Are your utility bills past due because of COVID-19? Prepare to pay as NC order expires
More than 1.45 million utility accounts in North Carolina have gone unpaid during the coronavirus pandemic. And with a moratorium on shutoffs running out, account holders could have to begin paying up as soon as August.
Under executive orders from Gov. Roy Cooper, utility companies have been prohibited since March 31 from charging late fees or cutting service to people who haven’t paid their bills. But those consumer protections are likely ending at the end of this month, Cooper said.
For some, the timing couldn’t be worse.
“We’re coming into the hottest point of the summer when people’s electric bills are going to be spiking, when their water bills are going to be spiking,” said Rory McIlmoil, the senior energy analyst for Appalachian Voices, a grassroots environmental group. “So ending the moratorium on disconnections is going to have a severe impact on households that are struggling.”
Utility companies are currently owed about $257.85 million in unpaid bills accrued since March, according to the N.C. Utilities Commission. But with unemployment remaining high statewide, McIlmoil and others worry that utilities could start the disconnection process if residents can’t pay both their current bill and part of their past bills.
Most of the unpaid accounts — 1.37 million — are residential.
Felipe Zurita, a Durham resident, said it would be impossible to pay for utilities and rent if Immaculate Conception Catholic Church didn’t help cover his bills.
“We can’t work, so there are struggles with that,” Zurita told The News & Observer in Spanish as his son translated. “We Just got to keep our heads up.”
People are likely using more electricity, water and gas now because they are staying home, said Pamela Atwood, director of housing policy at the North Carolina Housing Coalition.
Those who have a higher than average bill and months of late payments added on top may owe double or triple what they would normally pay, she said.
“And so, when you compound that with potential job losses or reduced work hours, it’s just putting people in this deeper and deeper hole to get out of,” she said.
Water bill light bill or rent
In Durham, Rosa Green answers the phone at the Community Empowerment Fund, a nonprofit that connects low-income families with financial services. Right now, more than a dozen members owe hundreds of dollars in city water bills, Green said.
“I’ve had members come in tears because they are trying to decide if they should pay their water bill, their light bill or their rent,” Green said. “I always advise them to pay the rent because at least they’re going to have shelter.”
Durham announced a suspension on water shutoffs on March 9, before Executive Order 124 went into effect. Since then, 3,436 residential customers and 225 non-residential customers have stopped paying their water bills. According to the Durham Department of Water Management, those customers have built up $1.28 million in debt, with residential customers totaling $893,031.
Without Cooper’s Executive Orders 124 and 142, those accounts would have all been eligible for disconnection, Heidi Hackett, the department’s utility finance manager, said in an email to The News & Observer.
Shutting off utilities in households would create a public safety situation, said Atwood.
“We’ve got a pandemic where you need to be able to stay at home and you need to be able to, you know, wash your hands frequently and take a lot of sanitation measures,” she said. “If you don’t have running water, that increases the public health risks right off the bat.”
Raleigh’s water department is owed $4.75 million, with 23,658 residential accounts behind on bills, according to a report by Robert Massengill, Raleigh’s public utilities director.
Utilities are struggling too
Concerns raised by municipal utilities statewide are a key part of why Cooper will not further extend the deferral of utility payments.
According to a report from the Utilities Commission, customers of power giants like Dominion, Duke Energy and Duke Progress make up about 60% of the outstanding debt. But some smaller municipal utilities say the prolonged period without payments is pushing their finances to the brink.
Elizabeth City, perched on the Pasquotank River in the state’s northeastern corner, has emerged as the poster child of those struggles. During the Council of State’s July 7 meeting, State Treasurer Dale Folwell cited Elizabeth City’s struggles in calling for Executive Order 142 to be lifted immediately.
The city provides power, sewer, trash and water service to about 10,500 accounts, of which about 2,730 have not made payments since Cooper signed Executive Order 124 in March. Elizabeth City was positioned to handle two months of deferred payments, said Richard Olson, the city’s manager, but not for the additional two months given by Executive Order 142.
“When the governor extended 124 with 142, therein lies our big rub,” Olson said.
The city tries to maintain a $3 million operating balance in its utility accounts to pay its roughly $650,000 in operating costs and the $2.1 million to $2.5 million it pays to buy the power it then passes on to customers.
Elizabeth City officials asked Attorney General Josh Stein’s office for an exemption from Executive Order 142, citing its finances. After several back-and-forths, the city received the waiver on June 30, allowing service disconnections to accounts with outstanding balances. It’s a tool the city said it needs to push some delinquent customers to make their payments.
Under the terms of Elizabeth City’s agreement with the state, each customer must have the chance to sign a repayment plan to pay a maximum of $100 on top of their monthly bill.
The $100 cap is a longstanding Elizabeth City policy. Olson said, “A normal customer cannot afford more than $100 per month on top of keeping their current bill current. If we make it more than $100 per month, we’re setting them up for failure.”
An average customer in Elizabeth City has a total monthly bill of about $300, Olson said. That means someone who didn’t make any payments while the executive orders were in place would take about a year to re-pay their outstanding debt.
In Durham, Hackett told The N&O, any final decision on when to restart disconnections would require the approval of the city manager, mayor and council.
“At this time, it appears our temporary suspension of cutoffs will extend through mid-September,” Hackett wrote, adding that before the city starts disconnecting service it will let residents know about payment plans and financial resources like Durham’s Water Hardship Fund.
The typical payment plan for customers with outstanding balances will be six months, Hackett said, with some customers receiving additional time.
‘A major hardship’
While Cooper ultimately did not lift Executive Order 142 at the Council of State meeting earlier this month, he did acknowledge the majority of the body would likely oppose continuing the disconnection suspension and deferred bills past the end of July.
“We are telling people that it is unlikely that this executive order would be renewed,” Cooper said, adding his office is encouraging utilities to set up payment plans with customers.
The Economic Improvement Council Community Action Agency, an Edenton-based nonprofit, provides assistance to a 13-county region in northeastern North Carolina, including the Elizabeth City area. Landon Mason Jr., executive director, told The N&O the group has received about a dozen requests for COVID-19-related utility assistance.
Mason predicts requests for help to increase significantly if Executive Order 142 expires, as expected. It could, he said, “very well become a major hardship on a lot of families.”
The General Assembly briefly considered a bill last month that would have helped some people struggling with outstanding utility debt.
House Bill 1200 would have provided $20 million in CARES Act funds for utility grants, but the bill stalled in the General Assembly shortly after being introduced. The N&O previously reported that legislators were waiting to see if the federal government would allocate additional COVID-19 relief funds before passing the bill.
The $20 million would help, McIlmoil said, but wouldn’t come anywhere close to meeting the need statewide. He wants the moratorium extended at least until September, when the General Assembly is slated to return and can pass House Bill 1200 or similar legislation.
“We understand that ... at least some municipal utilities are facing a situation that may be financially untenable for them,” McIlmoil said, “but the first priority should be to protect utility customers right now.”
This reporting is financially supported by Report for America/GroundTruth Project and The North Carolina Local News Lab Fund, a component fund of the North Carolina Community Foundation. The News & Observer maintains full editorial control of the work. To support the future of this reporting, subscribe or donate.
This story was originally published July 21, 2020 at 6:00 AM with the headline "Are your utility bills past due because of COVID-19? Prepare to pay as NC order expires."