Oklahoma Corporation Commissioners are being asked to put in writing and take formal action what the Commission staff has already done when it comes to utilities and unpaid bills caused by the coronavirus pandemic.
Public Utilities Division Director Brandy Wreath is asking the Commission to formally respond to the COVID-19 and allow an open door in the future for utilities to possible recover costs resulting from unpaid utility bills.
“The purpose of my testimony is to support the utility and consumer relief requested related to the COVID-19- emergency across the state of Oklahoma. This testimony will support the creation of a limited use regulatory asset, deferral of certain expenses, and acknowledgement of utility variance from rules and tariffs in the interest of public safety,” wrote Wreath in prepared testimony to be heard Thursday morning by the commissioners.
It was mid-March when Wreath moved to notify utilities across the state to voluntarily enact a temporary moratorium on “residential disconnects” caused by the COVID-19. He explained that each utility responded they would enact the moratorium.
Wreath made the move without waiting for an emergency declaration from Gov. Kevin Stitt and defends his actions.
“I have striven to act swiftly, with all of Oklahoma in mind. I
acted quickly to get moratoriums on everyone’s mind. I acted quickly, in my role as OUSF Administrator, to ensure Oklahoma’s eligible hospitals and mental health services had access to much needed internet bandwidth to serve across the state remotely. I continue to hear the fear and worry of many Oklahoma residents, businesses, consumer groups, agencies, and energy producers. There are no easy answers.”
At the heart of his proposal is a move to allow utilities who are experiencing massive amounts of unpaid utility bills to defer the expenses and possibly return sometime in the future to collect the debts from other customers and from the non-paying customers. The commission views the procedure as Regulatory Asset which allows a utility to book items that have a reasonable certainty of collection in a future cause.
In other words, if a utility is unable to collect unpaid bills once the coronavirus pandemic ends, it will be allowed to seek a rate change and include payments as part of it, thus forcing all customers to pay for the pandemic-caused bills.
“It is important for consumers to clearly understand that a moratorium on disconnection does not mean free utility service. Recovery of any account that becomes bad debt expense will still be paid by the remaining customer base, as an option of last resort. Therefore, PUD will require utilities to follow their bad debt collection process once this emergency has passed. This will include offering payment arrangements and possible refusal of new service until past due amounts are paid,” stated Wreath in his prepared testimony.
Wreath also does not support a move to allow the utilities to simply write off the unpaid bills as “bad debt.”
“This would be a completely inappropriate treatment of these types of expenses. First, it would place the burden to pay the debt on those who are already struggling to pay their utility bills by shifting the bad debt to other customer classes such as residential. Second, a utility has a right under the law to collect for services provided.”
The Commission will hold a meeting Thursday at 9:30 a.m. to consider the order in response to the pandemic.
Source: OCC