Electric utility companies in Maryland want the state regulator to remove several consumer protection measures enacted during the coronavirus pandemic. Utilities were barred from terminating electric service until October 2020. But utilities were required to enter into payment plans up to two years for low-income residents which pauses the disconnection process. Consumer advocates say the economic toll of the pandemic lingers and has been exacerbated by record high inflation so it’s too early to return to ‘business as normal’.
The Maryland Public Service Commission has scheduled a public hearing on Nov. 10 to determine whether the extended protections for residents should continue.
For example, before the pandemic utilities gave 14 days notice before shutting off power to a residential property. Since August 2020, utilities were forced by the state to give 45 days notice but not for anyone on a payment plan. This month, state regulators decided utilities must give 30 days notice before shutting off the electricity.
Utilities must offer 12-month payment plans instead of 24 months for low-income residents. In addition, the state will continue to prohibit deposits for those enrolled in payment plans. But if residential customers default on their payment plan, the commission doesn’t allow rolling over into a new plan anymore.
In June, utility providers statewide complained to the commission that COVID-19 relief money which paid down much of the old residential debt had run out. State lawmakers passed the RELIEF Act allocating $83 million to utilities to cover electric bills in default in June 2021.
“However, since that time customer arrearages have steadily increased,” wrote Jessica Raba, assistant general counsel for Baltimore Gas and Electric Company.
Since then, roughly 179,400 customers have racked up $167 million across all utility companies statewide in past due electric bills, according to a June joint letter by all the utilities operating in the state sent to the commission.
More than 83,000 residential accounts have had two or more defaults in the past 18 months, according to the letter. If the utilities were permitted to collect on those past due bills it would have garnered $98 million, according to the letter.
But advocates for consumers balked at rolling back protections.
“The plight of low-income residential customers originally affected by the COVID-19 pandemic has not been eliminated but instead has expanded to include significant inflationary price increases in basic commodities and essential services,” wrote David Lapp, lead attorney for the People’s Counsel, a consumer protection arm of the state. “Now is not the time to revert back to pre-pandemic payment and collection policies.”
Lapp said that if companies return to policies before the pandemic it could “create another emergency situation” and require the state regulator to step in once again. The majority of residential customers are in default for the first time and that a payment plan offers a second chance, he added.
In the past two months, the nonprofit Fuel Fund of Maryland has received 5,000 applications for help, about half of clients have shut off notices. The average overdue bill balance is just under $2,000 but the average monthly income of clients is roughly $2,800 which makes it difficult to get back into good standing.
“Before the pandemic, the average balance was around $1,200,” said Sam Impink, chief programs officer at Fuel Fund of Maryland.
About 82% of the nonprofits' clients are renters and live in either Baltimore city or the county. Some past due bills are upwards of $5,000 which is too much for the nonprofit to help pay down.
“It’s definitely putting a stressor on the client to have a balance that high,” Impink said. “We want to help as many people as we can but we can’t help someone with a balance that high.”
