With the federal, state and local requirements to shelter in place and that are closing down non-essential business activities, we are all left with uncertainty on many levels. One such concern is the potential impact on vital utility services, such as electricity, gas and water service.
The uncertainty regarding these services primarily centers around two questions.
Will there be an interruption in the delivery of these vital services due to operational difficulties?
The answer to the first question is relatively easy. All states have statutory and regulatory requirements that vital utility services such as electricity, gas and water must be provided on a continuous, uninterrupted, basis. Interruptions of these services have normally only occurred due to “acts of God,” such as extreme weather conditions (i.e., hurricanes, tornadoes, severe thunderstorms or earthquakes). In these instances, the utilities have worked diligently to restore services as soon as possible after the weather events have subsided.
The current coronavirus crisis does not present any of these conditions. Accordingly, interruptions in service are unlikely to occur, unless there is such widespread infection that there is an extreme shortage of labor at these utilities and they are unable to operate normally.
Even this condition would likely not cause a significant interruption in these services, particularly electricity, due to the fact that so much of the delivery of the services is computer-controlled.
Will service to individual end-users be disconnected due to non-payment or delayed payment?
The second question presents a few more issues. Due to the economic impact on businesses (small and large) and individuals resulting from government orders to shutdown, or significantly reduce business operations, many businesses may face difficulty meeting their monthly financial responsibilities, including payment of utility services. As a result, these businesses and their employees may face difficulties paying their monthly utility bills.
In most, if not all, states, utility companies have the power to suspend or disconnect service upon non-payment. In some states, disconnection can occur within 30 days or less of the due date. In other states, the customer may be granted slightly longer. In either case, non-payment can result in disconnection.
Electric and Gas Utilities
As a result of the coronavirus crisis, several states have restricted a utility’s ability to disconnect vital services to customers impacted by the crisis.
In Texas, for example, the Public Utility Commission (Commission), which regulates electricity and water service in the state, issued emergency orders suspending disconnections and requiring Retail Electricity Providers (REPs) to offer deferred payment options to customers. The Texas Commission’s orders also creates an Emergency Relief Plan to protect the transmission and distribution utilities (TDUs) and the REPs from the economic impact of non-payments or delayed payments. The TDUs will be permitted to immediately implement a surcharge to fund the Plan.
Maryland has adopted a similar plan. Both the Texas and Maryland plans apply only to residential customers. Moreover, the Texas plan may require proof of unemployment or financial hardship.
Other states have likewise issued orders suspending payment-related disconnections. Thus far, the following states have ordered disconnection suspensions statewide: California, Colorado, Connecticut, Illinois, Iowa, Kansas, Kentucky, Louisiana, Maine, Massachusetts, Mississippi, New Hampshire, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Virginia and Wisconsin.
In addition, several states, local regulators and municipally-owned electric service providers have ordered disconnection suspensions. Updated information on the actions taken or not taken by states is available on the Energy Power Institute’s web page.
Many utilities, even without local or state prohibitions, have voluntarily agreed to suspend disconnects related to payment. Instead, they have agreed to provide deferred payment plans to qualified customers. These utilities include those members of the Edison Electric Institute (EEI), which is the trade association for investor-owned utility companies. EEI has members in all 50 states.
In many instances, water utility service is provided by a local municipal government. Many of these municipalities have issued orders/pronouncements that they are suspending disconnections during this crisis. A live update of the cities that have issued such orders/pronouncements can be found at Food and Water Watch.
On the federal level, several legislators are urging inclusion of a nationwide suspension of all utility disconnections, including suspension of late fees and reconnection fees, as part of a future COVID-19 relief package. We will see whether a nationwide prohibition is adopted. Until then, we will have to look to the state and local governments and/or the utilities.
If you have questions regarding the policies of the utility company and/or regulatory authority in your geographic area, you should contact the utility company. If you do not get an adequate or satisfactory response, you should contact the consumer information agent for the state regulatory commission or municipal regulator for the particular utility service at issue. Much of this information can be obtained on the websites for the state agency, utility or local government.
Our team will continue to share the latest developments and provide insights on the spread of coronavirus and its impact across sectors including the utilities and infrastructure sectors.