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As states reopen after coronavirus shutdowns, consumers' unpaid utility bills loom as costly problem

Sarah D. Wire and Anna M. Phillips, Los Angeles Times on

Published in Business News

Low-income advocates are pushing Congress for a national moratorium on shut-offs for the length of the national emergency and a six-month grace period to allow people to pay the bills once it ends.

Rather than add money to the Low-Income Home Energy Assistance Program, Jean Su, director of the Center for Biological Diversity's energy justice program, said Congress needs to provide monthly direct payouts to families.

"We asked for basically bill forgiveness for this entire period for low-wealth families," Su said. "The big threat is how crippling the debt will be at the end of this. If the federal government cannot bail people out, then states will have to take it on. And probably the utilities will go to their regulators and jack up rates."

Utilities are primarily regulated at the state level, and there has been pushback to the idea of a federally-mandated ban on utility shut-offs due to unpaid bills because of the pandemic. A national moratorium was removed from the CARES Act in final negotiations, Su said. Democrats are trying again in the new $3-trillion coronavirus spending package that passed the House this month.

Sen. Jeff Merkley, D-Ore., said a national moratorium and more money for LIHEAP are stopgap measures to keep consumers' utilities connected until the direct aid in the CARES Act arrives, including enhanced unemployment benefits and stimulus payouts.

"We hope these shock absorbers will be sufficient to avoid a situation where we help people for a few months and then things get turned off," Merkley said.

 

Some in the energy industry have been vocal about opposing a national moratorium on shut-offs or a ban on collecting utility debts during the crisis, saying state regulators and the industry are already working together to address the crisis.

"For Congress to engage now seems akin to coming to the table to address a problem after it has already been handled and resolved," wrote Brandon Presley, president of the National Assn. of Regulatory Utility Commissioners, in a letter to congressional leaders.

Adam Benshoff, executive director for regulatory affairs for the Edison Electric Institute, which represents investor-owned electric companies that provide electricity for more than 200 million Americans, said such moves would make it hard for companies to work with state regulators and customers to develop payment plans.

"A federal moratorium on service disconnections fails to recognize that different states will recover at different times from the pandemic and, instead, imposes a one-size-fits-all approach to recovery when the reality will be very different," Benshoff said in a statement.

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