Energize Weekly, May 6, 2020
The moves are also creating some financial risk and uncertainties for utilities, according to industry analysts.
Regulatory commissions in at least four states – New Hampshire, New York, Arizona, and North Carolina – have pushed back regulatory proceedings or rate increases for up to 90 days.
“As a result, Avista electric customers will see no rate increase this year,” the commission said in a statement. “The average gas customer using 66 therms a month will see an increase of about $1.56 per month, less than half the amount authorized in the rate case.”
In addition to the state actions, utilities in Kentucky, North Carolina and South Carolina have voluntarily sought temporary delays in rate increases set for this spring.
All fifty states have adopted some sort of program to prevent residential customers who fall behind in paying their bills from being disconnected. In 26 states it has been done by utility commission order, gubernatorial directive or legislation. The rest have voluntary programs.
The moves may offer some relief to customers as many businesses remain shut and unemployment has hit record highs, but they also present financial challenges for utilities.
“It is good that they are deferring bills now, but at some point the utilities are going to seek to collect that money,” said Cindy Schnonhaut, director of the Colorado Office of Consumer Counsel (OCC), which represents residential and small business customers.
The U.S. Energy Information Administration is forecasting a 4 percent drop in commercial and industrial (C&I) demand for the year.
“That relative shift between residential and C&I is dependent on the load mix from region to region,” Steve Fine, managing director of distributed grid strategy at ICF, told GTM News. “Lower sales translates into lower revenue if they don’t already have decoupling [of revenues for electricity sales] or some other mechanism in place.”
“We think state legislatures and governors will look to provide regulators with additional flexibility to reduce their docket backlog,” Moody’s said.
Among the states that have delayed rate dockets or rate increases are:
New Hampshire
New York
North Carolina
Arizona, where the Arizona Corporate Commission extended the docket on a $114.9 million rate case for Tucson Electric Power by two months.
Duke Energy’s North Carolina subsidiary in March asked the utility commissions to suspend its $467.4 million electric rate case for up to 60 days, while Duke’s Kentucky subsidiary told state regulators in March it would not implement a rate change prior to May 1 “to allow the commission more time to focus upon the immediate impacts of [the pandemic] upon all jurisdictional utilities and the customers they serve.”
In South Carolina, Dominion Energy was set to get a rate increase May 1, but asked the action be pushed back 60 days.
One utility moving ahead with a rate request is Xcel Energy’s subsidiary, Public Service Company of Colorado, which is seeking a $145 million natural gas rate increase.
Xcel, however, is holding to the statutory rate schedule which would put the rate increases – about 16 percent or $6.44 a month on the average residential bill – in place in November.
Xcel said that “Keeping the commission process and our operations moving forward is critical as the economy recovers and people return to work. … It’s part of what we’re doing to support our customers and communities at this time.”
