SCC Extends Ban on Utility Service Cut-offs to August 31

Utilities

JUN 12, 2020

RICHMOND – The State Corporation Commission (SCC) has extended the moratorium on service disconnections for utility customers due to unpaid bills caused by the COVID-19 public health emergency. The SCC order extends the ban through August 31, 2020 and gives the General Assembly time to address the economic impact of the crisis on utility customers.

During the crisis period, electricity, natural gas, water and sewer utilities regulated by the SCC must offer extended payment plans with no late fees or reconnection charges to residential and small business customers whose unpaid bill amounts are the result of COVID-19 issues.

Reacting early to the crisis in mid-March, the SCC ordered a 60-day ban on service cut-offs. In a mid-May order, the ban was extended an additional 30 days through June 15.

In explaining the need for an additional extension, the SCC stated, “Our purpose since our original order on March 16th imposing a moratorium on service shut-offs has been to protect Virginia's utility customers who, through no fault of their own, have been the victims of the devastating economic consequences of the COVID-19 pandemic.” 

The Commission added, “While we have acted promptly throughout this crisis to protect customers unable to pay utility bills due to the COVID-19 crisis, the only truly sustainable solution is government action beyond utility regulation in the immediate short term and a restoration of economic health as soon as possible.”

On May 26, the SCC invited comments on whether the service cut-off moratorium should be continued and, if so, how to ensure that the costs of such an extension would not be shifted to other customers who may themselves be struggling to pay bills.

More than 300 comments were received. Commenters included 58 members of the General Assembly, the Governor of Virginia, and numerous utilities, organizations and citizens.

In the May 26 order, the Commission said, “The reality is that a moratorium on all service disconnections due to unpaid bills is not sustainable on an unlimited basis in the absence of programs to ensure that the growing costs of unpaid bills are not unfairly shifted to other customers.”

In approving the latest extension to August 31, the SCC said, “This additional extension will give the General Assembly and Governor time to address the economic repercussions of the COVID-19 crisis on utility customers, an effort alluded to in the letter …  from the 58 General Assembly members as well as several other commenters.” The Commission added, “We emphasize that utility regulation alone cannot adequately address what is a much broader socioeconomic catastrophe.”

The SCC will closely monitor progress on reducing bill arrearages and service cut-offs by requiring monthly reporting of key metrics, including data regarding trendlines and amounts of past due accounts, use of extended payment plans, trends of disconnection notices and disconnections for nonpayment, as well as monitoring relevant economic data.

In its latest order, the Commission wrote, “It is our fervent hope that the process of healing the economic damage caused by the COVID-19 crisis will continue. In particular, we hope that jobs and livelihoods will be fully restored … which includes the many Virginia small businesses which have incurred devastating damage.”

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Case Number PUR-2020-00048

Contact: Ken Schrad 804-371-9858