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When Utility Bills Go Unpaid: Lowering Bills by Lowering Consumption (Part III)

By Andrea Jakubas

This post is the final part of a three-part series discussing three avenues for reducing the “uncollectible burden”–the inability of people to pay their utility bills during the COVID-19 pandemic. Part one examined government grants and policy; part two looked at incentivizing and changing consumer bill-paying behavior. Part three, below, discusses clean energy initiatives that promote efficiency, reduce consumption and use cleaner forms of energy.

In pre-pandemic times, if utility customers did not or could not pay their bills, the company could generally disconnect their service. But in response to the COVID-19 emergency, many states have issued moratoria against such utility shutoffs for nonpayment,[1] recognizing both that utilities are vital to human health and well-being and that customers are facing daunting levels of unemployment and decreased ability to pay their bills.

These shutoff moratoria are necessary but raise an additional problem: how bills will ultimately be paid. Generally, uncollectible accounts are “socialized” across utilities customers. The rate paid covers not only the customer’s direct consumption but also administrative costs, including other customers’ nonpayment. As the pandemic—and orders against utility shutoffs—drag on, the mountain of “uncollectible” debt will continue to grow, and there are no clear answers on how (and by whom) bills will ultimately be paid.

Programs that reduce consumption, or that use non-carbon fuel sources are doubly advantageous: they can make bills more affordable for customers and increase the likelihood the bills will be paid, and can reduce carbon emissions.

Distributed solar

Energy generated in a dispersed manner or by customers, rather than at a central location (like a nuclear power plant), is “distributed generation.”[2] The most common distributed generation method is home solar panels. But many customers, especially those who are already struggling to pay their bills, will have trouble investing in panels—though some companies offer the option to lease panels.[3]

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When Utility Bills Go Unpaid: Changing Customer Bill-Paying Behavior (Part II)

By Andrea Jakubas

This post is part two of a three-part series discussing three avenues for  reducing the “uncollectible burden”–the inability of people to pay their utility bills during the COVID-19 pandemic. Part one examined government grants and policy; part three will discuss clean energy initiatives that promote efficiency and reduce consumption. This post discusses how incentivizing and changing consumer bill-paying behavior could help address the uncollectibles problem.

In pre-pandemic times, if utility customers did not or could not pay their bills, the company could generally disconnect their service. But in response to the COVID-19 emergency, many states have issued moratoria against such utility shutoffs for nonpayment,[1] recognizing both that utilities are vital to human health and well-being and that customers are facing daunting levels of unemployment and decreased ability to pay their bills.

These shutoff moratoria are necessary but raise an additional problem: how bills will ultimately be paid. Generally, uncollectible accounts are “socialized” across utilities customers. The rate paid covers not only the customer’s direct consumption but also administrative costs, including other customers’ nonpayment.

As the pandemic—and orders against utility shutoffs—drag on, the mountain of “uncollectible” debt will continue to grow, and there are no clear answers on how (and by whom) bills will ultimately be paid.

Changing bill-paying behavior requires first that customers have at least some ability to pay their bills, but there are several options to help bills become more manageable.

Deferred Payment Arrangements

A deferred payment arrangement (DPA), for example, allows the customer to pay later for services used now. It does not waive the customer’s obligation to pay; rather, it allows them more time to pay their bills, often with at least part of the past due amount due each billing cycle.

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SEC Commissioner Calls for More Robust Climate Reporting

While the devastating effects of the global COVID-19 pandemic take center stage, another worldwide crisis “looms even larger than the pandemic and could have even more grave human and economic costs than those we have witnessed these last eight months.”[1]

Securities and Exchange Commission (SEC) Commissioner Allison Herren Lee addressed the threat of climate change on financial markets during her keynote remarks at the Practising Law Institute’s 52nd Annual Institute on Securities Regulation earlier this month.[2] Commissioner Lee—a Trump appointee—implored attendees to take climate change seriously, even while the crisis may appear to be an abstract threat to some.[3]

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Feds Pull Back Construction Permit After Environmental Justice Groups Sue

The U.S. Army Corps of Engineers (“Corps”) made a last-minute recall of a permit given to Formosa Plastics for the construction of a new petrochemical plant along the Mississippi River in St. James Parish, Louisiana.[1] The Corps explained in a recent court filing that “[d]urging its review of the permit, it has now come to the Corps’ attention that an element of the permit warrants additional evaluation.”[2] The motion came just a day before the court’s deadline for the agency to file its cross-motion for summary judgment.

Environmental advocacy groups and local residents had been pressing the Corps to deny Formosa the permit, arguing construction of the petrochemical plant would exasperate the public health concerns in St. James Parish.[3] The area is predominantly black and low-income; the per capita income is about 40% lower than the national average.[4]

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When Utility Bills Go Unpaid: A Growing Problem of COVID-19 (Part I)

By Andrea Jakubas

This post is part one of a three-part series discussing three avenues for reducing the “uncollectible burden”–the inability of people to pay their utility bills during the COVID-19 pandemic. Part one examines government grants and policy; part two will examine incentivizing and changing consumer bill-paying behavior, while part three will discuss clean energy initiatives that promote efficiency and reduce consumption.

