Utility regulators raise concerns about federal proposals on service disconnections, debt collection
Some proposals under consideration in U.S. Congress would set federally mandated moratoriums on electric and gas utility debt collection, service disconnections, reconnection fees and rate hikes amid the coronavirus pandemic, but utility regulators have argued that states should have jurisdiction over such actions.
“While the congressional desire to assist customers by curtailing utility collection and disconnection actions during the health and economic crisis brought about by COVID-19 is laudable, we strongly urge that you not impose prescriptive federal mandates on state-regulated utilities,” Brandon Presley, president of the National Association of Regulatory Utility Commissioners (NARUC), wrote to congressional leadership on April 20.
For example, certain provisions being considered under the Take Responsibility for Workers and Families Act, H.R. 6379, would take federal action regarding natural gas service disconnections and related payments.
In addition, a U.S. Senate resolution introduced by U.S. Sen. Edward Markey (D-MA) on March 30 would set the sense of Congress that states and gas and electric utilities should issue a moratorium on gas and electric service disconnections, late fees, reconnection fees, rate hikes, and other penalties for all consumers as a result of the ongoing COVID-19 pandemic. Specifically, the resolution states that actions be taken by each state and utility to guarantee that no electric or natural gas service to consumers is terminated; reasonable efforts are made to safely reconnect those consumers that lost service; no consumers are charged for those reconnections; late fees and other penalties are waived; and that no increases in cost-of-service are borne by consumers.
“This is a national life-or-death emergency, and every single state and utility must take action now to keep people healthy at home and keep their lights on,” said Markey, a member of the Senate Environment and Public Works Committee.
In the letter from NARUC, Presley stated that Congress “be aware that state utility commissions and/or the entities they regulate have already established termination moratoria and collection policies for their electricity and natural gas ratepayers in all 50 states in response to this emergency. For Congress to engage now seems akin to coming to the table to address a problem after it has already been handled and resolved.”
The organization further dismissed a federal one-size-fits-all approach as severely restrictive, with the potential to eliminate the ability of state commissions and utilities to work with customers on payment plans. This, it argued, would end up complicating state efforts to guide actions during the crisis and its aftermath, and therefore should be rejected.
Many utilities across the country have already voluntarily set aside disconnects and certain other policies during the pandemic. For example, the Edison Electric Institute (EEI), a trade association representing all U.S. investor-owned electric companies, announced in March that its member companies suspended electricity disconnects for non-payment nationwide.
“To help reduce the impact of the crisis on the most vulnerable, EEI members are committed to working collectively with our state public utility commissions to appropriately suspend power shut-offs for non-payment,” Tom Kuhn, President of EEI, said at the time.
Others, like the American Gas Association, have similarly committed to working with state public utility commissions on ways to appropriately suspend natural gas service disconnections.
At least one state commission has also spoken out against proposed federal mandates.
The Nebraska Public Service Commission (NPSC) took its concerns directly to its state’s congressional delegation.
“The matters regarding payments and mechanisms in use by local distribution companies are under the jurisdiction of the NPSC, and as state regulators, we believe that we are in the best position to work with customers and utilities on the best policies for Nebraska,” the commissioners wrote in an April 21 leader to the Nebraska lawmakers.
While lauding efforts being undertaken to respond to COVID-19, the commissioners noted that they had issued a moratorium in their own state that extends until the end of June. For federal authorities to step in with federal legislation would preempt longstanding state jurisdiction without providing any added benefit to consumers, potentially doing more harm than good, they argued.
“Our main concern is the federal legislation steps in and ties the hands of state regulatory Commissions, stopping us from tailoring our programs and pandemic response to our local situation,” the commissioners said. “Instead of allowing us to do what is in the best interest of Nebraskans, HR 6379 imposes a one-size-fits-all solution for all states, and places arbitrary restrictions on utilities.”
