COVID-19 Electric Utility Disconnections

June 9, 2020 R46401

COVID-19 Electric Utility Disconnections
June 9, 2020
In response to the COVID-19 pandemic, many utilities, local governments, and state
governments have implemented policies to suspend disconnections for nonpayment, known as
Richard J. Campbell
disconnection moratoria. The exact number of moratoria is unknown. CRS has identified 1,055
Specialist in Energy Policy
electric distribution utilities that had implemented a moratorium as of May 7, 2020.

Approximately 88% of residential utility customers in U.S. states, U.S. territories, and the
Ashley J. Lawson
District of Columbia are served by one of these utilities. Research by other entities indicates that
Analyst in Energy Policy
the actual number of moratoria (and covered customers) is higher.

Electricity disconnection moratoria vary in scope, duration, and related provisions such as

whether utilities may charge late fees or restore power to previously disconnected customers.
These differences influence the potential impacts for customers and utilities. Many moratoria have been revised or extended
(sometimes multiple times) throughout the course of the COVID-19 pandemic, creating challenges for assessing potential
impacts.
Few moratoria create universal bans on disconnection for nonpayment, so customers whose utility has a moratorium in place
might still lose power if they do not pay their bills. Some moratoria cover a subset of electricity customers, such as residential
customers, low-income customers, or senior citizens. Others require customers to take certain actions to prevent
disconnection, for example by arranging a payment plan with the utility. Some of these moratoria are set to expire before the
summer, causing some to raise concerns that disconnected vulnerable populations may be unable to cool their homes during
the summer heat.
Pursuant to the Federal Power Act, utility disconnection policies are not in federal jurisdiction. Utility policies affecting
customers, such as procedures for disconnecting consumers who do not pay their bills, are approved at the state or local level,
depending on utility ownership type. Under the Public Utility Regulatory Policies Act (PURPA; P.L. 95-617), state
regulatory authorities are required to consider the implementation of certain standards (16 U.S.C. §2623, Adoption of certain
standards). Among these standards are “Procedures for Termination of Electric Service” (16 U.S.C. §2625(g)), which allows
state regulatory authorities to establish utility disconnection policies for electricity consumers.
Several bills introduced in 2020, including H.R. 6800 (The Heroes Act), would effectively establish a national disconnection
moratorium. These bills would not directly alter existing utility disconnection policies, which the Federal Power Act
delegates to the states. Instead, collection procedures by customer billing departments of electric utilities may be included
under the suspended actions by “debt collectors” as defined by the bills. The moratorium in these bills would apply to electric
utilities, as well as other utilities (e.g., natural gas, telecommunications, and water).
Some utilities may face a revenue shortfall (i.e., insufficient revenue to recover costs) as a result of disconnection moratoria
and other factors arising from the COVID-19 pandemic. Some of those utilities may seek to address revenue shortfalls by
increasing future electricity rates. Investor-owned utilities may be in a relatively better position to survive a period of revenue
shortfalls, given that they are generally larger and well-financed. In contrast, publicly owned utilities and electric
cooperatives may have fewer financing options and face greater challenges.
The economic relief laws passed in response to COVID-19, particularly the CARES Act (P.L. 116-136), may reduce cases of
utility bill nonpayment, thus avoiding cases where disconnections might otherwise take place. The CARES Act included
several provisions that either directly or indirectly provided financing that customers could use to pay utility bills. Relevant
provisions include the 2020 recovery rebates (“stimulus payments”) to individuals; Paycheck Protection Program (PPP) loans
that businesses could use to cover utility expenses; and supplemental appropriations for the Low Income Home Energy
Assistance Program (LIHEAP), a federal grant program for states, tribes, and territories to operate home energy assistance
programs for low-income households.
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COVID-19 Electric Utility Disconnections

Introduction
To limit the spread of COVID-19 in the United States, many state and local governments required
or encouraged residents to stay at home as much as possible during March, April, and May 2020.1
These actions increased interest in residential utility service access, especially water and
electricity.2 Many utilities, local governments, and state governments have implemented policies
to suspend disconnections for nonpayment (i.e., when utility service is stopped after customers
fail to fully pay a utility bill). These policies are known as disconnection moratoria. These
policies do not relieve customers of the requirement to pay their utility bills (i.e., they are not bill
forgiveness policies). They are designed to ensure that customers continue receiving electricity
service even if they cannot pay their electricity bill.3
The COVID-19 emergency and state stay-at-home orders have led to decreasing demand for
electricity from commercial and industrial customers. While residential demand may have
increased due to workers and children staying home, the result for many utilities has been a net
decrease in demand that generally results in decreased revenues. Disconnection moratoria might
further reduce utility revenues if customers stop paying their bills. The potential impacts on
electric utilities of not being able to collect amounts owed from consumers would likely vary
based on the type (i.e., investor-owned, publicly owned or cooperative), the size of utility, and the
regulatory environment.
This report discusses the status of electric utility disconnection moratoria during the COVID-19
emergency, and potential policy considerations that could arise, especially if moratoria remain in
place for an extended period of time. The focus of this report is implications for residential
customers and utilities.
Background
Types of Electric Utilities
According to the U.S. Energy Information Administration (EIA), 2,938 electric utilities operate in
the United States, including U.S. territories.4 Electricity distribution utilities (herein, utilities)
deliver power directly to most residential electricity consumers in the United States.5 Utility
ownership structures and regulatory frameworks vary. There are three main types of electric
utilities, briefly described below.
 Investor-owned utilities, or IOUs, are privately owned companies that issue
stock to shareholders. They are typically large, in terms of customers and service
territory. Almost three-quarters of U.S. utility customers (residential, commercial,