In pre-pandemic times, if utility customers did not or could not pay their bills, the company could generally disconnect their service. But in response to the COVID-19 emergency, many states have issued moratoria against such utility shutoffs for nonpayment,[1] recognizing both that utilities are vital to human health and well-being and that customers are facing daunting levels of unemployment and decreased ability to pay their bills.

These shutoff moratoria are necessary but raise an additional problem: how bills will ultimately be paid. Generally, uncollectible accounts are “socialized” across utilities customers. The rate paid covers not only the customer’s direct consumption but also administrative costs, including other customers’ nonpayment. As the pandemic—and orders against utility shutoffs—drag on, the mountain of “uncollectible” debt will continue to grow, and there are no clear answers on how (and by whom) bills will ultimately be paid.

Pre-Pandemic Government Funding and Programs to Address the Uncollectables Problem

State and federal programs established before and during the pandemic have helped some customers reduce their debt.

Utility bill affordability was an issue long before the current pandemic, especially in lower-income homes. Now, during the pandemic, low-income individuals are more likely to have lost their jobs and are more concerned about being able to pay their bills, with only 23 percent of lower-income families reporting that they have enough emergency funds to last three months.[2]

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How the Biden Administration Can Use Executive Action to Advance its Energy and Environmental Policies

President-elect Joseph R. Biden faces a challenging road to inauguration day. But that road may be nothing compared to the to-do list waiting for him on January 21. The global pandemic and a struggling national economy are first-order priorities, but in addition to these emergent issues, energy and environmental policies were important topics for many voters during the election.[i]

Biden campaigned on a platform championing clean energy and environmental justice.[ii] Depending on the outcome of two senate runoff elections in Georgia, however, the president-elect may have to realize much of his administration’s climate and clean energy policies through executive action.[iii]

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The True Cost of Drought: Policy Vacuum Shows States are Unprepared for Climate Future

Climate change drives drought, fueling more intense wildfires and weaker crop yields that destabilizes local and national economies. But both the federal government and states lack comprehensive policies to manage, circumvent, or prevent these costly effects of drought.

From the West to the Northeast, 39 percent of the U.S. is experiencing “moderate to exceptional” drought, affecting more than 22 percent of the population.[i] As temperatures rise, so does the rate of evaporation – moving water from soil to the atmosphere and changing precipitation patterns. More moisture in the atmosphere leads to intensification of the water cycle, ultimately “making wet places wetter and dry places drier.”[ii]

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Aftereffects of 2010 Deepwater Horizon Oil Spill Continue to Threaten Gulf of Mexico Marine Life

More than 10 years after the Deepwater Horizon drilling rig explosion on the Gulf of Mexico, conservation groups continue to sound the alarm regarding its lasting effects.[i]

The BP-operated rig spilled an estimated 4.9 million barrels of oil, killing marine life and damaging the Gulf coast from Louisiana to Florida.[ii] A complaint filed on October 21 by conservation groups alleges that the federal government has violated the Endangered Species Act (ESA) and Administrative Procedure Act (APA).[iii] The National Marine Fisheries Service (NMFS), a federal agency tasked with protecting marine resources, is accused of issuing “an arbitrary and capricious programmatic biological opinion governing federally authorized oil and gas activities.”[iv]

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Complaint with FERC Points to Looming Battle Over Demand Response in Wholesale Markets

Voltus Inc., an energy resource aggregator, has filed a complaint against the Midcontinent Independent System Operator (“MISO”) with the Federal Energy Regulatory Commission (“FERC“).[1] The complaint takes issue with MISO’s recent order that allows states to opt out of FERC’s 2008 order allowing demand response programs in wholesale markets.[2]

Demand response programs give consumers the opportunity to substantially affect the electric grid by shifting their electricity usage from peak demand times to lower electricity use periods, thereby preventing the grid from overloading.[3] Demand response programs also pay consumers based on how much they reduce their electricity use once they have chosen an energy reduction plan.[4] However, MISO has allowed states within its territory to withhold energy resource aggregators from freely participating in the MISO wholesale market through its opt out provision.[5]

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Consent Decree Requires EPA to Comply with Clean Air Act Obligations

A California federal court recently approved an agreement between the United States Environmental Protection Agency (“EPA”) and the Center for Biological Diversity (the “Center”) that requires EPA to take affirmative steps to ensure that eight states have plans in place to reduce emissions from their oil and gas extraction areas as mandated by the Clean Air Act (“CAA” or “Act”).[i]

Emphasizing health hazards like asthma and reduced lung function that can develop in people who endure prolonged exposure to ground-level ozone (i.e., smog), the Center noted that the agreement will likely improve the health of residents who live closest to the extraction areas.[ii] The Center estimates that as many as 70 million people live in these areas and are at the greatest risk of exposure to harmful asthma-causing smog from oil and gas extraction operations.[iii]

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