Pennsylvania considers allowing utilities to resume shutting off nonpaying customers

Pennsylvania utility regulators will reconsider an emergency order that prevents utilities from terminating service to non-paying customers because of the pandemic.

Gladys Brown Dutrieuille, the chair of the Pennsylvania Public Utility Commission, said the state “finds itself in a different place than in early March,” when the order was put in place, and has asked for public comments on whether the moratorium on shutoffs should be changed.

Dutrieuille seemed willing to allow utilities to resume shutoffs, with some new safeguards for consumers.

“While it would be easy to simply keep the absolute moratorium in place, protecting 100% of the customers for the duration, I do not believe that is sustainable,” she said in a letter seeking public comment by an Aug. 18 deadline. She intends to bring the matter up for a vote at the PUC’s Aug. 27 meeting.

The PUC’s two previous attempts to modify the moratorium stalled because of 2-2 party-line deadlocks.

In June, the commission rejected a proposal by two Republican commissioners to allow utilities to resume shutting off non-paying customers. In July, the commission failed to pass a Democratic proposal to create a study group to make recommendations about how to lift the moratorium.

Dutrieuille, a Democrat, said this week that a prolonged moratorium on shutoffs was reducing utility revenues and increasing customer defaults. But the pandemic and its economic effects continue, and she said the PUC should also consider adding new consumer protections if it lifts the ban.

“Maintaining a total moratorium for a time period that is too lengthy may only work to accelerate the accrual of arrearages for many utility customers and place them at increased risk of default and termination in the future, when large bills inevitably become due,” she wrote. Also, she said maintaining a total moratorium may frustrate efforts to place customers in assistance programs.

The Energy Association of Pennsylvania, the utility trade group that has asked for the moratorium to be lifted, says there already are a wide range of consumer protections in place, including required payment arrangements, low-income assistance, and advance notification of shutoffs.

“From our perspective, this is not going to be like the Wild West if the ban is lifted,” Terrance J. Fitzpatrick, the association’s president, said in an interview.

Dutrieuille in July proposed adopting a range of new protections, including doubling the termination notice to 20 days, waiving all reconnection fees and late-payment charges for residential and small commercial customers, allowing additional medical excuses for customers, and relaxing rules for income verification.

For years, utilities have been prohibited from shutting off customers during five winter months. Typically, when the moratorium ends at the end of March, customers rush to enroll in payment programs to service interruption.

But the moratorium was extended this year because of the coronavirus outbreak. It includes all customers of gas, electric, water, wastewater, telecommunications and steam services by PUC-regulated companies (most municipal utilities are not regulated by the PUC).

Consumer advocates have asked the PUC to retain the ban on service shutoffs.

The state’s electric, gas and water utilities reported earlier this summer that by the end of May, about 845,000 customers were so far behind that their service could be ended, an increase of 9.6% from a year ago. Of the accounts in arrears, about 790,000 are residential customers, including 211,000 classified as low-income families.

About 146,000 of Peco’s residential, commercial and industrial electric customers were in arrears — 9% of its 1.6 million customers, the company said in May.

Meanwhile, utilities have seen a dramatic shift in electrical usage in response to reductions in the commercial sector and increases in customers telecommuting. Along with their jobs, employees have also taken home some of their employers’ energy bill.

Peco said that residential usage in the second quarter was 8% greater than a year ago, after the numbers are adjusted to account for changes in weather. Usage among commercial customers, which includes retail and offices, declined by 14% during the same period, said Steven Singh, the utility’s vice president of technical services.

The increase in residential energy consumption is primarily due to additional heating and air-conditioning costs, Singh said, rather than increased use of electronic equipment. Heating and air-conditioning costs account for about 38% of a typical household’s energy use, according to the U.S. Energy Information Administration.

The PUC said that any comments about modifying the moratorium on shutoffs must be both electronically filed at the PUC’s website, www.puc.state.pa.us, and emailed to the PUC’s secretary at rchiavetta@pa.gov by next Tuesday, Aug. 18.