BLOG: PUC Agrees to COVID-19 Moratorium on Disconnections

Under the emergency order, distressed residential consumers can avoid non-payment disconnections by agreeing to have their bills deferred during the COVID-19 crisis.

________________________________________________

Financially distressed Texans who otherwise face electric service disconnections during the COVID-19 pandemic can get a payment reprieve under an emergency program adopted Thursday by the Texas Public Utility Commission.

Under an order adopted unanimously by the three-member PUC, such distressed residential consumers can avoid non-payment disconnections by agreeing to have their bills deferred during the crisis. The order also establishes an emergency fund to help defray bad debt losses accruing to retail electric providers and transmission and distribution utilities serving non-paying customers.

That fund will be financed through a 33 cent-per-megawatt-hour charge on utility bills, or about 33 cents per month. That’s down from the 65 cent-per-mWh charge initially proposed PUC chair DeAnn Walker, although she said Thursday the commission may find the 33-cent charge insufficient and may have to revise it upward again.

“I fully understand that this is an extraordinary order and program that we would be putting in place,” Walker said Thursday. “But I also just feel that under the current circumstances that we’re in, where so many people are loosing their jobs, if we had a moratorium on disconnects for the next three or four months — the market would not withstand that because they wouldn’t have any money coming in. This is a reasonable balance for people who are losing their jobs and the needs of the market.”

The program covers only residential customers, and only those Texans living in areas with electric deregulation, which includes the greater Houston metropolitan area, the Dallas-Fort Worth region, and areas around Corpus Christi and South Texas. It will remain in effect for six months, but can be extended, if necessary. Walker said non-deregulated electric cooperatives and municipally-owned utilities in Texas already had taken similar steps for their customers.

PUC Chair DeAnn Walker

Under PUC rules, retail electric customers in competitive areas who agree to have their payments deferred also become subject to electric service switch holds. This means that their current retail electric provider can bar them from obtaining service elsewhere until they pay their outstanding balance.

Chair Walker acknowledged that the Commission had quickly formulated the COVID-19 emergency order in response to rapidly unfolding events, and that revisions likely would become necessary. She said she may convene emergency meetings in the near future.

Walker also indicated that retail electric providers that use door-to-door marketing strategies should end those practices until the COVID-19 danger passes. The emergency order adopted Thursday doesn’t contemplate door-to-door REP sales, but the Commission could issue a revised order if necessary, Walker warned.

PUC member Arthur D’Andrea agreed. He also said it made sense to quickly formulate an emergency plan given the urgency created by the crisis and the risk it represents for Texas electric consumers and the retail electric market.

“We can’t have disconnections for people ordered not to work by the government, and so I think it’s the government’s responsibility to make sure they at least have lights and water while they’re sitting at home under government order,” said D’Andrea. “That is easy to do if you’re a vertically-integrated utility. In our market it’s a little tougher. … The entire argument for our market looks weaker if we can’t make this work.”

— R.A. Dyer