Some Oregon Utilities Resume Disconnecting Customers
While Washington and California have taken strong stances on utility shutoffs, Gov. Kate Brown has been quiet on the issue.
Since March, Gov. Kate Brown and her fellow West Coast governors have presented a united front in handling the coronavirus.
From issuing some of the earliest stay-home orders, to announcing a formal — if amorphous — “pact” for responding to the pandemic, Brown and Democratic Govs. Jay Inslee and Gavin Newsom largely aligned their strategies.
But in one notable way, Brown has been far more hands off than her counterparts.
With hundreds of thousands out of work, Washington and California have instituted some of the country’s strongest directives to ensure people don’t have their power or water shut off because they can’t pay their bills.
Brown, meanwhile, has been almost completely silent on the issue, preferring in many cases to trust that utilities around the state will protect customers struggling amid unprecedented circumstances.
Consumer advocates say that trust might be misplaced. While the state’s large investor-owned utilities like Portland General Electric and Pacific Power aren’t currently pulling the plug when customers can’t pay their bill, many of Oregon’s consumer-owned utilities have ended a self-imposed moratorium in recent weeks, resuming regular disconnection practices.
Precisely what that means for customers isn’t clear. Unlike investor-owned outfits, these smaller, locally controlled utilities aren’t required to share data on disconnections, meaning it’s unknown how frequently they are shutting off service.
But while the utilities insist they are doing everything they can to work with customers, consumer advocates argue any disconnection is unwarranted in these unprecedented times.
“The people not paying their bill by and large are struggling,” said Bob Jenks, executive director of the Citizens’ Utility Board, which represents ratepayer interests. “You’ve got to approach folks who are struggling right now with a whole lot of empathy.”
As the scope of the pandemic became clear this spring, most states took action to halt utility disconnections. According to the National Association of Regulatory Utility Commissioners, 35 states wound up issuing moratoriums on service disconnections, though some of those have since expired.
In mid-April, Washington Gov. Jay Inslee issued an order blocking power, water and landline phone providers from shutting customers off due to nonpayment, charging late fees, or refusing to reconnect someone who was shut off due to nonpayment. That order has since been extended to mid-October, though utilities in the state argue it might be doing more harm than good.
“We strongly encouraged the governor not to do it,” said George Caan, executive director of the Washington Public Utility Districts Association, which represents 27 utilities. “No one was being shut off. There were no complaints.”
Meanwhile, Gov. Gavin Newsom in early April announced a moratorium on water shutoffs in California. Weeks earlier, he had called on state utility regulators to take action to protect consumers. The state has now prevented investor-owned utilities from disconnecting services because of nonpayment until April 2021, though consumer-owned utilities controlled by cities or local boards have more leeway.
In Oregon, advocates have pressed behind the scenes for months, but the issue of disconnections has been little discussed by Brown. Asked about the issue at a press availability last week, the governor said: “No one should go without electricity during this crisis. We have been working with utilities to ensure there are no cutoff notices.”
Pressed on the fact that some utilities have resumed disconnection practices, Brown said it was concerning. “That’s why we’re working with them to avoid that,” she said. She did not offer details.
The governor’s office did not respond to a list of specific questions about reasons for differing with Inslee and Newsom, instead saying that Brown “believes strongly that no one should go without electricity during this crisis, and we are gathering data to monitor the situation and ensure that basic, critical services will continue.”
It’s true that the state’s governor-appointed Public Utility Commission has so far been able to secure agreements from the investor-owned utilities it regulates to halt disconnections. Those large outfits serve three-quarters of Oregon electric customers, and all natural gas users.
But leaders at many consumer-owned utilities — a category that includes co-ops, public utility districts and municipal utilities — say the moratorium they took on voluntarily for months has proved unworkable.
The Eugene Water & Electric Board, for instance, resumed disconnections for unpaid power bills on Aug. 10. In Marion and Polk counties, the Salem Electric cooperative brought back disconnections in July. The City of Ashland has also resumed disconnections for both water and electricity, following a months-long break.
The utilities all offer a simple reason for resuming shutoff practices: leverage. They say that a segment of their customers will refuse to engage with them about past-due bills, no matter how many phone calls, written notices and knocks on their door they receive. The only thing that works, utilities say, is the threat of losing service.
“Disconnection is always a last resort,” said Ted Case, executive director of the Oregon Rural Electric Cooperative Association, which represents 18 electric co-ops. “It gets people to call us back.”
“The potential for disconnection of services is a powerful tool,” said Joe Harwood, spokesman for the Eugene Water & Electric Board. “It’s an important tool.”
Harwood, Case and every other utility representative OPB spoke with also suggested one more thing about disconnections: They’re unlikely.
