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November 2, 2020

PURA orders utilities to maintain payment plans to delinquent consumers

Photo | Eversource Energy An Eversource employee works on a power line in the wake of Tropical Storm Isaias.
By Keith M. Phaneuf, CT Mirror

State regulators ordered utilities Friday to continue offering payment plans to all consumers, regardless of hardship, through early February.

But the Public Utilities Regulatory Authority declined to extend the blanket moratorium on all shut-offs that Eversource Energy had sought.

PURA Chairwoman Marissa Paslick Gillett said current rules already protect all households against cold-weather shut-offs and charged Eversource with failing to adequately notify struggling customers of all types of available relief.

Eversource fired back that the pandemic has sparked unprecedented numbers of customers falling behind on payments and that the state needs to provide clarity on how utilities should proceed.

The utility giant, which operates electric, natural gas and water services, filed a motion in late September to extend a special prohibition order against residential shut-offs — regardless of hardship — that expired on Oct. 1. It also asked to renew a similar ban against shutting off service to small businesses that ran out on Aug. 1.

Both bans had been ordered by PURA in March when the coronavirus pandemic forced numerous business closures, left hundreds of thousands of residents unemployment and overloaded the intensive care units of Connecticut’s hospitals.

Eversource pressed PURA this week to renew those moratoriums, arguing it needed clarity.

“As a regulated utility, we can’t prudently take action that isn’t authorized by our regulators,” Eversource spokeswoman Tricia T. Modifica wrote in a statement. 

She added that “Continuing the moratorium is the right thing to do for customers who have faced financial hardship, uncertainty and an unprecedented series of other challenges as the COVID-19 pandemic persists.”

Attorney General William Tong, who supported Eversource’s motion to extend the moratorium against all shut-offs, said after Friday’s meeting that he believes this remains the best course of action.

“COVID-19 cases are spiking in Connecticut and this pandemic is not over,” he said. “People need electricity, heat and water to stay home safely right now. Families are still struggling. Payment plans are no doubt helpful to many, but they do not protect against shut-off for Connecticut’s most vulnerable families.”

But Gillett asked Friday why Eversource was pressing for the special moratoriums to continue, as state rules already prohibit utilities from shutting off residential service during cold-weather months. Customers still can negotiate payment plans as long as 24 months to catch up on overdue bills. Utilities also have the option to waive interest and negotiate past-due balances.

“What problem are we trying to solve?” Gillett asked.

If Eversource operates under state order, existing regulations allow the utility to recoup its bad debt — in this case, the delinquent bill payments — from the rest of its customer base.

But if it maintains the moratorium without a mandate from PURA, it still can ask the state for permission to recoup the lost payments — but it has no legal claim to the funds.

Gillett asked if Eversource should automatically be guaranteed to recoup all of this bad debt, adding that “It’s like you’re asking us to micro-manage your business.”

Utility regulators already have voiced concerns about both the adequacy of Eversource’s efforts to inform customers of hardship relief and the rising costs of services, she noted.

But Eversource’s vice president of distribution rates, Doug Horton, responded that the special moratoriums are needed because the economic impacts of COVID-19 are unprecedented, and Connecticut is far from out of the woods.

“Really, it’s a magnitude issue,” he said.

Coronavirus infection rates have been rising steadily for nearly two months in Connecticut.

Gov. Ned Lamont announced Thursday a daily infection test rate of 6.1% and a weekly rate of 3.4%. Both daily and weekly rates hovered around 1% for most of the summer.

Lamont also gave 85 out of 169 Connecticut cities and towns — representing 70% of the population — the option to order new restrictions on business activities to curb COVID-19 spread.

Uncollectible bills normally represent a fraction of 1% of customer payments, said Jessica Cain, Eversource’s vice president of customer operations.

Still, requests for assistance now are double what they traditionally were before the pandemic, Cain said, adding that an estimated 125,000 customers — all but 8,000 of which are residential — have past-due balances greater than $125. Eversource currently has more than 65,000 customers enrolled in special payment arrangements.

Putting customers on a payment plan is no guarantee that it will solve a household’s financial troubles, Cain adding, noting that 50% of all utility payment arrangements nationally ultimately fail.

“Signing up is easy,” she said. “Staying on them is not easy.”

And despite 15 e-mails, six letters and more than 20,000 outreach calls Eversource has made in recent months, many customers still don’t understand they can take advantage of an installment plan to resolve their delinquent payments, Cain added.

But an analysis released Thursday by PURA staff concluded that while Eversource and other utilities have informed customers about special, temporary protections during the pandemic, they don’t emphasize the longstanding “hardship” safeguards always there to protect struggling households.

“The COVID-19 payment arrangements were created for customers that had no other options available,” PURA’s Office of Education, Outreach and Enforcement wrote. “Yet, many of the communications mention only the COVID-19 payment arrangements and do not describe hardship protections.”

The utilities’ failure to emphasize these hardship safeguards has exacerbated customers’ common misconceptions that they wouldn’t qualify at a time when hundreds of thousands face unemployment and financial loss, the report adds.

Gillett added that PURA has been pressing Eversource to add information about hardship relief and payment plans to its bills, which could increase customer awareness significantly.

Friday’s order requires utilities to offer special payment arrangements to all households, regardless of financial hardship, through Feb. 9.

“We recognize today’s ruling denying our request to extend the moratorium and will continue working with our customers to promote residential hardship programs and payment plans before disconnecting service for non-payment,” Modifica said Friday.

Eversource customers may obtain more information about special payment arrangements by calling 800-286-2828.

Gillett also noted that 33 states either never imposed special moratoriums on shut-offs — regardless of hardship — or have since allowed them to expire. And in 15 states, utilities voluntarily adopted moratoriums without government mandates.

Eversource officials responded that the utility has not shut off any customers since the pandemic began, regardless of whether a special moratorium was in effect or had expired.

Eversource has faced a flurry of public criticism since June, when PURA initially approved a major electric rate hike. Regulators suspended it, though, on July 31.

The criticism only intensified when it took Eversource nine days in early August to correct more than 1.1 million outages following Tropical Storm Isaias — which led the General Assembly and governor in October to order PURA to develop a new, performance-based rate system for utilities. 

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