PLEASANTON, CA – If there is an additional measure of pain inflicted on residents of Pleasanton by the coronavirus pandemic beyond unemployment and premature deaths, this may be partially reflected in the number of unpaid utility bills.
As the pandemic escalated, the number of customers unable to afford electricity, gas, water, and services provided by investor-owned, public and private utility companies in the State has also intensified.
In Pleasanton, one in 25 Pacific Gas & Electric Co. customers – about 1,200 in total – were at least three months late paying their bills in April, according to figures recently released by the California Public Utilities Commission (CPUC ), which regulates many electric and gas utilities.
These people could be in the dark from July 1, when a moratorium to protect utility customers who could not afford to pay their bills will expire. The ban was imposed last year by the CPUC and affects both residential and commercial utility customers.
It is not known whether the ban will be extended.
The state’s four largest investor-owned utilities (IOUs) – PG&E, Southern California Edison, San Diego Gas & Electric, and Southern California Gas serve some 17 million customers. According to regulatory reports, nearly 25% of residential customers for these utilities had overdue bills in April, including 1.3 million four months or more overdue.
Collectively, these residential customers owed utilities nearly $ 1.4 billion. In addition, 133,837 small business customers owed an additional $ 125.9 million.
Municipal public services affected
When municipal and private electricity and gas utilities are included, thousands of their customers are thought to have unpaid bills as well. Although the two largest municipal utilities in California – the Sacramento Municipal Utilities District and the Los Angeles Department of Water and Power – have not communicated the precise number of overdue customers and what they owe, the amounts are being considered. as substantial.
Data compiled by the CPUC from just five of the state’s smallest electricity and gas utilities show that more than 25,000 residential customers have racked up more than $ 8.4 million in overdue bills and some 4,243 small business customers collectively owe $ 2.6 million.
A utility, Bear Valley Electric Company, which serves the rural area surrounding Big Bear Lake in the San Bernardino Mountains, reported the highest delinquency rate of all small investor-owned utilities with 88% of its customers low-income, 68% of its other customers and all of its small business customers behind on their bills.
California water agencies are in the same boat. A survey of community water systems conducted late last year by the California Water Resources Control Board found that more than 1.12 million residential customers were behind on their payments. Of the 579 systems surveyed, the 537 that responded said about 459,000 – or 41% of their delinquent customers owed between $ 300 and over $ 1,000.
Matt Williams, spokesperson for the California Municipal Utilities Association (CMUA) which represents 72 utilities providing electricity and water services, or both, told Patch although the utilities are not subject to the moratorium imposed by the CPUC on disconnections for non-payment. of invoices, all members of the organization voluntarily stopped disconnections in spring 2020.
These utilities currently have over $ 300 million in unpaid electricity bills, Williams said.
Now, with the economy recovering and California fully opening up on June 15, the state’s utilities want their money.
Last month, a CPUC administrative law judge, after reviewing comments from utilities and other interested parties, released a proposed ruling outlining possible repayment plans for overdue customers that could be reviewed and voted by the entire Commission on June 24 after a 30-day public comment period.
Since February, when it began examining the extent of overdue utility bills and ordered utilities to submit plans to resolve overdue accounts, the CPUC has received “bridging” repayment plans from officials. four largest utility companies in the state, as well as detailed commentary from smaller utility companies, consumer groups and the Commission’s own Public Advocates Office dealing with how overdue accounts should be handled when utilities are authorized to resume disconnections for non-payment.
Much of the debate has centered on developing a fair relief package, recognizing the structure of utility rate plans where low-income residential and special customers fall into three categories:
- The California Alternate Rates for Energy (CARE) where clients of many public assistance programs such as Medi-Cal, School Free Lunch Program and Food Stamps enjoy discounts of up to 35% on electricity bills and 20% on natural gas bills;
- The Family Electric Rate Assistance Program (FERA) where the household income is slightly higher than that of the CARE qualifications which benefit from an 18% reduction on electricity bills;
- The Medical Baseline Program (MBL) requires utilities to provide increased amounts of electricity at base rates for residential customers with special medical needs or life support equipment.
