Providing Reliable Service in Uncertain Times

The State of Public Power II

Gov. Roy Cooper’s stay-at-home order and federal social distancing guidelines apparently are working to flatten the curve in North Carolina—state health officials say the spread of the virus is slowing—and public power utilities are doing their part by keeping the lights on in people’s homes. Even those who can’t or don’t pay their bills on time are able to live in their homes without concern that they will need to leave because the home has no power.

Some communities have decided to eliminate service disconnections to businesses as well. Greenville Utilities Commission CEO Tony Cannon said that GUC leaders took steps to slow the spread of Covid-19 in mid-March. One of those steps was eliminating all service disconnections for nonpayment for all customers.

After the governor directed all utilities in the state to suspend service disconnections beginning March 31, Cannon wrote that “we did this [on March 18] not just for residential customers as is now required by the governor, but for businesses too. We hoped that doing this would help our community get through this crisis.”

Communities helping their own is what public power is all about. But everyone knows that continuing to deliver a product regardless of whether a customer pays for it is not a sustainable business model.

“We recognize that our communities are providing an essential service during this pandemic crisis, and doing that comes at a cost,” said Drew Elliot, who works in government relations for ElectriCities. “That’s why we’re already having conversations with state and national leaders to let them know that, at some point, some (if not all) of our communities will need help recovering from the financial impacts of these policies.”

ElectriCities is not alone in calling for aid to those on the front lines of pandemic response. On April 9, Joy Ditto, president and CEO of the American Public Power Association, wrote to Congressional leaders that she was “extremely concerned about the financial effect of this crisis on public power utilities.”

“The pandemic is creating a double-edge challenge for these critical providers: increased costs and reduced revenues,” Ditto wrote. “Increased costs as we take extraordinary measures to ensure that ‘the lights stay on,’ but decreased revenues as commercial, industrial, and institutional use declines and delinquency in payments increase.’”

All customers are ultimately responsible for all the energy they use, so a certain portion of the revenue loss will be made up in the long run. Utilities also know that another portion will be lost forever, but what no one can tell is 1) what percentage of revenue will be delayed, 2) what portion will be lost, and 3) how long the pandemic will last. That is why utilities are finding ways to remind customers that they need to pay what they can when they can.

“Bills are not being waived, but we are allowing customers additional time to pay,” a Fayetteville Public Works Commission webpage explains. “We do encourage you to call and arrange payment plans if needed because the longer payments are delayed and services continue, the more the amount owed becomes and it can become more difficult to pay the larger amount.”

Uncertainties and worries abound for businesses and residents, but public power communities will continue to manage through these times with a commitment to customers: reliable electricity is not one of the things they need to worry about.