Over the past 6 months*, the EFC has continued to investigate how utilities across NC are faring as the ongoing pandemic continues to create a variety of challenges related to revenue and operations. The big picture takeaway is that some things are improving while some things remain the same. Many utilities continue to feel a variety of impacts from COVID-19 on utility revenues and practices, some utilities are transitioning to pre-pandemic billing practices, and some utilities will be providing funds for bill payment assistance to customers who have past due bills.
This week, the EFC is releasing a report, funded by the NC Policy Collaboratory, that details some of the on-going impacts on water and wastewater utilities that have resulted from COVID-19 and the implementation of NC’s Executive Orders 124/142, which prohibited disconnection of residential customers and mandated the establishment of payment plans. As part of its research, the EFC interviewed staff from 16 different utilities and collected survey responses from a total of 34 utilities between August and December 2020. This research included utilities across the state that varied in size from 42-300,000 accounts and which had a wide variety of financial health characteristics.
On October 5th, two House Democrats, Harley Rouda and Rashida Tlaib, submitted this letter to ask the director of the CDC to give a nation-wide moratorium on water disconnections due to non-payment through the state of emergency because of COVID-19. While this is at the federal scale, many individual utilities and states already declared moratoria in 2020, though some of those have expired by now (mid-October). Utilities and state and local government officials recognize the value of access to clean and safe water during the pandemic, and utilities are motivated to avoid disconnections for public health and customer service reasons, as well as to minimize the cost of operations associated with disconnections and reconnections. Still, disconnecting a customer from water service is seen as an important tool for revenue collection in the water/wastewater industry. According to data from 84 North Carolina water and wastewater utilities provided to the North Carolina Utilities Commission, an average of 13.7% of a utility’s customers were past due on their bill in June of 2019 (pre-COVID). Providing notice of disconnection or disconnection itself can be effective for encouraging payment of these late bills, but how effective they are is unclear.
August has been a key transition month for local government utilities in North Carolina as EO 124/142 (which prohibited disconnections due to non-payment for residential utility accounts) has expired, payment plans are required to be in place, and Governor Cooper just announced $175 million in relief money, including $122 million for assistance in paying rent and utility bills.
How are water and wastewater utilities across the state faring under COVID-19 conditions? We’ve been keeping track here at the EFC and though the circumstances are constantly changing, we’ve been able to assess some of the impacts of COVID-19 on utilities during the last five months.
We have just released a report funded by Division of Water Infrastructure in the Department of Environmental Quality, outlining results from a poll, analysis of the EO 124/142 data that utilities reported to the North Carolina Utilities Commission (NCUC) for the full April through July period that covered the statewide moratorium, stories of individual utilities (blog post coming soon), and an overview of our financial resiliency tool. Continue reading
Co-written by Erin Ansbro
Right now, water utilities are facing great uncertainty about the coming months and years. When will moratoria on water shut-offs end? When will water consumption be back to “normal”? Will utility staff get COVID-19? And the “Big One” — What will revenue loss be for utilities in the coming months and years? While answers to these questions remain unknown during these unprecedented times, guidance from the past can help utilities think through strategies that may save them money now and in the future. Here, we distill information from a previous EFC report about approaches utilities took in response to the Great Recession of 2008-2009 and discuss how the findings relate to circumstances under COVID-19 conditions.
The report, written in partnership with the Water Research Foundation, comes from ideas discussed during a two-day forum with 17 CEOs of utilities which serve between 78,000 to 19 million customers. During the forum, leaders “discussed how they acted to mitigate the recession’s impact and adapt to a changed financial and economic environment” (p. xi). Although these approaches were used by large utilities, some may be appropriate for smaller utilities. These approaches are starting points for consideration, but are NOT intended to be a specific road map or a recipe for success. In addition to the overarching themes and summary, the report lists some future research needs and then gives details on the 48 strategies implemented by the forum participants. Continue reading