Proposals to address rising numbers of unpaid utility bills during a time of mass unemployment have faced uphill battles during the special session of the General Assembly convened in part to address the fallout of the COVID-19 pandemic.
In the two weeks since the session began, the House of Delegates has yet to take up either of two measures dealing with utility bills. In the Senate, the patron of the more controversial of those proposals voluntarily withdrew it in favor of sending it for review to an advisory commission. The other proposal, while still alive, is enmeshed in negotiations as legislators attempt to reconcile it with an item in Gov. Ralph Northam’s budget that would extend the current moratorium on utility disconnections 60 days beyond the expiration of Virginia’s pandemic state of emergency declaration while also mandating that utilities offer cash-strapped customers repayment plans.
The State Corporation Commission last month urged legislators to chart a policy course for utilities during the pandemic, warning it wouldn’t extend a disconnection ban beyond Sept. 15.
“This period of time has been sufficient to provide an opportunity for the General Assembly to choose whether to address legislatively the effects of the COVID-19 crisis on utility customers and utilities,” the commissioners wrote Aug. 24.
Legislators, however, have indicated that utility legislation is a low priority this session.
A proposal from Dels. Jay Jones, D-Norfolk, and Lee Ware, R-Powhatan, that would have directed regulators to conduct an emergency investigation of Dominion Energy’s earnings and credit excess revenues to customers over the next six to 12 months as a form of bill relief has not been docketed in the House’s Labor and Commerce Committee.
No additional meetings of the committee have been scheduled; asked if he expected it to convene again, Jones replied, “Not to my knowledge.” (An inquiry to committee chair Jeion Ward’s office was not returned.)
“It is my understanding that bills that haven’t got out of committee (by Friday), there isn’t enough time” for them to be taken up, Jones told the Mercury.
Dominion’s overearnings — estimated to total more than $500 million since 2017 — have become a hot-button political issue in Richmond, particularly, but not solely, among Democrats. Jones and Ware’s bill garnered 27 additional patrons from both sides of the aisle, while its Senate version, spearheaded by Sen. John Bell, D-Loudoun, racked up two additional Democratic patrons and one Republican. A Dominion spokesperson said the utility didn’t have a comment on the legislation at this time.
The Senate version of the proposal, described by Bell as an effort “to bring relief to people in the commonwealth,” made it to the Commerce and Labor Committee floor but was then voluntarily pulled from consideration by Bell. Instead, the senator recommended the suggestion be sent for review to Virginia’s Commission on Electric Utility Regulation, an advisory body of lawmakers only empowered to send recommendations to the legislature.
Emergency debt repayment plans
Sen. Jennifer McClellan, D-Richmond, and Del. Lashrecse Aird, D-Petersburg, are pushing legislation to require most of the state’s utilities to offer residential customers struggling to pay bills an emergency debt repayment plan.
Aird’s measure, like Jones and Ware’s legislation, has also not been docketed by the House Labor and Commerce Committee.
“I don’t believe the House version will get a hearing,” she said.
Instead, lawmakers are slowly coalescing around a substitute proposal by McClellan that, among other provisions, would set the repayment plan term at 12 months rather than 24 and remove a cap set on minimum monthly payments under such plans.
The bill codifies the terms of a June order by the State Corporation Commission that requires utilities to offer 12-month payment plans to customers in arrears due to the COVID-19 pandemic. Instead of applying to all customers, however, McClellan’s proposal only pertains to residential ones.
Aird said she “wasn’t excited about the substitute.”
“I thought it was really important to have the 24-month language in the bill because we’re talking about trying to ensure that households have a payment plan that is sustainable and affordable,” she said. “Families will need to have that balance spread out over time.”
Most critically, McClellan’s revised proposal would only require the crafting of payment plans by utilities under the State Corporation Commission’s jurisdiction, a change that would exempt utilities run by municipalities, such as city gas and water authorities.
