NC utility customers face $257M in overdue bills as shutoff ban expires amid pandemic

North Carolina residents struggling to stay employed and housed during the coronavirus crisis face more bad news Wednesday: $257 million in overdue utility bills.

Gov. Roy Cooper’s executive order directing the state’s utilities to temporarily halt disconnections expires just before midnight. Duke Energy, which is owed much of the overdue bills, has asked for clarification of whether a similar order by the state Utilities Commission also expires then.

Some utilities had already waived disconnections for unpaid bills during the pandemic before the orders were issued. Since April 1, according to the Utilities Commission, more than 1.3 million residential customers have been spared shutoffs of their electric, gas or water service.

Cooper’s order directed utilities to stop shutoffs, waive late fees and give customers at least six months after the end of the moratoriums to settle their overdue accounts. Consumer advocates say that won’t be time enough to help some avoid lose service in the midst of summer heat.

“I think it’s arguably the most critical issue in the state for the next few weeks,” said Al Ripley, director of the consumer housing and energy project at the North Carolina Justice Center, a Raleigh-based nonprofit group.

Ripley says potential disconnections loom as large as an expected surge of evictions due to delinquent rent payments that’s expected as courts restart hearing cases. Eviction hearings resumed in Mecklenburg County last week after most court activity was halted to curb the spread of COVID-19.

Trying to survive a pandemic without air conditioning or hot water to wash hands, Ripley contends, would invite a further spread of the virus and the risk of heat stroke.

“I’m very worried that we are going to have a public health catastrophe,” he said.

The center has proposed three options, including one for Congress to make federal loans to stabilize utilities that continue avoiding shutoffs. Of two state-level proposals, one would make similar state grants to utilities and the other would extend the repayment period for lower-income customers and those with certain health conditions.

A bill in the N.C. House that would transfer $200 million in coronavirus relief money to help residents pay mortgages, rent and utility bills, filed in May, failed to gain traction.

The state’s utilities reported to the Utilities Commission that, as of June 30, they had $257 million in past-due accounts.

About 130,000 Duke Energy customers in North Carolina were 60 days or more behind in their bills at the end of June, making them eligible for disconnections, spokesman Neil Nissan said. That’s about 8% higher than in the previous year.

A far larger number of Duke accounts, more than 500,000, are 30 days or more behind in payments but don’t face shutoffs. While that roughly matches overdue rates from a year ago, Duke says, the total amount of past-due bills has roughly doubled during the pandemic to $142 million.

Like other utilities, Duke says it’s been encouraging customers to pay what they can now to keep their debt manageable. It will allow customers one 30-day billing cycle to work out repayment schedules, after the moratoriums end, before resuming business as usual.

“We’ve been very flexible on payment options,” Nissan said. “We’ve tried to streamline functions so when customers reach out to us we know how to help them, including third-party options” such as nonprofit aid groups. “Our goal is that the disconnection process is a last resort.”

Duke and Dominion Energy, which serves northeastern North Carolina, account for more than half the state’s overdue bills. But three-quarters of the state’s utilities are owned by municipalities or quasi-government agencies that provide water and sewer service and, in some cases, electric power.

Charlotte Water reported $12 million in past-due accounts by June 30, and said about 16,000 customers became eligible for disconnections in June.

Small towns and cities that rely on utility revenue have felt a growing financial pinch during the disconnection ban.

In the Gaston County city of Cherryville, electric customers owed $80,000 on past due bills as of June 30, according to data reported to the state. But the city of 4,200 still had to make monthly payments to its wholesale supplier, ElectriCities of North Carolina.

Last week Cherryville notified customers that overdue customers had until Aug. 25 to settle their accounts before disconnections would resume.

“I think it’s going to be pretty difficult,” said finance director Dixie Wall. “Some of them felt like their bills are going to be forgiven, but that’s not the case. We’ve seen people that our customer service representatives know have steady incomes that still have chosen not to make payments.”

Salisbury has three to four times its normal number of past-due accounts for water and sewer service, said finance director Shannon Moore. But of 880 past-due customers at mid-July, fewer than 20 had arranged repayment schedules.

While the $393,000 overdue at that point poses no immediate threat to the city’s finances, Moore said, “we are seeing an uptick every month. What I’m more concerned about is the financial stress it’s going to cause customers” to settle their bills.