Kentuckians $75 Million Behind On Utilities As Moratorium Ends

Oct 5, 2020

Credit LG&E

  As the autumn’s chill descends on Kentucky, utility customers who’ve fallen behind on payments because of the global pandemic and economic recession could have their power, gas and water service disconnected beginning Oct. 20.

The Public Service Commission requires all utilities to create payment plans for residential customers who’ve fallen behind on their bills between March 16 and October 1, 2020.

The terms of the payment plans require utilities give at least six months to pay the past due balances, but if customers fall behind on those payments, utilities can disconnect services, according to the order.

Following a survey of utilities, the commission found Kentucky utility consumers need at least $75 million to keep the lights on, the heat up, and the water running — and that figure will likely balloon to at least $150 million before the end of the year.

The order also stipulates that utilities cannot assess late fees on any past due amounts that residential customers accrue from March 16 to the end of the year.

Louisville Metropolitan Housing Coalition’s former Executive Director Cathy Hinko, who retired Friday, said the end of the moratorium could jeopardize thousands of families in Louisville and even more across the state, just as winter sets in.

“The commission has unilaterally declared the pandemic to be over on October 20,” Hinko said. “We have a plan for a flood, we have a plan for a tornado. What the heck is the resilience plan for this? I can’t get an answer on this.”

The Public Service Commission declined an interview for this story.

Federal And State Assistance

The PSC conducted a survey of 46 Kentucky utilities to understand the impacts the pandemic and disconnect moratorium has had on utilities and customers.

Overall, the commission found that customers who have always paid on time, mostly continued to pay on time through the first half of 2020. However, nearly all of the “minority” of customers who didn’t pay on time before the pandemic, have continued to fall behind on payments since mid-March.

“Accordingly, the Commission, based on the evidence, finds that a minority of utility customers, but nevertheless a significant number, are influenced by the prospect or reality of utility service disconnection insofar as they eventually pay, albeit late,” the order states.

Many of the residential customers in arrears, are eligible for payment assistance through the Low income Home Energy Assistance Program (LIHEAP). However, there is no similar program for water and sewer assistance. The commission found that assistance was necessary before the pandemic and has only grown since.

Hinko said she’s doesn’t think the state government has fully recognized the enormity of the problem, and she warns that without a solution, the consequences could be dire.

“There are small water companies in Eastern Kentucky, and what happens if the water companies go belly up? I mean we are talking about dysentery,” she said.

Because of the large amount of financial assistance that will be necessary to help customers through the pandemic, the Commission recommends the state use the federal funds earmarked for COVID-19 relief to develop community block grants, or direct federal assistance to help pay water and sewer bills across the state.

The Public Service Commission is not extending its payment plan protections to commercial and industrial customers because of availability of financing options like the Paycheck Protection Plan — meaning they, too, are eligible for disconnect beginning Oct. 20.

Louisville Residential Customers

By the end of September, nearly 28,000 residential customers with Louisville Gas and Electric were eligible for disconnection. That’s nearly twice the eligible disconnection rate for all residential, commercial and industrial customers in 2019.

LG&E Spokesperson Natasha Collins says the utility is working to inform customers about payment plans as disconnections resume.

“We continue to encourage customers to keep paying what they can to avoid accumulating a large balance over time,” Collins said in an email, “We also encourage them to visit our website to reach out to us and work with our customer care representatives to find agencies they can contact for financial assistance they may be eligible for.”

Louisville Water Company has no plans to start disconnecting customers, and a spokesperson said it does not fall under the PSC’s order.

“Right now, we’re operating like we’ve been since March 13. We are not turning off for non-payment,” Kelley Dearing-Smith said in an email. “We are continuing the proactive outreach to customers who fall behind on payments.”

Still, more than 16,000 Louisville Water Company customers are in arears enough they could have their water turned off. Typically, the company averages about 2,000 customers, Dearing-Smith said.