With customers now owing as much as $600 million in unpaid gas and electric bills, advocates said the state needs to extend a moratorium on utility shutoffs while a program to help them is developed.
As the COVID-19 pandemic has peeled hundreds of thousands of jobs from the economy, the number of residential and commercial customers who have fallen behind in paying their bills has soared, according to utility executives and the state Board of Public Utilities.
Just how big a problem it is remains uncertain. The BPU declined to detail the total amount owed by customers, saying those numbers would be released soon. Others, who spoke at an initial stakeholder meeting on the issue Monday, also mostly avoided talking about specifics.
Rate Counsel Director Stefanie Brand, whose office has hired a consultant to help determine the extent of the problem, only said the numbers are “quite significant,’’ possibly rising to at least $600 million.
In August, the BPU projected the accounts were more than $442 million in arrears, but since then the pandemic has surged to record levels, likely inflating the amount owed to the state’s utilities.
Brand, too, called for an extension of the moratorium on utility shutoffs, which is due to expire on March 15. Her office initiated the proceeding to figure out how to deal with the problem. “I don’t imagine how it’s going to be done by then so it’s got to be extended,’’ she said.
If so, it leaves utility executives, state officials and consumer advocates with some difficult choices. Existing programs to help low-income customers pay their utility bills lack the funding to expand to also cover customers who fail to meet the income thresholds.
Apparently, however, they are part of the problem. At Public Service Electric & Gas, about 77% of the residential accounts that are more than 90 days behind in paying their bills are projected to not be low-income customers or those who have previously qualified as to meeting that threshold, according to Matthew Weissman, an attorney for the company.
How to finance a forgiveness program?
Brand and other consumer advocates called for an arrearage forgiveness program but acknowledge it needs to be worked out where the financing would come to support such a concept.
“The numbers are looking so big that all sides are going to have to contribute to this problem,’’ Brand said. Presumably, that includes utilities, shareholders, all customers, and any funds that may be available through the federal stimulus program.
The federal government has awarded $23 million in previous stimulus funding, according to Fidel Ekhelar, an official with the state Department of Community Affairs. But it has had trouble distributing the money because it has received 8,500 applications that are incomplete, and others are not aware of the program.
“We’re very eager to help people, but if they don’t apply, we can’t help,’’ he said.
Evelyn Liebman, director of advocacy for AARP New Jersey, noted customers are failing to pay their bills, not only to investor-owned water utilities, but also to many municipal-owned water companies not subject to the BPU’s jurisdiction. Those customers need to be part of whatever solution the state decides on, Liebman said.
But Andrew Hendry of Jersey Central Power & Light noted that 26 other states, including some neighboring states, had extended moratoriums on shutoffs that now have expired without significant problems.
BPU staff expects to form a number of working groups, probably next week, to deal with issues related to the arrearage problem,. It has not announced any time frame for making a decision.