'We need people to stay alive.' Utility disconnections on hold during COVID-19 pandemic
AZTEC — Utilities faced with high numbers of customers unable to pay their bills expressed concerns about the financial impact of a moratorium on residential disconnections amid the ongoing public health emergency.
The New Mexico Public Regulation Commission approved rule changes allowing the regulators to issue orders suspending disconnections of residential customers during a public health emergency. The new rule goes into effect in November. Additionally, the PRC unanimously approved issuing an order that will be effective starting Nov. 10 placing a moratorium in effect through Jan. 6.
When the pandemic hit in March, the PRC was limited to a short emergency rule suspending disconnections, which expired in August. The PRC regulates investor-owned and rural cooperative utilities, but does not have regulatory authority over municipal-owned utilities. Some of the utilities it regulates include AV Water Co., New Mexico Gas Company, El Paso Electric and Public Service Company of New Mexico.
Georgette Allen, a spokeswoman for the city of Farmington, said Farmington Electric Utility System is not disconnecting customers who are unable to pay their bills at this time and will be offering payment plans to those customers. People can also apply for assistance through the Low-Income Home Energy Assistance Program and the nonprofit ECHO, Inc., which oversees a utility assistance program in Farmington.
“FEUS encourages customers to pay what they can at this time so their bills are not as high when disconnections resume,” Allen stated in an email.
Byrd dissents to PRC rule regarding utility disconnection moratoriums
PRC Commissioner Jefferson Byrd cast the sole dissenting vote regarding the new rule that allows the commission to issue orders preventing utility disconnections.
“Far too often I’ve seen things pass under the guise of ‘we know it’s not perfect, but we’ll fix it in the future,’” he said, explaining his vote.
Byrd argued that the commission should fix it now rather than in the future.
Prior to the vote, he expressed concerns that a moratorium on disconnects could lead to a decrease in bill payments that would ultimately cause small utilities in the state to close their doors. He pointed out that no one knows how long the pandemic will last, and, if it goes on for another year it could destroy small companies.
“If they go under, where are you getting your water from, where are you getting your gas from, where are you getting your electricity from if you don’t have a company to deliver it,” Byrd said.
Commissioner Cynthia Hall said she sympathizes with Byrd’s sentiment, however the flexible rule could allow the commission to examine each utility’s situation individually.
PRC General Counsel Judith Amer said orders issued under the new rule could allow the commission to specify that utilities could apply waivers or require that utilities work out payment plans. The initial order under the rule would allow the commission time to work out those details.
Commissioner Valerie Espinoza emphasized that people who can financially make payments should at least make a small payment as a good faith effort to help keep utilities going.
Debt could pile up for customers unable to pay
Customers should also make payments to avoid being in a lot of debt when the moratorium is lifted. Several utilities expressed concerns that customers who are not paying their bills due to the moratorium could see an insurmountable amount of debt by the time the pandemic is over.
“When there’s a moratorium, people just tend not to pay,” said Mark Fenton, executive director of regulatory policy and case management for Public Service Company of New Mexico.
And Joe Garibay, director of customer care for El Paso Electric, said this will be even more of a problem for the customers that rely on the LIHEAP program that prevents shutoffs for nonpayment during the winter months. For those customers, some of them have not paid bills since November of last year.
“That is an enormous amount of debt for them to carry,” he said.
The fear that consumers could emerge from the pandemic burdened with unpaid utility bills was echoed by advocates as well. While the utilities argued that a moratorium would make it harder for them to convince customers to enter into payment arrangements or seek assistance from the various funds that are in place, advocates said there should be some form of ratepayer debt forgiveness.
Selma Gutierrez, a representative of the Santa Fe Mutual Aid network, highlighted that many of the people served by her network were not eligible for federal financial aid, such as stimulus checks, due to their immigration status. At the same time, a lot of them have lost their income and are struggling to get by. She said even before COVID-19 approximately 400,000 New Mexico residents were struggling to pay their utility bills. That has only worsened during the pandemic and the infection rates are once again spiking, which she said could lead to stricter public health orders.
The New Mexico Office of the Attorney General supported the moratorium. Gideon Elliot, who represented the attorney general’s office during the hearing, said the priority is to make sure New Mexicans can comply with the public health orders the governor could issue in the future, which might include requiring that people stay at home. He said the short-term risk outweighs the long-term harms that could be created by the moratorium.
“We need people to stay alive if they are going to pay those bills,” Elliot said.
Hannah Grover covers government for The Daily Times. She can be reached at 505-564-4652 or via email at firstname.lastname@example.org.