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Overdue electric bill amounts soar as COVID-19 impacts homes, businesses   

Charles Cassara, owner of SC Fitness in Farmingdale, said on Oct. 8 that he thought he would be able to keep his head above water regarding his business' expenses. But, he is concerned because, although his bills are back up to 100% each month, his gym is only allowed to operate at 33%. Credit: Barry Sloan

Long Island homes and businesses beset by the combined impacts of COVID-19 and seasonally higher energy use are behind on their electric bills by more than $150 million, according to recent PSEG/LIPA figures.

Electric bills more than 30 days past due as of September showed $33.5 million in arrears for commercial customers, up 53% from $21.9 million in September 2019. Residential amounts over 30 days past due totaled $120.9 million, up 20% from $100.4 million last year.

The number of commercial accounts late with their bills increased to 19,214 this year, compared with 17,286 a year ago, while the number of residential customers with overdue bills declined, even as the dollar amount soared, to 183,175 compared with 194,279 in September of 2019.

The combined $154.4 million in arrears in September surpasses overdue bills during a previous high point of May 2009 in the wake of the Great Recession, when 183,831 customers were late paying $121.8 million in electric bills, Newsday reported at the time.

This year’s arrears are compounded by the inability of utilities across the state to use the tougher tactic of a threatened shut-off to get customers to pay their bills, after the state passed legislation that bars shut-offs until the end of March. PSEG Long Island and other utilities had largely ended shut-offs tied to nonpayment of bills due to the pandemic this past March. PSEG operates the Long Island power grid under a contract with LIPA.

LIPA chief executive Tom Falcone said the amounts are "manageable" as a percentage of LIPA’s overall $3.4 billion annual budget. He said LIPA has already begun to make allowances for higher write-offs of some of those bills as customers are "unable to pay," booking reserves to cover them. Any unpaid amounts would ultimately be absorbed by other LIPA ratepayers in future budgets.

"Given the effects of the pandemic, you would expect not all customers are in the position to pay bills or to afford electricity," Falcone said.

PSEG manager Richard Tinelli said PSEG was monitoring the arrears "very closely," and has been tracking improving unemployment levels with the hope that more customers going back to work could turn the arrears around.

Unemployment on Long Island, which hit 16% at the end of April, crept downward to 10.5% in August, "so things are trending in the right direction," he said.

One Long Island customer who is behind on his electric bill after months of statewide lockdowns of fitness centers and gyms is Charles Cassara, owner of SC Fitness in Farmingdale. He got behind on bills early in the pandemic, but said he reached out to PSEG and tried to keep active on new balances.

"I haven’t paid a full bill, and I’ve been on that six-month program," of catching up on past-due balances as his revenue streams start back up with 33% occupancy levels in gyms.

"I should be caught up in arrears probably before the end of this year," he said. But he spoke of other gym owners who took a different route.

"I know a lot of people who just decided not to pay the LIPA, the National Grid, the Optimum bill, and focused more on [paying] the landlord," he said. " … For me it was important to pay my basic bills."

Richard Berkley, executive director of the Public Utility Law Project, an Albany-based utility watchdog group, said that arrears statewide continue to trend upward. An analysis of gas and electric company arrears that excludes PSEG found that 1.06 million residential customers were late paying their bill as of August, with a total amount late of $985 million. Year to date, that’s a jump of 237,924 customers representing $292.6 million, a 40% increase.

Berkley applauded New York as the only state in the nation to pass legislation that precludes utilities from shutting off customers for nonpayment until March 31, or 180 days after the state of emergency is lifted in the state. He said regulators, utilities and customers must get ready for that spring onslaught when bill collectors will get to work with shut-offs as a cudgel.

Ratepayers who are behind on their bills should call their utility company immediately, to work with the company to take advantage of the moratorium's suspension of payments during the 180 days, and to work with the utility on a payment plan if possible, he said.

Kim Soreil, PSEG’s manager of operations, said the company is working with customers to arrange payment plans, including some who find themselves suddenly unemployed and "in a situation now they’ve never experienced before." State offerings like the Home Energy Assistance Program can help impacted customers address heating costs and could qualify them for a discounted rate to qualified PSEG customers that could also save $25 a month.

"We’re here to help them now," said Brigitte Wynn, director of revenue operations.

As arrears continue, some businesses' electric use is gradually returning to pre-pandemic levels, according to LIPA. Commercial electric sales — which were down 18.9% year-over-year in April, during the pandemic shutdown — were down just 9.8% in August compared with the previous year. Meanwhile, residential sales saw a 4.8% year-over-year increase. The figures are adjusted for weather-related anomalies.

Between March and August, large commercial customers produced $936 million in revenue for LIPA, $32.3 million lower than the authority had budgeted. Sales to small commercial customers were $5.6 million lower than budgeted. Residential revenue is offsetting the declines, with $1.2 billion in sales from March to August, $60.1 million higher than planned.

Falcone, the LIPA CEO, told trustees there was "still pretty substantial reduced level of economic activity for our commercial customers," fueling the lower electric sales.

Shut-off moratorium

Gov. Andrew M. Cuomo in June signed legislation temporarily barring utilities from shutting off service to customers struggling financially due to the pandemic.

  • The first-in-the-country law prevents electric, gas, water and telecom utilities from turning off service for 180 days beyond the lifting of a state of emergency, or as late as March 31, due to nonpayment tied to COVID-19 woes.
  • Under the law, companies are required to restore service within two days to those whose power had been turned off since the lockdown began.
  • It requires utilities to work with customers to set up deferred payment plans to prevent them from being overwhelmed by back charges.
  • Utilities must inform customers of their right to continued service during the pandemic state of emergency.

For PSEG billing questions and assistance:

Residential customers: 800-490-0025

Business customers: 800-966-4818

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