UPDATE – October 6, 2020: The Florida Public Service Commission sided with investor-owned utilities at today’s Agenda Conference, voting unanimously to reject an emergency rule-making petition to temporarily halt electric disconnections.
Over 1.25 million Floridians who are currently behind on their electric bills will begin coming under risk of having their power shut off, as Florida investor-owned utilities have begun to resume the disconnection process for non-payment in recent weeks. The disconnection threat comes as unemployment claims continue to rise in the state, nearly reaching 4 million unique claims as of September 30, 2020.
A petition calling for the Florida Public Service Commission (PSC) to initiate an emergency rulemaking process to place a moratorium on the shutoffs was filed by Earthjustice on behalf of petitioners Florida League of United Latin American Citizens, Zoraida Santana, and Jesse Moody at the PSC on September 22, 2020.
Florida’s investor-owned utilities opposed the disconnection moratorium petition, and the PSC staff filed a recommendation to the Commission in opposition to the moratorium as well. Florida Representative Anna Eskamani filed comments in support of the moratorium.
The impacts of COVID are still being felt in dramatic ways throughout the state. When the petition was filed just ten days ago, it included COVID-19 statistics of more than 670,000 cases in Florida and more than 13,000 deaths. As of today, October 2, that number has risen to over 706,000 cases and an average of 101 daily COVID deaths. The U.S. Bureau of Labor Statistics reported a preliminary figure of 7.4% unemployment rate in Florida for August 2020 – lower than the high point of 13.8% reported in April, but still significantly higher than the rate of 2.4% reported for February, before COVID hit the state. Unemployment claims have been on a steady increase since mid-March, with nearly four million confirmed unique claims received by the Florida Department of Economic Opportunity as of September 30.
Poor track record of low-income customer outreach calls utility efforts into question
The utilities, in their comments opposing the disconnection moratorium, claimed that most customers who are late on their bills will not get in touch with the companies to seek financial assistance or a new payment plan unless faced with the threat of disconnection.
But the petition states that petitioners Santana and Moody, both Duke customers, have sought aid but found none was available to them. The current repayment plan that Duke provided them adds hundreds of dollars to their current monthly bill.
Santana, a mother to four children currently living in a rental unit with Moody, was unemployed for several months during the pandemic, and despite having returned to work recently, the utility debt that has added up is so high that they are unable to make the minimum required payments and are currently under threat of disconnection. Duke’s repayment plan was the only option they were given to avoid their power being shut off.
The utilities’ comments in the petition docket include self-reported high numbers of attempted customer contacts. However, Florida utilities maintain a notoriously poor record when it comes to reaching their own customers. Florida Power & Light only reached 0.68% of eligible low-income households for the utility’s weatherization program from 2015-2018, according to an analysis conducted by Broward County staff in response to FEECA (Florida Energy Efficiency and Conservation Act) proceedings last year. TECO reached about 23% of its customers, and Duke Energy reached about 15%. Weatherization and increased energy efficiency measures help reduce household energy use and result in lower bills. Many of the households currently facing increased financial strain due to the pandemic reside in low-income households that would have benefited from participation in utilities’ weatherization programs, had the utilities conducted successful customer outreach efforts.
Utility shareholders continue to profit
Florida utilities argued that if they are unable to threaten their customers with disconnection and they do not pay their bills, they will have to pass along those debts to the rest of customers via rate increases. They are currently functioning under “accounting orders”, tracking lost revenue and bad debt accumulating during the pandemic for potential recovery in future cost recovery proceedings. “An accounting order stands as a regulator’s pinky-swear that a utility’s other customers, not its shareholders, will pick up that tab,” as reported by former utility regulator Travis Kavulla in Utility Dive.
Others have argued, however, that utility shareholders can absorb some of the debt in order to share the financial brunt of the pandemic with families and small businesses.
Virginia’s Attorney General Mark Herring’s office called attention to the double standard earlier in the year when Assistant Attorney General Mitch Burton wrote, “it is possible that utility management could simply share the financial burden with shareholders, as other businesses impacted by the pandemic have had to do.”
As customers face growing mountains of debt, utility earnings continue to grow and promise increased shareholder profits, despite the pandemic. Second-quarter investor earnings presentations from the Florida utilities highlighted earnings higher than they were in 2019, with further growth anticipated. TECO’s quarterly report filed with the SEC in mid-August stated: “Tampa Electric currently anticipates earning within its allowed ROE range in 2020 and expects rate base to be higher than 2019. An increase in residential sales and favorable weather in the six months ended June 30, 2020 have more than offset the impacts of a decrease in other revenue classes as a result of COVID-19.”
Duke Energy’s Q2 investor presentation stated that they have “confidence in 4%-6% long-term EPS [earnings per share] growth.”
NextEra, parent company of Florida Power & Light and Gulf Power, similarly promised shareholders that it expects to deliver them high profits in the next two years.
The PSC is expected to address the shutoff moratorium petition at its Agenda Conference next Tuesday, October 6. The deadline for a decision on the petition is October 22, due to the emergency rulemaking nature of the docket. The petitioners say that the PSC currently has statutory authority to issue a shutoff moratorium, as utility commissions have done in several other states, including Arkansas, California, Kentucky, and New York.
The petition also comes as Gov. Ron DeSantis allowed Florida’s eviction and foreclosure moratorium to expire on September 30.