KCC staff recommends against disconnect moratorium

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The Kansas Corporation Commission’s staff is recommending against a new moratorium on utility disconnects during the ongoing COVID-19 pandemic.

The staff said it’s opposed to imposing a new moratorium on disconnects for several reasons, including an improving economy, fewer statewide restrictions to prevent the virus from spreading and several utilities that have already suspended service disconnections.

“This is not an easy question and we have not arrived at our answer easily,” the KCC staff said in its report filed Thursday.

“However, the analysis we have conducted leads us away from a recommendation to reinstate a moratorium on utility disconnections at this time,” the report said.

The staff cited these considerations in making its recommendation in a 12-page report issued last week:

  • Several utilities, including Evergy and Kansas Gas Service, have voluntarily agreed to suspend disconnection of utility services. Plus, the state has a cold-weather rule in place in which disconnections are halted from Nov. 1 to March 31 when temperatures are forecast to fall below 35 degrees for the upcoming 48 hours.
  • Nationally, various utility regulatory agencies have allowed disconnect moratoriums to lapse. There are currently 11 jurisdictions that have blanket disconnections in place, according to the National Association of Regulatory Utility Commissioners. Out of the 36 jurisdictions nationally that initially mandated a moratorium on utility disconnections, 25 have allowed the moratorium to expire, including Kansas.
  • A vast majority of customers on payment plans are able to keep up with the terms of their billing arrangements. While customers have still been cut off because they can’t keep up with their payments, a majority have been reconnected. Less than 1% of
    utility customers have been disconnected without getting their service back, the staff report said. The monthly average percentage of customers unable to keep up with their payment plans from July to November ranged from 7.1% for Evergy in the old Westar service area to 4.5% for its customers in the Kansas City area. The average for Kansas Gas Service in that same timeframe was 5.63%.
  • The state’s economy has improved. The statewide unemployment rate in November was 5.6%, and while historically high, it’s down from 11.9% in April when it reached a 40-year high as stay-at-home orders were in place to control the pandemic.
  • Six of the state’s seven utilities have been able to reduced the level of past-due bills, the commission’s staff said in its report. Additionally, five of the six utilities that were able to report on 2019 levels of delinquent accounts have fewer customers with late bills this year than the same time last year.

Earlier this year, the KCC ordered utility companies not to disconnect customers who were suffering because of the pandemic.

The disconnect order lasted from March 16 through May 31.

The KCC also has an order in place that requires utilities to offer 12-month payment plans and waive late fees to help residential and small-business customers avoid disconnection.

The KCC recently extended that order and asked its staff to explore the possibility of reimposing the moratorium on disconnects.

Last month,  a coalition of nonprofit groups – called Build Power MoKan – pleaded for an end to utility disconnects.

The energy justice group, which advocates for the needs of utility customers in Missouri and Kansas, urged governors in both states to act if utilities failed to respond.

“Our utilities have involuntarily disconnected tens of thousands of struggling Kansans from power and heat during the pandemic, the worst health and economic crisis we have seen in a long time,” said Zack Pistora, legislative director for the Sierra Club, which is part of the coalition.

“In emergency times, our government needs to enlist every tool available to provide people with protection, Pistora said.

“Our regulators cannot allow utilities to assume ‘business as usual’ when the pandemic has made life most unusual,” he said.

The KCC staff report offered great detail into the past-due accounts the utility companies have on the books since the state’s moratorium expired.

For instance, total past due balances for Kansas Gas Service declined from a high of $12.9 million in June to $7.66 million in October.

It increased to $8.9 million in November, about $458,014 more than the company had in November 2019.

Kansas Gas reported that it had disconnected 13,114 residential customers for nonpayment since June 2020, of which 9,250 have regained their service.

The company had a net of 3,864 customers disconnected, or 0.66% of Kansas Gas Service’s total of 589,780 residential customers.

Meanwhile, past-due balances for Evergy in the old Westar service area declined from a high of $23.8 million in June to a low of $10.37 million in October.

They increased to $14.88 million in November, bringing the amount to a level higher than it was in November 2019 by $3.1 million.

The number of Evergy customers in the Westar service area with late accounts — not counting payment plans — increased during November 2020 as well, but it was still lower than the same time period in 2019, the staff said.

The company has disconnected 27,317 residential customers since the commission’s moratorium expired at the end of May.

Of those customers, 21,910 have been reconnected for net disconnections of 5,407 residential customers, or 0.86% of Evergy’s 630,269 residential customers in that area.