A Historic Effort in Illinois: Safeguarding Consumer Protections During Post-COVID Recovery by Carrie Zalewski, Chairman of the Illinois Commerce Commission
- Aug 7, 2020 3:18 pm GMT
The following is a contributed article by Carrie Zalewski, Chairman of the Illinois Commerce Commission
Since the beginning of the pandemic, Illinois has experienced one of the highest unemployment rates in decades, soaring above 14 percent. The stories of friends or family members who were suddenly out of work and in the virtual unemployment line due to COVID-19 have become all too familiar. While residents were staying home to do their part in stopping the spread of the virus, they were simultaneously facing mounting utility bills and an inability to pay them due to an immediate loss of income. As the state agency responsible to ensure reliable and affordable utility service, it became increasingly clear to us that people simply could not afford to pay their utility bills and we had to do something about it.
At the beginning of the COVID-19 outbreak, Governor J.B. Pritzker and Attorney General Kwame Raoul asked the Illinois Commerce Commission (ICC) to take action and ensure that Illinois citizens remain connected to essential utility services through the COVID-19 public health emergency. On March 18, 2020, the ICC initiated a proceeding and issued an Emergency Order in Docket 20-0309, imposing a moratorium on service disconnections and late payment fee impositions, and further ordering the implementation of temporary, more flexible credit and collection procedures by electric, natural gas, water and sewer utilities subject to the Commission’s jurisdiction, pending the COVID-19 state of emergency. Concurrently, the ICC initiated additional proceedings to stop door-to-door marketing by alternative retail electric and gas suppliers.
Over the course of several months, ICC Staff, Illinois utilities and consumer advocates, including the Citizens Utility Board, the Attorney General’s Office, the City of Chicago, Community Organizing and Family Issues, the Legal Aid Society of Metropolitan Family Services, Allen Cherry, and Illinois Industrial Energy Consumers, engaged in extensive discussions and negotiations on fundamental safeguards and equitable mechanisms to ease the burden on Illinois ratepayers during the post-COVID recovery. It was no easy task, but these negotiations resulted in two historic Stipulations that ICC adopted on June 18, 2020 in the Commission Order in Docket 20-0309 (available at ICC website). The Stipulations draw a path forward on utility credit and collection practices as the state reopens, focusing on the following key areas: disconnection moratorium, fee waivers, reconnection, deferred payment agreements, credit reporting, debt forgiveness, and utility cost recovery. As comprehensive remedies, these Stipulations may serve as a model for other states to follow.
The first stipulation, Large Utility Stipulation, concerns the two largest electric utilities (ComEd, and Ameren), the four largest natural gas utilities (Nicor, Peoples Gas, North Shore, and Ameren) and the three largest water and sewer utilities (Illinois American, Aqua Illinois, and Utility Services of Illinois). The second stipulation, Small Utility Stipulation, applies to smaller public utilities, including MidAmerican, Mt. Carmel, Liberty, Illinois Gas, and Consumers Gas.
Importantly, the Stipulations extended the moratorium on service disconnections and late payment fee impositions until all Illinois regions move to Phase 4 of Governor Pritzker’s Restore Illinois Plan, which occurred on June 26, 2020. For many customers, the Stipulations provided a 30-day grace period for the moratorium’s expiration; and further recognizing the inescapable reality of high joblessness claims, most of the stipulated utilities have since voluntarily agreed to extend the moratorium on disconnections for residential customers until the end of August 2020.
Large utilities and some of the small utilities will also waive deposit requirements associated with late payment or non-payment, arrearages, or credit related issues for residential customers until August 25, or even further. To protect customers’ credit rating during these unprecedented times, the utilities will not report late payments and non-payments on open customer accounts to credit bureaus and agencies.
Similarly, the Stipulations expanded the ability for residential customers to get reconnected if they recently lost service, and waive any reconnection fees for at least six-months for LIHEAP qualified customers and customers experiencing financial hardship. Reconnected residential customers can enter into long-term Deferred Payment Plans for their outstanding balance, with up to 10% down payments, a lower threshold than normally required. Deferred payment arrangements are also available for some commercial and industrial customers with a shorter term and a larger down payment.
Most importantly, the utilities will set aside funds to provide some debt relief for their low-income residential customers. Each utility will forgive some arrearages (varying by utilities, ranging from $75 to $500) for qualifying low- or moderate-income residential customers, subject to caps and funding availability, and on a first-come-first-served basis.
One of the most remarkable provisions of these agreements is the ability for customers to self-certify verbally to utilities that they are experiencing hardship due to COVID-19. For the sake of expediency, this will allow them to bypass the burdensome additional steps usually required to get the financial assistance they need.
Recovery Mechanism for Utilities
With the duty to provide safe and reliable service, utilities were also impacted by COVID-19. A landmark provision of the agreements includes a requirement for the utilities to track and report to the Commission their COVID-19 costs in order to enable a meaningful Commission review of such spending. Utilities will recover reasonable and prudent costs through a specific COVID-19 rider, that are subject to the Commission review and allows for consumer advocate participation and comments. The cost recovery will be shared among the customer classes proportioned to the relief they receive and generally recovered over multiple years to reduce burdens on rates.
Lastly, large gas and electric utilities must report to the Commission zip-code specific data concerning customer participation in these programs for closer evaluation. They have also agreed to engage in further discussions with all relevant stakeholders on improving affordability of the utility services in Illinois, including the effectiveness and accessibility of the existing programs.
All of the participants in these negotiations should be commended for their hard work and commitment. We at the Commission, and me personally, are paying close attention to ensuring Illinois’ ability to navigate this crisis while balancing the interests between the customer’s ability to afford service and the utilities’ ability to keep their services reliable and safe.
More details on the Stipulations, utility commitments and compliance is available on the Commission’s website in ICC Docket 20-0309 or the ICC’s COVID-19 website at https://www.icc.illinois.gov/home/covid-19.
 Illinois Department of Employment Security, Current Monthly Unemployment Rates, June 2020, available at https://www2.illinois.gov/ides/lmi/Pages/Current_Monthly_Unemployment_Rates.aspx
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