Virginia will suspend utility shutoffs until October, SCC rules

By: - September 15, 2020 6:01 pm
The State Corporation Commission

The State Corporation Commission regulates Virginia electric utilities. (Ned Oliver/ Virginia Mercury)

Virginia’s State Corporation Commission agreed to extend an existing moratorium on utility disconnections until Oct. 5.

But regulators warned it would be the last time they granted an extension on the shutoff ban, which has already been renewed twice since the SCC first imposed it on March 16 — just a few days after Virginia’s first confirmed case of COVID-19.

“We have warned repeatedly that this moratorium is not sustainable indefinitely,” the agency wrote in a Tuesday order. “The mounting costs of unpaid bills must eventually be paid, either by the customers in arrears or by other customers who themselves may be struggling to pay their bills.”

The extension followed a Monday letter from Gov. Ralph Northam, who asked the SCC to continue the ban until the state’s General Assembly could agree on a more permanent solution during the ongoing special session.

Previously, the moratorium was set to expire on Wednesday. But with no clear end to the session in sight, Northam requested another continuation earlier this week, citing the the ban’s importance in protecting public health throughout the COVID-19 pandemic.

“My request for an extension will give the General Assembly the time they need to address this issue, finalize their budget and complete their important work during this special session,” Northam wrote.

The governor introduced new budget language to address utility payments when lawmakers convened in August, including a debt forgiveness program and structured repayment plan. Earlier this month, he also proposed requiring Dominion Energy — the state’s largest energy monopoly — to cover unpaid electric bills with $320 million that regulators say the company previously overcharged consumers.

But nearly a month since the General Assembly convened, largely to address a projected $2.7 billion shortfall, legislators have yet to address Virginia’s two-year spending plan. With no legislatively approved solution to address unpaid bills — driven by record unemployment numbers amid the pandemic — Northam said that another extension was needed to give lawmakers more time to finalize the state’s budget.

While the commission agreed to renew its order, Tuesday marked the second time that the agency has warned it wouldn’t extend it further unless ordered by the General Assembly. Regulators had already warned that an ongoing ban on disconnections was “not sustainable” — a message the agency reemphasized in its latest statement this week.

“Unless the General Assembly explicitly directs that a utility’s own shareholders must bear the cost of unpaid bills, those costs will almost certainly be shifted to other paying customers,” Tuesday’s order read.

Regulators also warned of “potential financial damage” to smaller electric and water utilities, which “may not have ready access to additional capital” in the same way as large companies such as Dominion.

The SCC has repeatedly emphasized there are already existing protections for customers during the pandemic. In June, the agency directed utilities to offer extended payment plans to customers struggling to pay bills. Companies were prohibited from charging late fees in those extended payment plans, and the SCC said in August that all utilities under its jurisdiction had complied with the request.

On Tuesday, regulators wrote that customers would continue to be protected from service shut-offs until October as long as they had agreed on a repayment plan with their utilities. The agency also ordered companies to submit quarterly reports to the commission on “the current number and status of repayment plans” and how their account balances have been impacted by the moratorium.

“We have urged the Governor and General Assembly to appropriate funds for direct financial assistance to those customers who are unable to pay their bills due to the COVID-19 pandemic, in order to avoid shifting these costs to other customers,” the agency wrote in its latest order. “We hope the General Assembly uses this additional time to act on this recommendation.”

But there’s been little consensus among lawmakers, utilities, and advocacy groups on whether the moratorium should be maintained or whether companies should have greater flexibility to collect on unpaid bills. Smaller utilities — a group that includes Virginia’s 13 electric cooperatives — have expressed concerns over the ban since it first started.

A late May filing from the Virginia, Maryland & Delaware Association of Electric Cooperatives showed that some co-ops have seen a sharp increase in accounts with past due balances compared to 2019. In a June letter, dozens of lawmakers from both sides of the aisle asked utilities to provide wide-ranging data on the economic impacts of the pandemic, including the number of customer accounts with unpaid balances this year compared to last year, revenue and earnings history and “the magnitude of late fees and penalties that would have been charged absent the moratorium.”

The information would “allow the General Assembly to more fully consider and propose legislation,” the letter read.

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Kate Masters
Kate Masters

Kate grew up in Northern Virginia before moving to the Midwest, earning her degree in journalism from the University of Missouri. She spent a year covering gun violence and public health for The Trace in Boston before joining The Frederick News-Post in Frederick County, Md. Before joining the Mercury in 2020, she covered state and county politics for the Bethesda Beat in Montgomery County, Md. She was named Virginia's outstanding young journalist for 2021 by the Virginia Press Association.