As Summer Ends, Utilities Prepare to Resume Disconnections for Unpaid Bills

Utilities can resume cutting power this week to customers with unpaid bills as an emergency moratorium on shutoffs during Arizona's intense summer heat expires today.

During a sparsely attended meeting on October 10, representatives from several Arizona power companies, like Trico Electric Cooperative in southern Arizona, indicated that they wanted to start disconnections immediately on October 16. Others, like Arizona Public Service, promised to enroll their customers in payment plans, so they could start paying off large balances racked up over the summer months.

Regulators at the Arizona Corporation Commission are still struggling to figure out how, or if, all of this can play out smoothly, while consumer advocates worry that customers with large outstanding balances accrued over the summer will be unable to pay off those balances and be disconnected as a result.

The Corporation Commission enacted the emergency ban on June 20, a week after Phoenix New Times broke the story of a 72-year-old woman in Sun City West who died of heat-related causes after APS cut her electricity on a 107-degree day in September 2018.

Last week's stakeholder meeting included Elijah Abinah, the head of the Corporation Commission's utilities division; several utility representatives, who attended in person and by phone; Jordy Fuentes of the Residential Utility Consumer Office (RUCO); and a handful of consumer advocates. No Corporation Commissioners were present in the room.

The meeting exposed how regulators have not ensured a smooth transition out of the moratorium period, for people and utilities alike.

It also laid bare how much more the Corporation Commission needs to do to address the long-term consequences of the moratorium, which it plans to make permanent, as attendees debated over payment plans and bad debt — payment owed that they'll never be able to collect.

Sharon Connelly, representing APS, promised that the state's largest utility had used the past month to "let customers know that the end of moratorium is coming." The company, which has 1.2 million customers, sent messages by mail, doorhanger, and phone, she said. Come October 16, anyone with a delinquency of $75 or more would be enrolled in a four-month payment plan.

“If a customer does not pay the delinquent balance by the end of the grace period, they would move through the disconnect process and receive the disconnect notices,” she said

Several consumer advocates feared that the four months proposed by Corporation Commission staff would not give customers enough time to pay off those balances. They also worried that APS's messaging, which failed Stephanie Pullman, would once again be insufficient to inform customers of their options.

"If you’re making the rules, and it’s four months, and a lot of people need two more months, why not just make it six months?" said Stacey Champion, a longtime local activist and consumer advocate who called into the meeting, addressing statements by Abinah. "And then make it on a case-by-case basis."

Although four months is the proposed standard timeframe, Fuentes, of RUCO, said that the amount of time might prove "problematic."

Changes to shutoff rules as proposed by Corporation Commission staff would bar utilities from cutting electricity to customers during extreme heat or cold, which it defines as above 105 degrees Fahrenheit (which many people still deem too hot) or below 32.

If unpaid bills accrue during that moratorium, utilities cannot charge late fees or interest on them, but customers are required, within 15 days, "either to pay the delinquent bill in full or to enter into a payment plan to repay the delinquent bill through installments over a period of four months."

The meeting also sparked a debate about bad debt and whether or not unpaid bills could raise rates.

“That’s likely going to happen,” Fuentes said. “Unfortunately, we don’t know the bad debt. We don’t know who’s going to pay and who’s not going to pay at this point.”

But Abhay Padgaonkar, a consumer advocate who has previously pointed out that the sum of delinquent balances is a mere fraction of APS's revenue, called for the Commission to actually calculate bad debt before assuming that it would push rates up.

As of October 7, delinquent balances for 88,074 APS customers totaled $30.6 million, according to an APS filing with the Corporation Commission. That number was lower than the summer high of $31.4 million in delinquent balances for 99,308 customers on September 23, indicating that even before the moratorium ended, some customers were paying off their balances.

In 2018, APS parent company Pinnacle West had more than $3.6 billion in revenues and $511 million in profits.

Vincent Nitido, Trico's CEO, who attended by phone, told Abinah that the cooperative did not want to disconnect any of its 43,000 customers in rural areas around Tucson, but suggested it had little choice.

“We’re allocating costs among our member owners, and we will do our best not to terminate anyone," Nitido said. "We are loathe to turn them off, but that said, if they’re not even trying to contact us and make an arrangement, I don’t know what else to do.”

Maureen Scott, an attorney with the Corporation Commission, told Nitido that the company could not simply disconnect customers on October 16.

"You would have to follow your disconnection process and procedures, and whenever you disconnect someone, you are required to give them written notice," she said. "There’s a period of time given in that notice before you disconnect. You would not be able to ignore those rules.”

Nevertheless, Trico's website still cites Corporation Commission rules in stating that members with unpaid balances might be subject to disconnection.

"Members with past due balances who do not comply with the requirements described above will be subject to disconnection after October 15," it read as of October 15.

Curtiss Peterson, customer service manager for the Sulphur Springs Valley Electric Cooperative, which serves close to 60,000 members in southern Arizona, said that it had run disconnection processes each month since the moratorium began, without actually disconnecting customers. As a result, it would start up disconnections again after October 15.

"I don't think it's appropriate to disconnect on the 16th," Abinah said, adding that he wanted to follow up separately. If they couldn't agree, he said he would "file something" to require the cooperative to automatically enroll people in payment plans. He said he planned to do that next week — after those disconnections could begin.