Virginia municipal utilities face more than $88 million in unpaid bills

More than half a million municipal utility customers in Virginia were at least 30 days behind on their bills as of Dec. 15, with arrearages totaling more than $88 million statewide, a Commission on Local Government report presented Tuesday found. 

Most of those accounts were even further behind, with more than 423,000 accounts at least 60 days in arrears.

The data, which were collected in response to a budget provision negotiated during the special legislative session this fall, paint the clearest picture yet of the challenges facing municipal utilities that serve customers struggling to pay bills during the COVID-19 pandemic and its associated economic constriction. 

Among those utilities hardest hit, the report reveals, are the City of Richmond’s Department of Public Utilities, which logged almost 30,000 accounts at least 30 days in arrears as of Dec. 15. Those arrearages are equal to more than $22 million, or roughly a quarter of the statewide total. The Hampton Roads Sanitation District reported more than 100,000 accounts at least 30 days behind on payment, valued at almost $18 million. 

Unlike investor-owned utilities like Dominion Energy and Columbia Gas of Virginia, municipal utilities often operate on thin margins and have little access to cash. Whether they should be included in a statewide moratorium on service cutoffs due to nonpayment of bills was a hotly debated topic during the General Assembly’s special session to address COVID-19 and criminal justice this fall. 

Ultimately lawmakers did include municipal utilities in the ban, which will remain in place until “economic and public health conditions have improved such that the prohibition does not need to be in place, or until at least 60 days after such declared state of emergency ends, whichever is sooner.” 

An exit clause also permits utilities to petition the state for an exemption from the moratorium if unpaid bills begin to threaten their solvency. 

At the same time, a budget provision ordered the municipal utilities to report a range of information on arrearages to the Commission on Local Government, which was charged with submitting a report to the House and Senate money committees and the secretary of commerce and trade. 

While Department of Housing and Community Development staffers told the commission they didn’t have an exact percentage of utilities that had reported data, Legislative Affairs and Boards Coordinator Cody Anderson said only “a small handful” didn’t meet the deadline and “the vast majority of folks that we reached out to did get back to us.” In total, 146 municipal utilities responded. 

Among the information they provided was the relief municipal utilities had received by Dec. 15 from either state budget appropriations or federal Coronavirus Aid, Relief and Economic Security funds. 

Utilities reported just shy of $2,000 in state Appropriations Act relief and about $3.3 million in federal CARES funding allotted by the state, with most of that going to residential customers. 

Anderson told the commission that the low level of relief funds was because “a vast majority of localities hadn’t received money to allocate to accounts as of the end deadline for this report.” 

“We anticipate next year that we’re going to find this number has gone up exponentially,” he said.