Northam requests another extension on Virginia’s utility shutoff ban

Gov. Ralph Northam speaks at a news conference in August. (Ned Oliver/Virginia Mercury)

With no clear end in sight to the Virginia General Assembly’s ongoing special session, Gov. Ralph Northam is again asking the State Corporation Commission to extend an existing moratorium on utility disconnections.

The current ban is set to expire on Wednesday. But in a letter sent earlier this week, Northam asked SCC commissioners to extend the moratorium through at least Oct. 5, citing its 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. 

If approved, it would bring the moratorium’s total duration to more than six months since it was first announced on March 16 — just a few days after the state’s first confirmed case of COVID-19.

Northam introduced new budget language to address utility payments at the start of the special session 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 after 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.

“I’m hopeful the SCC will agree to extend the moratorium,” he added at a news conference on Tuesday. But it’s still unclear whether commissioners will comply with the request. The SCC agreed to extend the ban last month for the second time, but signaled that it wouldn’t agree to offer more time unless ordered by the General Assembly

Regulators had already warned that an ongoing ban on disconnections was “not sustainable” — a message the agency reemphasized when it agreed to an additional extension in August. 

“If such bills are never paid, the costs of these unpaid bills are ultimately borne by paying customers as operational costs of the utility,” the SCC said in a statement. “These costs do not disappear; they are shifted to other customers, who themselves may be struggling to make ends meet in the economic catastrophe caused by the COVID-19 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.

But there’s been little consensus 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.