Tag: COVID-19

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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U.S. Scheduled to Exit Paris Climate Agreement on November 4

Amid raging wildfires, heavy rains, and tornadoes— all of which  have been linked to climate change—the United States is set to exit the Paris Agreement on November 4, one day after the presidential election.[1] President Trump, who has said that the global agreement to confront catastrophic climate change was a “total disaster” for the United States, formally issued the required one-year notice of withdrawal last November.[2] Former Vice President Joe Biden has stated that he would  re-enter the U.S. into the Paris agreement if he wins the 2020 election.[3]

The 2015 Paris Agreement seeks to limit the “global temperature rise this century well below 2 degrees Celsius above pre-industrial levels,” and ideally less than 1.5 degrees Celsius.[4] Nations set their own goals for reducing greenhouse gas emissions through nationally determined contributions (NDCs).[5]

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Moratorium on Utility Shutoffs to Expire

In response to the COVID-19 pandemic, many states have mandated that utilities maintain service regardless of customers’ ability to pay. [1] The Illinois Commerce Commission (“ICC,” the quasi-judicial agency that regulates Illinois’s utilities), for example, issued an order requiring various customer protections, including a moratorium on utility shutoffs due to nonpayment, more generous deferred payment arrangements, and more favorable credit reporting for missed payments. [2]

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