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The state’s largest electric and gas utilities say they need to start shutting off service to their most vulnerable customers for the first time in three years to avoid passing on their millions of dollars in unpaid bills to other ratepayers.
But advocates say the system just sets the poorest customers up to fail again, creating a potentially dangerous situation for the nearly 25,000 low-income customers who would face losing electric or gas service, and doing little to reduce the burden of debt on other customers.
“While the last thing we ever want to do is disconnect service to any customer, unpaid energy bills increase costs for all customers. Also, in some cases, receiving a disconnect notice encourages the customer to reach out to us so we can get them the assistance they need,” explained Eversource spokesman Mitch Gross.
Gross said that Connecticut is the last state in the nation that still has a COVID moratorium on shutting off service to customers with unpaid bills.
Avangrid – which owns United Illuminating – and Eversource have not been allowed to shut off service to their low-income electric and gas customers with “hardship” protections since October 2019, given seasonal restrictions and a COVID moratorium that went into effect in March 2020.
This year the companies are asking the state regulator, PURA, for permission to start disconnecting those customers for unpaid bills as soon as September.
Since the beginning of the pandemic, unpaid gas and electric bills from Eversource’s hardship customers – those who earn less than 60 percent of the state median income or receive government assistance – have increased by $47 million, or 38 percent, to a total of $171 million in bills overdue by more than 60 days, the company told PURA.
Debt from unpaid bills is passed on to ratepayers each year and results in increased costs for all customers, including those with a hardship designation, Gross said, though the company was unable to provide an estimate how much debt from hardship customers increases overall utility costs for customers.
But Bonnie Roswig, an attorney for the Children’s Center for Advocacy, a provider of legal services for low-income residents, said pushing the poorest customers into payment plans they cannot afford does not help reduce that debt. Instead, hardship customers are saddled with a restructured bill that they still can’t pay, setting them up to fail — and they face losing service again.
Roswig said this creates an endless cycle that doesn’t benefit the company, the poorest customers, or the rest of the customers in Connecticut who ultimately take on the unpaid bills.
“When people who have a $1,500 back bill think their service is going to be shut off, and they call the company and someone says, ‘If you pay $200 a month, we won’t shut you off,’ – in my experience, they’re gonna say, ‘Sure, I’ll pay the $200,’” Roswig said. “They’re so relieved they won’t have their service shut off, but the reality is, they can’t afford it.”
Payment plans
In April 2021 and 2022, PURA approved requests from Eversource to automatically enroll hardship customers not already in a payment plan in a program called New Start.
The program gives low-income customers a monthly payment based on their average bill over the last 12 months. Each month they make their payment, one-twelfth of their overdue balance is forgiven and after a year it can be forgiven completely. Customers in an active payment plan are protected from shutoffs as long as they keep making payments.
Gross said Eversource automatically enrolled about 20,000 customers in that program this May and another 15,000 last May – resulting in about $11 million in overdue bills being forgiven.
“Auto-enrollment lifts the burden on customers of having to take action to sign up. These benefit from being on New Start versus being on no program at all,” said Gross.
Utilities use shutoffs, or the threat of shutoffs, to push customers with unpaid bills to either pay what they owe, or enter a payment plan to pay down their debt gradually, and Gross said that 80 percent of customers who receive a shut off notice pay their bills to avoid being disconnected.
Avangrid spokesman Gage Frank said its subsidiaries will always let customers know about payment plans to pay off unpaid balances and get back on their feet — but utility shut offs are the final measure they can take to reduce the debt that will be passed on to other customers.
“Despite these efforts, some customers continued to accumulate unpaid balances, and without a payment plan or special relief, we are required to disconnect following PURA’s rules,” Frank said.
But Roswig said the point of hardship protections is to protect the poorest customers who don’t have the means to pay their monthly bill, let alone their debt that can accumulate to thousands of dollars.
She said customers Eversource automatically enrolled in its New Start program would have been eligible for the company’s Matching Payment Program, which allows those who heat their homes with electricity or natural gas and are below 60 percent of the state median income to pay $50 a month, and have a dollar removed from their back balance for every dollar they pay.
“If you knew to call Eversource and said, ‘I heat with electricity, I get food stamps, I get Medicaid,’ then you would be told about this $50-a-month payment plan,” Roswig said.
Enrollment in the matching program is only open from November to May. Customers facing shutoffs in September or October would need to enroll first in the more expensive plan, which they will be less able to pay, Roswig said.
“Nobody is asking for customers not to pay,” Roswig said. “We’re just asking that the programs are administered correctly, and that financially at-risk customers are provided with accurate information in a way they can understand.”