Many utilities will not disconnect water during the coronavirus emergency. But residents are still required to pay their bills when it’s over.
By Brett Walton, Circle of Blue
Hundreds of utilities and dozens of state governors and regulatory agencies have responded to the coronavirus emergency by suspending the practice of shutting off water for residents who are late paying their utility bills.
The governors of California, New Hampshire, New Jersey, and Ohio are among those who ordered public utilities to keep water flowing to homes during the pandemic for health reasons. Public service commissions in Illinois, Kentucky, Louisiana, Maine, and Wisconsin that oversee investor-owned utilities have acted to prohibit shutoffs as well.
These orders also direct utilities to eliminate late fees during the emergency period.
But what about after the emergency period? Even though many utilities will not be shutting off water in the coming weeks and months, household water bills will continue to arrive. Residents are expected to pay those bills after the emergency orders are lifted. That could pose problems down the road for both individuals and utilities, argues Greg Pierce, associate director of the UCLA Luskin Center for Innovation.
“It’s going to be a massive challenge to recover the revenue from households that aren’t paying bills,” Pierce, who focuses on drinking water issues, told Circle of Blue. “Low-income residents are not going to have any greater ability to pay six months of bills six months from now than they are today.”
“Utilities,” Pierce added, “will have to expect less than one hundred percent repayment. They’re going to have to eat some of the loss.”
Utility leaders acknowledge that the payback periods will, at minimum, be lengthened. They are also scouring their billing data to develop scenarios for how many customers might not pay on time and how that will affect utility finances.
Many of the executive orders resemble the language used in the decree issued by California Gov. Gavin Newsom:
“Nothing in this order eliminates the obligation of water customers to pay for water service, prevents a water system from charging a customer for such service, or reduces the amount a customer may already owe to a water system.”
In short: the water will not be turned off, but the bills will keep coming and previous debts still stand.
The order from New Hampshire Gov. Chris Sununu states that once the emergency is over, utilities must give residents at least six months to repay any debts that accrued during that period. Utilities are not allowed to charge late fees, either.
Josh Schimmel is the executive director of Springfield Water and Sewer Commission, which serves about 250,000 people in western Massachusetts. The utility already announced it would halt shutoffs, but Schimmel is still assessing the post-emergency response.
Schimmel said the typical repayment period for customers with overdue bills is about 12 months. That time frame will have to be adjusted, he said.
“I don’t see how we can do that with people out of work,” Schimmel told Circle of Blue.
Springfield is one of the poorest cities in Massachusetts, with a poverty rate nearly three times the state level. Schimmel said that the utility may extend its repayment period for up to three years.
The Illinois Commerce Commission, which regulates that state’s investor-owned utilities, required those companies that provide water service to expand and extend repayment plans for customers during and after the emergency.
Utility Services of Illinois, one of the regulated utilities, said that it will extend the term of repayment plans to 18 months.
Members of Congress, meanwhile, are weighing various proposals to inject short-term assistance to utilities and their customers.
A letter signed by 80 House Democrats and sent on April 7 to House and Senate leaders suggested at least $12.5 billion in direct aid to utilities to reimburse revenue lost due to unpaid bills, provide customer assistance, forgive debt, and reconnect water service to homes.
House Democrats have also floated the idea of a federal customer assistance program for water bills that would be modeled after a similar program for home heating costs.
Brett writes about agriculture, energy, infrastructure, and the politics and economics of water in the United States. He also writes the Federal Water Tap, Circle of Blue’s weekly digest of U.S. government water news. He is the winner of two Society of Environmental Journalists reporting awards, one of the top honors in American environmental journalism: first place for explanatory reporting for a series on septic system pollution in the United States(2016) and third place for beat reporting in a small market (2014). He received the Sierra Club’s Distinguished Service Award in 2018. Brett lives in Seattle, where he hikes the mountains and bakes pies. Contact Brett Walton