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2020 Special Session I

Budget Amendments - HB5005 (Conference Report)

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Utility Disconnection Moratorium Language (language only)

Item 4-14 #1c

Item 4-14 #1c

Effective Date
Effective Date

Language

Page 241, strike lines 1 through 20, and insert:

"7.a. Notwithstanding any other provision of law, upon the declaration by the Governor of a state of emergency pursuant to § 44-146.17, Code of Virginia, in response to a communicable disease of public health threat as defined in § 44-146.16, Code of Virginia, electric companies subject to regulation of the State Corporation Commission (“Commission”), natural gas suppliers subject to the regulation of the Commission, electric and gas municipal utilities, and water suppliers and wastewater service providers, subject to the regulation of Commission or constituting a municipal utility ("utilities") are prohibited from disconnecting service to residential customers for non-payment of bills or fees until the Governor determines that the economic and public health conditions have improved such that the prohibition does not need to be in place, or until at least 60 days after such declared state of emergency ends, whichever is sooner. "Municipal utility" means a utility providing electric, gas, or water or wastewater service that is owned or operated by a city, county, town, authority, or other political subdivision of the Commonwealth. The utilities shall notify all customers who are at least 30 days in arrears of this utility disconnection moratorium, which may be by bill insert or bill notice.

b. No more than 60 days after the enactment of this act, the utilities shall notify all customers who are at least 30 days in arrears of the COVID-19 Relief Repayment Plan (Repayment Plan), which may be by bill insert or bill notice, such notice shall include eligibility, billing information, applicable financial assistance resources, and contact information where customers may file an initial complaint on Repayment Plan related disputes. All utilities within 60 days after the enactment of this act must offer customers a Repayment Plan for past due accounts while the universal prohibition on service disconnections is in effect that includes, at minimum, the following provisions:

1. The Repayment Plan shall not require any new deposits, down payments, fees, late fees, interest charges, or penalties, nor shall such plan accrue any fees, interest, or penalties, including prepayment penalties;

2. The Repayment Plan shall amortize the repayment of a customer's utility debt over a minimum period of 6 months and up to 24 months for each utility. The utility will work with the customer to establish a Repayment Plan that meets the requirements of this clause 7.b. and that the customer determines is sustainable and affordable for them. A customer may satisfy the Repayment Plan in part or in full at any time; and

3. The utilities shall not apply eligibility criteria, such as installment plan history. However, the utilities may require the customer to attest to the utility or to a third party chosen by the utility that the customer has experienced a financial hardship resulting directly or indirectly from the public health emergency or that they have experienced a hardship to pay during the public health emergency.

4. If a utility reports to a consumer reporting agency or debt collector regarding a consumer who is on a Repayment Plan, the utility shall report the account as “current” in accordance with the Public Law 116-136: Coronavirus Aid, Relief, and Economic Security Act. If the provisions of Public Law 116-136: Coronavirus Aid, Relief, and Economic Security Act expire prior to the end of the universal moratorium established in clause 7.a., the utility may only resume reporting any default on the Repayment Plan at the end of the universal moratorium established in clause 7.a.

5. However, no utility that has received an order exempting it from the provisions of this clause 7.a. shall disconnect from service a customer who is making timely payments under the Repayment Plan at the time of the order and until such time as a customer ceases to make timely payments under the Repayment Plan. A utility that has received an order exempting it from the provisions of this clause 7.a. shall attempt to establish a Repayment Plan with its customers prior to any disconnection of service.

c. Nothing herein shall limit or prevent the utilities or the residential customers from applying or seeking debt relief or mitigation from any available resource, from entering into another payment plan offered by the utility, or from renegotiating the terms of the Repayment Plan.

d. In accordance with the provisions of Item 479.10, paragraph B.5. of this act, utilities shall use any funding allocated from the federal Coronavirus Relief Funds of the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) to provide direct subsidy payments on behalf of customers whose accounts are over 30 days in arrears, provided such use meets eligibility requirements pursuant to United States Department of the Treasury guidance. In applying these funds to customer accounts, utilities shall prioritize providing financial assistance to customers who are over 60 days in arrears prior to using the funds to assist customers with accounts 31 to 60 days in arrears. To the extent possible, utilities shall use available funding to cover one-hundred percent of the customer's arrearage.

In addition to the funds provided in Item 479.10, paragraph B.2. of this act, where applicable, utilities must accept financial assistance from other utility assistance programs funded with federal Coronavirus Relief Funds from the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) for customers who are at least 30 days in arrears. To the extent possible, utilities must direct customers in writing to these resources when establishing a Repayment Plan.

e. Notwithstanding anything to the contrary in this clause 7 or any other provision of law, if a utility subject to regulation of the Commission has accounts receivable arrearages for Virginia customers that exceed 2% of an investor-owned electric utility's, or 1% of any other utility's, annual Virginia jurisdictional operating revenues, then the utility may obtain relief from the moratorium established in clause 7.a. by filing an informational letter notice with the clerk of the Commission, stating such facts to demonstrate the exceedance and contemporaneously tendering associated workpapers to the staff of the Commission.  The Commission staff shall verify the information as filed by the utility and shall file a verification letter with the Clerk of the Commission.  The Commission, upon receipt of a favorable verification letter, shall issue a final order within five days. Upon issuance of an order, a utility shall thereafter be exempt from the moratorium provisions of this clause 7.a.

f. Notwithstanding anything to the contrary in this clause 7 or any other provision of law, if a utility subject to this clause 7 but not subject to regulation of the Commission has accounts receivable arrearages that exceed 1% of the utility's annual operating revenues, then the utility may obtain relief from the moratorium established in clause 7.a. if (i) the utility provides a written analysis stating such facts to demonstrate the exceedance to staff of the governing body, (ii) the utility contemporaneously makes available for public inspection associated workpapers verifying such facts to staff of the governing body, and (iii) the governing body verifies the exceedance, provides public notice, takes public comment on, and votes to approve that the exceedance is accurate in an open public meeting. In the event of an affirmative vote of the utility's governing body, the utility shall thereafter be exempt from the moratorium provisions of this clause 7.a.