The ability of these customers to reimburse overdue invoices will vary by rate category. The proposed solutions range from the total cancellation of unpaid bills incurred by low-income households, to the partial cancellation for all customers of various subsidies, some of which would be provided by the utilities themselves.
One of the state’s leading consumer advocacy groups, The Utility Reform Network (TURN), told the Commission it must recognize that the pandemic has had a disproportionate impact on different segments of the population and that the The central goal in crafting any response should be “to provide customers with a way to afford future utilities without running the risk of disconnection caused by debt incurred during the pandemic.” ”
Arguing that the pandemic is a crisis affecting all members of the community, TURN said shareholders of utility companies should also contribute financially to crime relief efforts.
“It would be unreasonable for shareholders’ profits to be shielded from the crisis,” TURN said, suggesting that utilities could later see their contributions repaid with federal or other funds.
CPUC’s own Public Advocates Office said it believes the Commission should forgive all residential arrears, and if not, at least half of the amounts should be written off. At the very least, PAO argued, the amounts should be reduced to $ 500 that customers could repay over a one-year period.
When other bills such as overdue rents are factored in, “many customers will not be able to pay the arrears on top of paying their current energy bills, leaving them exposed to service disconnections.” , said PAO.
The Big Four have opposed mandatory shareholder contributions to alleviating customer delinquency, with several suggesting that federal and state funding sources should be used instead.
However, in rendering her preliminary ruling last month, CPUC administrative law judge Camille Watts-Zagha rejected transition plans that did not contain automatic reimbursement programs, saying they did not ” proposed significant incremental steps for customers to start dealing with the accumulated debt, “while noting that SoCal Gas has already automatically enrolled customers in a payment plan and provided them with a way to opt for the moratorium extension disconnection.
Utilities opposing mandatory automatic payment plans have said they prefer to customize repayment terms based on negotiations with individual customers.
Watts-Zagha rejected this approach saying that “from a utility perspective, this may be a reasonable approach, but it is not clear that this approach is reasonable for customers.”
Instead, the proposed decision by Watts-Zagha would require utilities to automatically enroll every residential customer with overdue bills for more than 60 days into a 24-month payment plan, subject to certain applicable conditions. to specific utilities, customers missing more than two payments removed. of the plan.
Small businesses, which have been particularly affected by the pandemic, will also receive relief if they have unpaid utility bills at least 60 days late and meet other conditions depending on the communities in which the business is located. . These customers will be able to pay off unpaid debts over time and if they are enrolled in a payment plan, their service cannot be interrupted if their payments are up to date.
Possible state aid
Williams, spokesperson for CUMA, said its members “continue to work with the Newsom administration and regulatory agencies on reimbursement methods as well as sources of funding to help customers pay their bills. ‘water and electricity’, noting that state budget proposals currently under consideration by the legislature would provide $ 1 billion to help customers of municipal electric utilities and the public water agency to pay their bills, with a separate governor’s proposal allocating $ 2 billion in relief evenly split between overdue water and electricity bills.
Several utilities contacted by Patch said they are reviewing the preliminary ruling and will wait for the Commission’s final decision before commenting.
The impact of any form of shareholder contribution to customer debt relief on the profits of the four major publicly traded utilities is unknown.
Although PG&E suspended dividend payments almost four years ago due to huge wildfire liabilities and subsequent bankruptcy proceedings, the others have continued to operate as usual.
According to reports filed with the United States Securities & Exchange Commission, over the past year, shareholder dividends have continued to flow unabated. Since the lockdown began in March last year, Southern California Edison has paid $ 1.7 billion in dividends to Edison International – its parent company – which in turn has paid out $ 1.2 billion to its shareholders. Southern California Gas and San Diego Gas & Electric, two subsidiaries of Sempra Energy, paid $ 325 million in dividends to the parent company.
– Special Patch Correspondent Bob Porterfield contributed to this report