Ban On Shutoffs Squeezes Small Utilities, But Governor Resists Call To End It

Jul 7, 2020

Gov. Roy Cooper on Tuesday resisted calls to rescind an executive order that bans utility shutoffs amid the coronavirus pandemic. State Treasurer Dale Folwell says it's hurting small co-ops and municipally owned utilities. 

Executive Order 142 runs until July 31. At Tuesday's Council of State meeting,  Cooper said it has helped thousands of North Carolina customers who can't pay their bills. Folwell urged the governor to rescind the order, which he says is a hardship for small citizen-owned utilities. 

State Treasurer Dale Folwell
Credit North Carolina State Government

"If we don't do this, I believe that we're signing a death certificate for many rural North Carolina communities, especially those in the east," Folwell said.

Besides prohibiting electricity, water and gas disconnections, Cooper's order also bans late fees or other penalties for nonpayment. It doesn't wipe out the bills entirely - customers have up to six months to pay what they owe. 

But that means city-owned utilities and electric co-ops face months of reduced revenues, and some aren't prepared. 

Seeking Relief 

Attorney General Josh Stein on July 1 waived the rules for the electric utility owned by Elizabeth City, in eastern North Carolina. Officials there warned it was near bankruptcy. And the town of LaGrange, also in the east, has filed a lawsuit for a similar exemption. 

Cooper defended the rules, saying they have prevented 179,000 North Carolina families from being disconnected during the COVID-19 outbreak. 

"This executive order lasts a little more than three more weeks. And we are telling people that it is unlikely that this executive order would be renewed," Cooper said. 

Cooper told the Council of State that there was no way to reverse the executive order that delays shutoffs. But he acknowledged that when the order expires at the end of July, he probably wouldn't have the support to extend it further. 

The governor said both private and city-owned energy and water companies must start working out payment plans with their customers now.  

No Deep Pockets 

In and around North Carolina's urban areas, electricity, gas and water are provided by big companies that can absorb losses more easily. But elsewhere, public services often come from member-owned electric co-ops and city- or town-owned utilities. 

Union Power Cooperative delivers electricity to 77,000 customers in parts of Union, Stanly, Cabarrus, Mecklenburg, and Rowan counties. Spokeswoman Carrie Stroud said revenue losses are hitting hard. 

"We are much smaller than an investor-owned utility and deferred payments have a greater impact on our financial health and ability to faithfully serve all members," Stroud said in an email. 

"We are encouraging cooperative members experiencing financial hardships to contact us directly to arrange a proactive payment plan that eases the burden of continued deferred payments for the member, as well as for the cooperative," she said. 

Energy United, based in Statesville, has 110,000 customers in central and western North Carolina. About 11,000, or 10% of them are behind on payments. That's five times what it usually is at this time of year. 

Chief strategy officer Thomas Golden says those customers owe about $2.7 million since mid-March.

"We're starting to see the number of accounts sort of plateau. So we think whoever has been affected is probably affected at this point," Golden said. "But like I said, those dollar amounts continue to grow as the electricity usage continues to grow."

Golden says most customers owe $500 or less. Energy United recently mailed notices to customers urging them to either set up payment plans, or seek help from private or government energy assistance programs.