Utilities Transitioning to Pre-Pandemic Business Practices

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Utilities Transitioning to Pre-Pandemic Business Practices

April 16, 2021

 While Gov. Tim Walz retains his pandemic-related emergency powers, the Minnesota Public Utilities Commission has approved--for the state’s rate-regulated utilities--a transition away from emergency-related utility customer service rules, including a prohibition on disconnection for non-payment.

The MPUC on April 15 tentatively approved ‘transition plans’ designed to move utilities back toward their pre-pandemic customer service practices. Reflecting the last-minute nature of discussions around several topics, the Commission moved to deem transition plans for the bulk of Minnesota state-regulated utilities complete on April 23. This delayed approval gives MPUC staff time to uncover potential issues that might need addressing in the time between the April 15 hearing and April 23.

CenterPoint and MERC, which had a general approach that differed somewhat from the other utilities, will file amended transition plans by Friday, April 23. The MPUC delegated to its executive secretary authority to deem those plans complete upon review.

In comments introducing the topic, MPUC Chair Katie Sieben said the pandemic continues with devastating consequences but with discussion of the lifting of the governor’s emergency powers, and more federal money available to help with customer utility bills, a thoughtful transition period plan was needed.    

The plans are designed to prompt customers in arrears back into payment plans, said Sieben, and encourage them to apply for financial assistance.

The transition timeline approved includes a number of key dates, including: May 1 for initial outreach to customers; June 1 for companies to resume sending disconnection notice; and Aug. 2 to resume service disconnections, under certain circumstances.

While these MPUC-approved transition plans do not apply to municipal utilities, they will likely be of interest and promise to serve as easily-defended policy going forward.

All parties involved in the state-sanctioned discussion seemed eager to move forward.

Customers in arrears need to work with utilities to maintain service.

Disconnections will be prohibited of customers with past due balances who have a pending application, or been deemed eligible for Low-Income Home Energy Assistance Program/Energy Assistance Program (LIHEAP/EAP) assistance for the duration of the transition period, through April 30, 2022.

The MPUC moved to disallow the imposition of any service deposits, down payments, interest late payment charges, or (business hour) reconnection fees through April 30, 2022 for customers who enter, or are complying with, a payment agreement. No fees or other charges are to be imposed on customers who are disconnected and reconnected, after defaulting on one payment agreement and who agree to re-establish that agreement, during the transition period, lasting until April 30, 2022. The second agreement needs to be adhered to--it marks the limit of fee or service charge protections.

This eventual imposition of late payment fees was a compromise--consumer advocates argued that it was enough to pay back arrears, because adding fees only makes arrangements harder to sustain.

The investor-owned utilities willingly agreed to suspend negative reporting to credit agencies for residential customers, as it appeared they did not make such reports anyway.

Among issues the MPUC did not include in its order was the length of payment plans, leaving this to the discretion of utilities with consideration of individual customer circumstances.

Utilities were required to notify customers of available energy assistance programs and how to apply. The MPUC and Department of Commerce will also be sending out joint communications.

The MPUC required reporting, of the utilities it regulates, of several practices, including: Service Deposits Charged; Reconnection Fees Charged; Down Payments Required : Interest/penalties/fees required.

The state-regulated utilities and many municipals and cooperatives suspended normal business practices at the onset of the pandemic.

On March 24, 2020, MPUC Chair Sieben and then-Commissioner of the Department of Commerce Steve Kelley wrote to all of the state’s utilities, requesting they work to reconnect disconnected customers and suspend disconnections and late payment fees for the duration of the state’s declared peacetime emergency.

It was, Sieben noted on April 15, “an extraordinary request.”

Sieben expressed her gratitude and appreciation to all utilities who worked with regulators, energy assistance agencies and their customers during this difficult time.

- by Steve Downer