g. The Commission shall allow for the timely recovery of bad debt obligations, reasonable late payment fees suspended, and prudently incurred implementation costs resulting from a Repayment Plan for electric, gas, water, or wastewater utilities, including through a rate adjustment clause or through base rates, however, the Commission shall exclude from recovery all costs associated with any jurisdictional customer balances forgiven by a Phase II utility pursuant to paragraph j. below. The Commission may apply any applicable earnings test in the Commission rules governing utility rate applications and annual informational filings when assessing the recovery of such costs. The Commission shall also require the utilities subject to regulation by the Commission to submit information on the status of customer accounts, including (a) the number and value of outstanding aged account balances, categorized by customer type; (b) the number and value of associated collections from customers, categorized by customer type; (c) the number and value of associated additions to aged accounts receivable balances, categorized by customer type; (d) the number and value of aged accounts receivable balances, net of collections and additions; (e) the number, total value, and average debt of accounts that are participating in the Repayment Plan, or another repayment plan as set forth by the utility; (f) the number of accounts removed from the Repayment Plan, or another repayment plan as set forth by the utility, categorized by reason; (g) the amount of and average debt still remaining for customer accounts removed from the Repayment Plan or another repayment plan as set forth by the utility; (h) the carrying costs of the debt for accounts participating in a repayment plan and any associated administrative costs incurred; (i) the number, total value, and average debt of customer accounts receiving direct assistance by the funds provided in Item 479.10, paragraph B.2. of this act, categorized by days in arrears and customer account type; (j) the cumulative level of customer arrearages by locality; and (k) any cost recorded as regular asset authorized by that certain order of the Commission in Case Number PUR-2020-00074. The Commission shall provide the Chairs of the House Committees on Labor and Commerce and Appropriations, the Senate Committees on Commerce and Labor and Finance and Appropriations, and the Secretary of Commerce and Trade an aggregated anonymized report by utility containing such compiled information by December 31, 2020, within 90 days of the expiration of the universal prohibition established in clause 7.a., and annually, on or before December 31st, thereafter for the following two years. The report due on December 31, 2020 shall cover the period from March 16, 2020 through December 15, 2020. The report due within 90 days of the end of the universal prohibition established in clause 7.a. shall cover the period from December 16, 2020 to the end of the universal prohibition established in clause 7.a. Annual reports shall cover the period from the end of the universal prohibition established in clause 7.a. to December 16th of the year the report is due.

h. Utilities not subject to regulation by the Commission shall submit information on the status of customer accounts to the Commission on Local Government managed by the Department of Housing and Community Development, including (a) the number and value of accounts that are at least 30 days in arrears; (b) the number and value of accounts that are at least 60 days in arrears; (c) the number, total value, and average debt of accounts that are participating in the Repayment Plan, or another repayment plan as set forth by the utility; (d) the number of accounts removed from the Repayment Plan, or another repayment plan as set forth by the utility, categorized by reason; (e) the amount of and average debt still remaining for accounts removed from the Repayment Plan or another repayment plan as set forth by the utility; (f) the carrying costs of the debt for accounts participating in a repayment plan and any associated administrative costs incurred; (g) the number, total value, and average debt of accounts offset by the funds provided in Item 479.10, paragraph B.2. of this act and local programs using Coronavirus Relief Funds, categorized by days in arrears, customer account type, and Coronavirus Relief Fund type; and, (h) the cumulative level of customer arrearages by locality. The Commission on Local Government shall provide the Chairs of the House Committees on Labor and Commerce and Appropriations, the Senate Committees on Commerce and Labor and Finance and Appropriations, and the Secretary of Commerce and Trade an aggregated anonymized report by utility containing such compiled information by December 31, 2020, within 90 days of the expiration of the universal prohibition established in clause 7.a., and annually, on or before December 31st, thereafter for the following two years. The report due on December 31, 2020 shall cover the period from March 16, 2020 through December 15, 2020. The report due within 90 days of the end of the universal prohibition established in clause 7.a. shall cover the period from December 16, 2020 to the end of the universal prohibition established in clause 7.a. Annual reports shall cover the period from the end of the universal prohibition established in clause 7.a. to December 16th of the year the report is due.

i. The reports required in paragraphs g. and h. of this clause 7 are not eligible for deferral or delay as permitted under Item 4-8.01, a.4.a. of this act.

j. Within 60 days after the enactment of this act, a Phase II Utility shall forgive all such utility's jurisdictional customer balances more than 30 days in arrears as of September 30, 2020.

1. In the utility's 2021 triennial review, any forgiven amounts shall be excluded from the utility's cost of service for purposes of determining any test period earnings and determining any future rates of the utility. In determining any customer bill credits, in the utility's 2021 triennial review, the Commission shall first offset any forgiven amounts against the total earnings for the 2017 through 2020 test periods that are determined to be above the utility's authorized earnings band. Such offset shall be made prior to any offset to customer bill credits by customer credit reinvestment offsets.

2. Each Phase II Utility shall, no later than December 31, 2020, submit a report to the Governor, the Chairs of the House Committees on Labor and Commerce and Appropriations, and the Senate Committees on Commerce and Labor and Finance and Appropriations, and the Chair of the Commission on Electric Utility Regulation, detailing all actions by it pursuant to this act to forgive customer balances."



Explanation

(This amendment outlines a policy to extend Virginia's moratorium on utility disconnections.)