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2 October 2020 / Sara M. Costanzo

Left in the Dark: Utility Shut-offs Resume Throughout the Country



When the coronavirus crisis first swept the country, many states quickly moved to issue moratoriums on utility shut-offs to assist those who may be unable to meet their bills – and, for those states that did not impose such, a majority of utility companies themselves voluntarily implemented such policies. 

While a total of 36 states previously barred electricity disconnections during the pandemic, 14 states’ moratoriums have already expired – and the rest are following not far behind. That means, for an estimated 24 million American households, the possibility of their power now being shut off looms as the coronavirus still wreaks economic havoc. With thousands of schools holding classes virtually and jobs still being done remotely - let alone the essential need for lighting, heating, and in some states, still air conditioning – the impending wave of shut-offs could be very impactful. For renters across the country, landlords have already begun to use utility shutoffs where tenants are delinquent on rent. 

For those who have fallen behind on utility bills, providers are urging them to take advantage of the remaining governmental aid. While the CARES Act is more popularly known for its efforts on mortgage servicing, small businesses, and stimulus checks, the Act also provides an extra $900 million in relief on energy bills through its Low Income Home Energy Assistance Program. On a smaller scale, most utility companies offer some form of an energy assistance program or budget billing option to provide tailored help to consumers.

All the while, the cost of the moratorium legislation has quickly added up and utility companies can’t afford to continue pausing shut-offs without raising their prices - impacting those customers who have continuously met their payment obligations. In fact, from just April to June of this year, North Carolina residents were late for or missed $218 million in utility payments — nearly double the amount from the same time last year

Some small nonprofit utilities saw their revenues drop as factories shut down and consumers fell behind on bills, as reported by the American Public Power Association. Bigger utility companies are also feeling the effects as they’re receiving less money from non-residential customers, creating the need to push consumers to start paying their bills again. Some utility commissions, across 33 states, are tracking how utility companies’ finances are hit by the pandemic, in order to potentially help them make up the revenue. But, don’t neglect the apparent opportunity to quickly improve cash flow within your organization by fine-tuning your collections strategy - reach out to your utility collections partner at Weltman today.

For more comprehensive information and insights, watch The CARES Act and Its Impact on Utility Providers webinar.

This blog is not a solicitation for business and it is not intended to constitute legal advice on specific matters, create an attorney-client relationship or be legally binding in any way.

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Sara M. Costanzo

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