SCC Says No Utility Cutoffs For Two Weeks

By Brian Carlton

September 17, 2020

Commission gives warning in response to governor’s letter, saying this will be the last extension.

RICHMOND-Time’s running out. The State Corporation Commission handed down that message Tuesday. On Monday, Gov. Ralph Northam asked the group to extend Virginia’s current moratorium on utility cutoffs, which was set to end Wednesday. That would give the General Assembly enough time to come up with a long-term solution to the problem, he argued. The group agreed, extending it through Oct. 5. But that extension came with a word of caution, as SCC members said they can’t keep the moratorium in place forever. 

“Since we first imposed the moratorium on March 16, 2020, we have warned repeatedly that this moratorium is not sustainable indefinitely,” SCC members wrote in their ruling. “The mounting costs of unpaid bills must eventually be paid, either by the customers in arrears or by other customers who themselves may be struggling to pay their bills. Unless the General Assembly explicitly directs that a utility’s own shareholders must bear the cost of unpaid bills, those costs will almost certainly be shifted to other paying customers.”

Commission members said this would be the last extension for the cutoffs, adding it was time for the General Assembly to come up with a solution. The Assembly, they pointed out, has been in a special session since Aug. 18 and yet a utility plan only passed the Senate on Wednesday. Regardless of what happens, commission members wrote, the General Assembly has two weeks to figure it out. 

“The Commission, however, will not extend the moratorium beyond October 5, 2020,” they added. 

Commission Offers Some Recommendations

The concern for SCC members isn’t damage to big companies like Appalachian Power or Dominion. Both groups are large enough to absorb the loss. The SCC’s latest report on Dominion, for example, found the company overcharged customers by $502 million from 2017 to 2019. With that in mind, SCC asked the General Assembly to remember the smaller groups. They don’t have the same ability to absorb losses, SCC members wrote in their ruling

Also in the ruling, the commission laid out a series of things they did to help struggling customers. First, they ordered all utilities to offer customers an extended payment plan up to 12 months. Second, they required companies waive all late fees for anyone in an extended payment or other good-faith repayment plan. The companies also have to submit quarterly reports to the Commission. Those reports will detail the current number and status of all repayment plans.

“Customers shall continue to be protected from service cutoffs as long as they are current in such plans or have entered other good-faith repayment plans with the utility,” commission members wrote. 

The odd part is the commission’s orders are nearly identical to the bill that just passed the Virginia Senate this week. SB5118 requires every utility to design an emergency debt repayment plan. There was one difference, as the bill “requires the Commission to allow for the timely recovery of certain costs resulting from an [emergency plan] for jurisdictional utilities.” 

Specifically, the bill would let companies raise their base rates to cover the cost of setting up emergency plans. While the bill passed the Senate 24-12 on Wednesday, it’s unclear when a debate could happen in the House. Currently the full House has no scheduled meetings over the next two weeks.

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