Free Enterprise in Energy, Fact or Fiction?

Between recovering costs, addressing unpaid bills and newly adopted legislation, utilities are facing monumental challenges.  With continued uncertainty on how to combat the current heatwave and maintain resiliency, public power companies, cooperatives and invester-owned utilities must decide what to do next.    There are many paths ahead but which ones will lead to success?  PG&E had to cancel its proposed microgrid projects and Southern California Edison (SCE) postponed similar plans to boost resiliency, citing tight deadlines and inflated costs.  Speaking of costs, utilities have suspended shut-offs for months but will soon make an effort to collect payments.  Connecticut lawmakers are working on ways to delay those plans.  “I think it’s high time we do something that really focuses on what consumers and ratepayers really need,” said Rep. Liz Linehan, D – Cheshire.  Among their ideas,  state regulators would be asked to consider an interim rate decrease. They have also proposed compensation for outages that last longer than three days where customers would receive a credit of $125 a day and up to $1,000 for lost food and medicine. To further accommodate customers in need, lawmakers would ask utility companies to set up regional service centers staffed with Connecticut-based workers.  The bill would tie the company’s performance and its profits more closely.  “There have been a number of proposals brought up by political leaders that range from well-informed to some that show a misunderstanding of the facts… We do support creating a transparent, performance-based environment, that’s grounded in facts, defined metrics, and builds a better overall system for our customers,” commented a spokesperson for Eversource.  In Virginia, Gov. Ralph Northam wants Dominion Energy to cover unpaid residential electric bills with $320 million that regulators say the company previously overcharged.  Under the governor’s plan, which still has to be approved by lawmakers, customers who have bills that are more than 60 days overdue as of Sept. 30 would have them forgiven.  The governor’s proposal would require all utilities in the state to offer repayment plans for unpaid bills that don’t charge interest or late fees.  Steve Johnson, a spokesperson for the Virginia, Maryland and Delaware Association of Electric Co-ops said “Unlike Dominion or (Appalachian Power), not-for-profit utilities don’t have a whole lot of options when it comes to recovering those costs.” 

Legislators, however, have indicated that utility legislation is a low priority this session.  While they have not yet commented, Dominion Energy did expand its $13 million annual EnergyShare program contribution in Virginia by $1 million this year to help customers in need of assistance due to coronavirus.  This would provide immediate benefits to customers struggling to pay their utility bill.  But if required to waive repayment or if interest, late fees and disconnections are removed from the equation, how would it impact utility business and free enterprise in energy?  In this case, would the involvement of lawmakers be an adjunct or an obstacle to utility companies?  Either way, it will be an uphill battle back to 'business as usual.'