting the moratorium Thursday despite disagreeing with it, Mr. Sweet remained “unconvinced that the threat of termination is the only real way to garner the much-needed attention to these programs.”

He argued that to maximize the benefits of all of this financial help, it makes sense to wait to shut off customers until at least mid-July, when all the programs that could help them pay their bills have been established and funded.

While Chairwoman Gladys Brown Dutrieuille said she supported an extension of the moratorium, the other two commissioners did not, and, in an effort to bridge the divide, the chairwoman proposed lifting the ban under the condition that customers can arrange for long-term payment plans. Residential customers whose incomes fall at or below 250% of the federal poverty line would be entitled to a utility payment plan of at least five years. Those with income between 250% and 300% of poverty guidelines could get a two-year plan at a minimum. Those making 300% or more could get a one-year plan. Small-business customers, which according to utility data have fallen further behind than residents compared with prior years, would be entitled to a payment plan spanning at least 18 months.

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While all utilities will have the right to disconnect nonpaying customers next month, Chairwoman Brown Dutrieuille asked that they wait to do so.

“There are still people that are hurting,” she said. “We know that relief is there. It’s coming. So it would be unreasonable to terminate customers when we know relief is in sight.”

$1 billion in debt and growing

More than a million Pennsylvania utility customers are now a combined total of $1 billion behind on their payments, a near-70% increase from the prior year. All of them will be eligible for termination next month. Utilities are hoping that will jolt them into action because the longer that their debt accrues, the more paying customers will be on the hook for it.

Columbia Gas of Pennsylvania said it has seen customer calls for help go down during the past year, along with enrollment in its customer assistance programs.

It’s not the customers who owe a few hundred dollars that Columbia Gas is concerned about, the utility wrote. It’s the effect of the growing debt that 2% of its residential clients will have on the remaining 98%.

“Absent the ability to terminate service, this small group of customers will continue to impact the remaining residential customer base, many of whom are likely to have been negatively impacted from a financial perspective during the COVID crisis, yet are still paying their bills,” the company argued.

At Duquesne Light, for example, although one in five residential customers is behind in payments, there are about 8,000 customers who haven’t paid their bills in over a year and another 8,000 who haven’t paid in at least six months.

The average balance on their accounts is more than $1,000, according to the Downtown-based utility.

And while there is still money available from the same federal assistance programs that Mr. Wolf said are getting more funding in the coming weeks, Duquesne Light customers aren’t drawing on it the way they were in 2019, the company reported.

Duquesne Light opted not to disconnect any customers in the few weeks between the expiration of the pandemic-related moratorium in the fall and the start of the winter ban. But it sent letters saying it was allowed to do so.

“Even though this letter was not a notice of termination, it resulted in a notable, albeit short-lived, increase in customer contact for about one week, with call volume more than 50% greater than normal,” the Downtown-based electric utility wrote.

Duquesne Light interprets that as a sign that without the threat of losing utility service, some customers won’t seek help no matter what.

Consumer advocate groups have argued that there are other factors at play, such as red tape, a confusing web of social programs, and utility payments being just one of many things to worry about for those struggling economically and otherwise during a pandemic.

Anya Litvak: alitvak@post-gazette.com 

First Published: March 11, 2021, 9:53 p.m.

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