By Dan Shea
As millions of Americans face financial uncertainty due to the national coronavirus response, policymakers in many states are acting to inject a measure of stability by ensuring no one loses access to essential services, such as electricity, gas or water.
At least 45 states and the District of Columbia have moved to suspend utility disconnections for nonpayment due to financial hardship experienced as a result of the emergency response. Twenty-four states and D.C. have established mandatory moratoriums on disconnections, while the remaining 21 states requested utilities voluntarily suspend disconnections.
While most of these orders and requests have been issued by governors and utility regulatory commissions, state legislatures have also been active in addressing disconnects, with at least 10 states and the District of Columbia introducing legislation to this effect. Of those, Alaska, Maine and Washington, D.C., have enacted legislation.
In many cases, these bills would either suspend utility disconnects outright and outline how utilities and customers ought to proceed, while other bills grant governors additional power to suspend disconnects if they deem so necessary.
Alaska’s SB 241 falls into the first category. It prohibits electric, natural gas, water and telecommunications companies from disconnecting service to customers affected by the economic slowdown—though it does not relieve the customer of their obligation to pay for the services received. Customers must provide the utility with a signed statement of financial hardship and negotiate a repayment plan with the service provider, which is prohibited from charging interest or late fees.
Maine’s SB 789 is an example of the second approach—granting the governor or other state agencies authority to suspend disconnects to address the financial impacts of the emergency.
New York’s SB 8140, on the other hand, would provide rental assistance to people struggling to make ends meet during the crisis. The bill is currently pending before the legislature, but if passed, anyone who qualifies for rental assistance under that program would have their utilities paid in full throughout its duration.
The industry has also taken steps to assist consumers, including many electric utilities voluntarily suspending disconnects for nonpayment until the crisis has passed. It is unclear, though, how extensive the losses to utilities will be. Not only will there be unpaid utility bills, but electricity and energy demand have dropped as well, meaning that revenues will take a hit on multiple fronts. The U.S. Energy Information Administration factored the COVID-19 response into its short-term energy outlook and predicted steep declines in demand from commercial and industrial sectors. The EIA anticipates that both sectors will see an overall 2020 sales decline by more than 4% due to the coronavirus.
These losses are often dealt with through state utility regulatory proceedings, but legislatures may decide to take up the issue as well. Alaska’s bill, for example, guarantees utilities the right to recover costs through state regulatory agencies—meaning that any outstanding payments could ultimately be recouped through socialized rate increases.
Dan Shea is a senior policy specialist with NCSL’s Energy Program.