The Maryland Public Service Commission issued an order last week that prohibited utility companies from turning off anyone’s electricity, gas or water through November 15, amid massive job losses caused by the COVID-19 pandemic. The action was designed to give customers time to seek assistance in catching up on past due utility bills and to slow the runaway growth of utility debt across the state.
We strongly urge consumers behind on their bills to work out payment arrangements now rather than later. Consumers shouldn’t wait until after termination notices start to go out on October 1. It is also the time to apply for utility benefits while funding is available — and there is money available for customers struggling with household expenses.is
In the midst of this pandemic, the commission is charged with the nearly impossible task of balancing the needs of utility customers who rely on these essential services with the need of the utilities to remain economically viable and meet their mandate to provide safe and reliable service. Our actions will begin to address the harm and cost burdens that are accruing to all Maryland ratepayers.
The magnitude of the problem we are facing was clear to everyone who participated in a recent PSC hearing. During the moratorium period, unpaid past due balances on utility bills have doubled and now amount to hundreds of millions of dollars. By the end of this year, we’ve heard that this utility debt could double again. We cannot avoid our responsibility by allowing the arrearages to grow out of control any further.
Make no mistake, this situation is akin to a runaway train, with past due balances growing by millions every month. This presents a mounting crisis where some customers may never be able to pay their balances. Much like the pandemic, we need to act to flatten this curve.
Having hot water to wash our hands, running the air conditioner to shelter from stifling heat and soon, heating our homes in the winter, are absolutely critical needs for the health and safety of our citizens. During the hearing, we heard from a utility that is already experiencing cash flow problems resulting from nonpayments, to the detriment of its financial health. However, it is paramount that we must also protect the well-being of utility customers during this time when more people than ever are working and schooling from home.
The commission has directed utilities to reach out to their customers to let them know about utility, state and community resources that are available to assist those who are unable to pay their bills due to the ongoing COVID-19 pandemic, and to keep customers in service if they enter into a payment arrangement.
Officials with the Office of Home Energy Programs (OHEP), under the Maryland Department of Human Services, testified that over $170 million in assistance is now available. Likewise, BGE officials said that the Maryland Fuel Fund also has available financial help. Surprisingly, these aid programs have seen a drop in applications. Customers need to reach out. There shouldn’t be so much aid sitting unclaimed during a period of such great need. These programs stand ready to begin processing applications and providing benefits.
In addition to termination notices going out in October, the PSC order also established that:
- Residential customers in arrears will have 45 days from receipt of a notice to work out a payment plan with their utility or to apply for energy assistance programs. Customers who take either action would not have service disconnected.
- Utilities must offer a minimum payment plan of 12 months to anyone who asks for one (or 24 months for those customers receiving energy assistance from OHEP).
- Utilities cannot require a down payment or deposit as a condition of beginning a payment plan for any residential customer, including both current and new customers.
The PSC does not regulate some other utilities, including cable, wireless phone, internet, and municipal water and sewer agencies. We encourage these utilities to consider establishing similar transition plans for their customers if they have not done so already.
Solutions for a tough problem are not easy, but we believe that our comprehensive and balanced decision serves the public interest and is the necessary first step toward addressing this growing crisis. We urge customers to take action now to avoid an even worse debt crisis down the road.
Jason M. Stanek (email@example.com) is chairman of the Maryland Public Service Commission.