Utility officials said utilities are eager to create payment plans, slash fees, and help customers access financial assistance that has grown more prevalent during the pandemic. But they stressed that such interventions lose their usefulness if a customer’s bill grows too large.
“The bottom line is if you get in contact with us, you are not going to be disconnected,” Case said. “If they call us, we’re going to get them on a plan, and we’re going to help them do that.”
The sheer scale of need during the pandemic worries consumer advocates, who say some people are necessarily going to fall through the cracks if any disconnections are allowed.
They point to Oregon’s sky-high unemployment rate, a disastrous delay in unemployment insurance payments, and the inevitability that housebound people — including schoolchildren learning remotely — are going to use more power, resulting in higher bills.
“There are some people that, if you send them a shutoff notice, are going to pay,” Jenks said. “Then there’s people who, if you shut them off, they will pay in the next 24 hours. In the end what you end up with are people who are shut off who aren’t able to reconnect.”
There’s little doubt more people are falling behind on their bills.
Oregon’s three investor-owned energy utilities, which share data with the state, have all submitted reports suggesting the pandemic has placed more people in their debt.
For instance, Portland General Electric reported in late June that its total value of past-due payments doubled between January and June 19, from $14 million to $28 million.
“We started to see increasing numbers mid-March as we responded to COVID by stopping disconnections,” the company wrote in a memo to the Public Utility Commission.
Meanwhile, Idaho Power reported that the number of residential customers between two and three months behind on their bills was 68% higher on May 31 than a year earlier. Pacific Power saw the same metric increase by 27%.
Consumer-owned utilities that have resumed disconnections are not required to share such numbers, but some have. The Eugene Water & Electric Board said in early August that it had roughly 1,800 customers at risk of disconnection, compared to around 300 at the same time last year. That’s despite having record resources to help people with their bills, including a $15 million infusion passed by state lawmakers in early June.
“We’re actually not sure why people aren’t contacting us,” Harwood said.
One possibility floated by some utilities for the increase in outstanding bills is that customers believe, incorrectly, that they don’t have to pay as utilities have stopped disconnections. That’s what Caan thinks has occurred in Washington state.
“Many customers unfortunately believe that the waiver is not just for disconnections, but the waiver is not to pay their bills,” he said. “When the moratorium is officially lifted, they’re going to have much more debt than they would have had.”
Oregon advocates say it’s more simple than that: Many people just can’t pay right now.
In response to the pandemic’s financial devastation, they’ve been urging muscular state action for months. In a letter to Brown on March 31, Jenks joined representatives of the Community Action Partnership of Oregon and the NW Energy Coalition to call for an array of measures, including:
“The ability for Oregonians to remain safely and comfortably in their own homes during this pandemic should not be determined by their financial condition, especially during this emergency,” the letter said.
In the months since, the letter’s signatories have developed more ideas for how Oregon should proceed.
Keith Kueny, who advocates for low-income ratepayers for the Community Action Partnership of Oregon, has proposed giving customers two years to pay back unpaid bills — far longer than payment plans many utilities employ. Kueny has also proposed that utilities be required to forgive some portion of unpaid bills.
“We’ve asked the governor several times, and she just continues not to do anything on it,” Kueny said in late July.
Jenks’ organization, the Citizens’ Utility Board or CUB, recently suggested its own list of steps the state should impose on investor-owned utilities like PGE. Those include halting disconnections until next spring unless unemployment falls below 9 percent, a step that would ensure people don’t have their service cut during winter. CUB also has proposed requiring utilities to create a $100 million fund to help offset unpaid bills. That fund could be paid for by a temporary 1% “relief surcharge” on utility bills.
“That’s entirely reasonable to do under these circumstances,” Jenks said. “This is a one-in-a-hundred public health event. If we had a one-in-a-hundred wind storm that knocked out the utility distribution system, the utility would go in and build that, and we’d be paying for that for the next 20 years.”
The state’s Public Utility Commission is holding workshops on the issue, and could impose new rules on investor-owned utilities. It’s unclear whether the state will take any action on the dozens of consumer-owned utilities that don’t fall under the commission’s purview.
On Aug. 20, Brown sent a letter to representatives from those utilities. She requested that they share current and historical data with the state about how many people are behind on their bills, and how many people are being disconnected — data points that ratepayer advocates have pressed for.
Sharing that information is voluntary, Brown made clear. As of Tuesday, the state’s electric co-ops were still reviewing the request, Case said. Other consumer-owned utilities did not immediately respond to inquiries about whether they’ll comply.
“I recognize that consumer-owned utilities are locally controlled and regulated,” Brown wrote. “But to better inform and target assistance during the state emergency for COVID-19 we need additional data about Oregonians in need.”
Brown has directed the state’s department of Housing and Community Services to begin collecting the requested data as of September 30, weeks or months after many utilities resumed disconnection practices.
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