Senate approves 12-month utility debt repayment plans with bipartisan support

Power transmission lines. (Ned Oliver/Virginia Mercury)

The Virginia Senate passed legislation Wednesday that will require all utilities except those controlled by municipal authorities to offer 12-month payment plans to residential customers who have been unable to pay their bills due to the COVID-19 pandemic.

The measure passed 24-12, garnering support from four Republicans. All Democrats except Sen. Creigh Deeds of Bath County, who abstained, voted in favor of the plan.

Sponsored by Sen. Jennifer McClellan, D-Richmond, the proposal codifies an order by the State Corporation Commission made in June as part of an extension of a ban on utility disconnections resulting from nonpayment of bills due to the pandemic. 

While larger utilities like Dominion Energy have been supportive of the proposal, smaller utilities like some of the electric cooperatives that have less access to capital have expressed concerns about the implications of the bill when it comes to recouping costs related to unpaid bills. 

An amended version of the measure that cleared Senate Finance and Appropriations last week specifies that utilities will be allowed to recover costs related to such emergency debt repayment plans.

All utilities except municipal ones will also be required to submit certain data about arrearages and their associated costs to the General Assembly this fall. 

Several Republicans voiced concerns about the financial effects of the debt repayment plans.

Senate Minority Leader Tommy Norment, R-James City, said while he didn’t know “whether some view this as a compassionate situation or they see it as an initial step in a transferring of economic wealth … there is a day of reckoning coming.”

“These delinquencies that are going to occur between now and Oct. 4 are just going to grow larger and larger, and in fact it is going to become more of a challenge for some of these individuals to make the payment,” he said, referring to the expiration date of the current disconnection moratorium, which the SCC reluctantly extended Tuesday to allow lawmakers to finish hammering out solutions to utility shortfalls. 

Sen. Mark Obenshain, R-Rockingham, similarly questioned whether the current leniency could last much longer, saying it could force people who are paying their bills to start picking up the costs of those who aren’t.

“When you talk about shifting the burden to a rate base of 10,000 homes, it becomes a real problem for those ratepayers who are left holding the bag,” Obenshain said.

McClellan defended the measure as a necessary backstop for Virginians facing “the worst economic crisis probably since the Great Depression.”

Continuance of the moratorium, she pointed out, will be debated and resolved separately. Gov. Ralph Northam has introduced a budget amendment that would extend the ban 60 days after the termination of Virginia’s state of emergency declaration for the pandemic. The governor is also negotiating controversial new language that would put $320 million of what state regulators say are overearnings by Dominion Energy toward the forgiveness of unpaid utility bills. 

McClellan said she had been told that people not paying their utility bills “aren’t people gaming the system.” 

“The people not paying their bills are not paying them because they can’t,” she said. “They will not be able to pay six months’ worth of bills upfront all at once. And so what this does is give them and the utilities some certainty of how we will stretch out that debt. … This is a very narrow bill that says here is how we are going to try to alleviate unprecedented debt in unprecedented times when people are economically hurting during a health pandemic so they don’t lose electricity, water and gas.”

Mercury reporter Graham Moomaw contributed to this story.