Almost 200,000 of Evergy’s electric customers in Kansas and Missouri have fallen behind on their power bills, yet one more sign of the economic trouble the country is facing amid the coronavirus pandemic.
The company reported that 130,000 of its residential customers owe $249 or less on their electric bill, while about 60,000 owe $250 or more, according to a company filing with the Kansas Corporation Commission.
The company estimates that about half the customers in arrears — about 95,000 — are in Kansas. The company has about 1 million Kansas customers and 600,000 in Missouri.
“That is a very significant number,” said David Nickel, consumer counsel of the Citizens’ Utility Ratepayer Board.
“It’s an indication of how COVID-19 has affected us Kansans with regard to unemployment and the like,” he said.
The overall numbers — which make up about 12% of Evergy’s customer base in Kansas and Missouri — were contained in a request filed by Evergy on May 8 seeking approval to offer payment incentives to customers who are past due on their bills.
While more current numbers were not available, the company told state regulators that it only expected the numbers to worsen.
“Evergy has seen arrearages substantially increase and expects that they will continue to rise,” the company said in its filing. “Evergy expects this to result in significantly higher bad debt expense.”
It was not known how much the company is owed in past-due payments. It also was not known how the number of past-due accounts compares year over year, although it is still believed to be above normal.
The company attributes the spike in late payments to the economic shutdown stemming from efforts to contain the spread of the coronavirus.
The state’s unemployment reached its highest point since 1976 when it climbed to 11.9% in April.
A new report out Friday showed the unemployment rate receded to 10% in May but was still much higher than the 3.1% rate reported in May 2019.
Last month, the Kansas Corporation Commission ordered utilities to offer 12-month payment plans and waive late fees through the end of the year to help residential and small-business customers avoid having their service disconnected.
Evergy spokeswoman Gina Penzig said the company expected a rise in late bill payments when the pandemic hit back in March but didn’t know the magnitude.
It was why the company announced in March it was suspending utility disconnections until May 1. The suspension was extended twice. It now ends July 15. The company doesn’t anticipate another extension as the economy slowly regains its footing.
“We know our customers and communities are still recovering and adapting, but we’re starting to see the economic activity come back in the area,” Penzig said.
Penzig said the company was trying to strike a “measured and careful” approach to encouraging customers to settle their balances.
While the disconnections were suspended, the utility bills were not, she said.
“We are aware of that potential that customers are building up past due balances,” she said. “The longer it goes on, the more trouble they may have in bringing things current, and that’s where these programs are hopefully going to help.”
The KCC has already approved Evergy’s payment incentive plan, which comes about a month before the company ends its moratorium on disconnecting services for nonpayment. The company’s plan includes:
- A 10% credit on up to $100 in balances for customers in arrears at least $100 incurred before July 15 and who pay off their balance in one month to return to current status.
- Incentives for customers with balances due of at least $250 who agree to pay off their balances in no more than four months. Customers will receive a credit of $25 toward the first month’s payment under the program. They also would get a credit of up to $75 if they complete the payment plan within the four months.
- Both payment plans must be started by Aug. 31.
Nickel said Evergy’s plan would likely help customers who have set aside money in recent months out of fear they could lose their job and wanted to be positioned to pay for groceries, their mortgage and other needs during the pandemic.
Nickel said the incentives will not be as helpful to customers who are out of work and don’t have the money to settle their bill with the utility company.
“If you don’t have any money and somebody says, ‘If you pay it right now we’ll give you a 25% discount,’ … that doesn’t mean much to me,” he said.
Valorie Carson, director of community planning for United Community Services in Johnson County, said the utility company’s plan may be a good business move as much as it might benefit customers.
“Everybody needs to be honest that this is a business model strategic decision,” she said. “Prioritize us, and we’ll give you a cut. That’s good business for the utility companies.”
Carson said the incentives mean customers may put their electric bill ahead of other household demands.
“It basically incentivizes people to prioritize utilities, which may or may not be the best thing for them,” she said.
Evergy has put money back into the community this year, including $8 million in donations, some which went to help with utility bills.
Last month, the company announced a $2.2 million donation to help social service agencies respond to the COVID-19 pandemic, including $1 million to help the less affluent pay for energy bills.
“That’s a contribution that we felt was a way we could help put further assistance out there to those who need it most,” Penzig said.
Nickel said CURB supported Evergy’s plan, partly because the company delayed the date for restoring utility disconnects and because of its community donations.
“Those contributions are going to help people in need hopefully pay their bills,” Nickel said. “It certainly will help reduce the number of uncollectibles that will eventually be passed on to all ratepayers in general.”
