Utility Bill Relief: The General Assembly’s costly proposal

The economic downturn and job loss due to the COVID-19 lockdowns has left many Virginians unable to pay rent and utility bills. Accordingly, Governor Northam proposed a number of reforms to ease the burdens on the individuals and families in need. A part of this proposal would require Dominion Energy to cover the unpaid residential electricity bills using $320 million of its overcharged revenue.

The State Corporation Commission (SCC) found Dominion earned $503 million above authorized levels over the past three years. There has been a dispute over how to reallocate these funds and Northam’s plan would use them for economic relief. Specifically, bills more than 60 days overdue after September 30th would be forgiven. Additionally, the proposal sets aside money for overdue bill forgiveness 90 days after the moratorium on cutting service is eventually lifted and requires utilities to offer repayment plans for unpaid bills without interest or late fees.

The Governor urged the General Assembly to include his proposal in the budget amendments. So far, amended budgets in both chambers include a plan for utility bill relief and repayment, however those proposal have potentially disastrous and expensive implications.

The House and Senate have proposed using $120 million from federal COVID-19 relief funds to assist with unpaid bills, rather than using Dominion’s excess profits. They each have also proposed a similar required repayment plan, though the House’s proposal would only be for bills 30 days overdue.

This may seem like a reasonable alternative, however, SB 5118, which passed the Senate two weeks ago, requires the SCC to allow Dominion to recover costs incurred due to the repayment plan through its base rate or a rate adjustment clause.

Even with proposed forgiveness and a repayment plan, this proposal would still result in many households unable to pay current or overdue bills. The requirements of SB 5118 would result in any cost Dominion incurs being reallocated to ratepayers!

The SCC warned as early as March of this year that, “[t]he mounting costs of unpaid bills must eventually be paid, either by the customers in arrears or by other customers who themselves may be struggling to pay their bills. Unless the General Assembly explicitly directs that a utility's own shareholders must bear the cost of unpaid bills, those costs will almost certainly be shifted to other paying customers.”

Additionally, in response to the General Assembly’s proposals, Attorney General Mark Herring sent a letter urging support instead for Governor Northam’s plan. His letter explains the Governor’s plan would provide far more relief to Virginians. He writes, “[t]he Commonwealth should require this state-sanctioned monopoly, that earned exceedingly more over the last three years than authorized, to share the economic burden brought on by this pandemic with its shareholders and provide Virginians with the relief that they so desperately need right now.”

The budget has yet to be finalized and SB 5118 is still in the House Appropriations Committee waiting for House approval.

Now is the time to tell your legislators to protect all rate payers! In the coming days, the General Assembly will consider each proposal and work to come to a consensus. Call your Delegate and Senator today and ask them to support Governor Northam’s plan for utility bill relief!