That amendment brought a number of early opponents to a more neutral position on the legislation, although Mitchell Smiley of the Virginia Municipal League in an email criticized Aird and McClellan’s bills for not being developed “with input from municipal utilities prior to introduction” and argued that a better course would be for Virginia to use unobligated funds obtained through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act to financially assist struggling residents.
Even with the removal of municipal utilities from the portion of the bill mandating repayment plans, however, concerns remain among electric co-ops and many of the state’s natural gas companies over the lack of a mechanism for utilities to recover costs related to widespread nonpayment of bills.
“The way the language is written it imposes unknowable costs on co-ops,” Steve Johnson, a spokesperson for the Virginia, Maryland and Delaware Association of Electric Co-ops, told the Mercury. “Costs that cannot be recovered inevitably eat into co-op margins. Unlike Dominion or (Appalachian Power), not-for-profit utilities don’t have a whole lot of options when it comes to recovering those costs.”
During an Aug. 28 hearing on the measure, Virginia Natural Gas Director of Government Affairs Morgan Whayland, speaking also for Roanoke Gas and Washington Gas and Light, similarly argued that “any legislation that codifies a repayment plan program should include certainty on cost recovery language.”
“We cannot carry the regulatory uncertainty,” she said.
While cost recovery has proved a sticking point in negotiations over the legislation, McClellan has expressed reservations about including such a provision in her bill, arguing that lawmakers lack sufficient information at this point to order a particular path forward. Her proposal before the Senate also calls on utilities, both jurisdictional and municipal, to provide the General Assembly’s money and commerce and labor committees with detailed information about their COVID-related debts.
“It is my position that cost recovery doesn’t need to be addressed in my bill,” she told the Mercury. “My bill was simply codifying what the SCC ordered for extended payment plans and then doing data collection so we could see what the universe of costs are. To me that information is necessary before we figure out a long-term legislative fix for cost recovery.”
Utilities are also not united behind a single cost recovery plan. Even as smaller utilities balked at McClellan’s bill, Dominion Energy told the Senate Commerce Committee that it supported the measure, and spokesperson Rayhan Daudani later told the Mercury the company also supports Northam’s introduced budget “and believe(s) policy makers should consider options to give customers a clean slate going forward.”
Dana Wiggins of the Virginia Poverty Law Center, which has been closely involved in crafting the bill, said during the committee debate that “it became very clear after several different sets of negotiations … that every single utility obviously does have different needs around cost recovery.”
Despite the more limited scope of McClellan’s proposal, some lawmakers have remained unconvinced.
Sen. David Marsden, D-Fairfax, in committee said he was “uncertain here as to what the ramifications of this bill will be, how it will line up with the budget amendment that’s coming through” — a concern also echoed by Sen. Lynwood Lewis, D-Accomac, and Senate Minority Leader Tommy Norment, R-James City.
“I think we need to be mindful that the governor has inserted in the budget language pertaining to this and no matter what we do in the legislative body, ultimately the language in the budget is going to override general law,” said Norment. “That is where I would prefer to address it.”
In a compromise move, Senate Commerce and Labor in an 8-5 vote passed the bill on to the Finance and Appropriations Committee for review, where several senators said they hoped it could be “synced up” with the governor’s budget amendment. (In an unusual episode, a clearly annoyed Norment explained his vote against the measure as a consequence of what he described as the “discourteousness” of Poverty Law Center staffer Wiggins in speaking over the committee chairman and exceeding her time during testimony delivered over Zoom. “For that I am going to vote against this,” he said. “I just think her behavior needs to improve.”)
McClellan said Wednesday that if the General Assembly did opt to lay out a cost recovery path for utilities, she would prefer it to be added to Northam’s budget amendment but was “reserving judgment” until a firm proposal was put forward.
“If I put it in my bill, it’s going to be very narrow and give the (State Corporation) Commission discretion,” she said.
This story has been updated to clarify that Dominion supports Northam’s introduced budget.