1 For background on COVID-19, see CRS Report R46319, Novel Coronavirus 2019 (COVID-19): Q&A on Global
Implications and Responses, coordinated by Tiaji Salaam-Blyther.
2 This report focuses on electricity service. Water service is discussed in CRS Insight IN11338, COVID-19 and Public
Water Service Continuity, by Elena H. Humphreys and Mary Tiemann.
3 Many consumers also have access to bill assistance programs that help avoid disconnections by providing funds for
bill payment. One of these is the Low Income Home Energy Assistance Program (LIHEAP), discussed in CRS Report
RL31865, LIHEAP: Program and Funding, by Libby Perl.
4 U.S. Energy Information Administration (EIA), “Investor-Owned Utilities Served 72% of U.S. Electricity Customers
in 2017,” August 15, 2019, https://www.eia.gov/todayinenergy/detail.php?id=40913.
5 Some large electricity consumers can purchase power directly from electricity generators in some regions of the
country, but this does not typically apply to residential customers.
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COVID-19 Electric Utility Disconnections

and others) get their electricity from these companies. IOUs are most prevalent in
heavily populated areas on the East and West coasts. IOU customer rates are set
and regulated by states through a public process that includes some customer
participation. Utility rates are set to recover costs and earn a reasonable return as
profits for investors in return for the risk they bear for investing in new facilities.
 Publicly owned utilities, or POUs, include state-run utilities, municipal-run
utilities, and public utility districts—utilities that residents vote into existence
that operate independently of city or state governments. Many POUs have
relatively few customers, but some, such as the state-run Puerto Rico Electric
Power Authority (PREPA) and the municipal utility Los Angeles Department of
Water and Power, have more than 1 million customers. POU customer rates are
set by each utility’s governing body—a board or local government in a public
forum. Municipal utilities may return a portion of net income to the general fund
of the local government. Rates are set to recover costs and earn additional return
to maintain bond ratings and invest in new facilities. POUs are owned by a local
government body and/or customers or members of the utility.
 Electric Cooperatives, or co-ops, are not-for-profit member-owned utilities. Co-
ops are located in 47 states but are most prevalent in the Midwest and Southeast.
Co-ops’ rate-setting policies are similar to POUs. Any revenues in excess of the
cost of providing service are returned to the members. As nonprofit entities, they
are required to provide electric service to their members at cost. Co-ops are
owned by the consumers they serve.
POUs are the most common type of utility in the United States, with the smallest average number
of electricity customers. In 2017, 1,958 POUs served an average of 12,100 customers each; 812
co-ops served an average of 24,500 customers each; and 168 IOUs served an average of 654,600
customers each.6
Utility policies affecting customers, such as procedures for disconnecting consumers who do not
pay their bills, are approved at the state or local level depending on utility ownership type. State
regulatory bodies generally must approve policies for IOUs. POUs and co-ops often set their own
policies. Utility customers generally agree to these policies when they agree to be interconnected
(i.e., receive electricity service).
Utilities have some financial incentive to avoid disconnecting a customer, even for nonpayment.
Disconnections come at a cost to the utility, for example, the staff time required to disconnect a
customer. In many cases, disconnection requires a utility worker to visit the customer’s residence,
and utilities may prefer to limit such instances as part of their COVID-19 social distancing plans
to protect their workers. Utilities generally benefit when customers utilize financial assistance
programs, because the utility continues earning revenue for electricity sold and avoids
disconnection costs.
Current Federal Law Regarding Utility Disconnections
Under the Public Utility Regulatory Policies Act (PURPA; P.L. 95-617), state regulatory
authorities are required to consider the implementation of certain standards (16 U.S.C. §2623,
Adoption of certain standards). Among these standards are “Procedures for Termination of
Electric Service” (16 U.S.C. §2625(g)), which allows state regulatory authorities to establish

6 U.S. Energy Information Administration (EIA), “Investor-Owned Utilities Served 72% of U.S. Electricity Customers
in 2017,” August 15, 2019, https://www.eia.gov/todayinenergy/detail.php?id=40913.
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utility disconnection policies for electricity consumers, if they chose to, in accord with the
section:
The procedures for termination of service referred to in section 2623(b)(4) of this title are
procedures prescribed by the State regulatory authority (with respect to electric utilities for
which it has ratemaking authority) or by the nonregulated electric utility which provide
that—
(1) no electric service to an electric consumer may be terminated unless reasonable prior
notice (including notice of rights and remedies) is given to such consumer and such
consumer has a reasonable opportunity to dispute the reasons for such termination, and
(2) during any period when termination of service to an electric consumer would be
especially dangerous to health, as determined by the State regulatory authority (with
respect to an electric utility for which it has ratemaking authority) or nonregulated electric
utility, and such consumer establishes that—(A) he is unable to pay for such service in
accordance with the requirements of the utility’s billing, or (B) he is able to pay for such
service but only in installments, such service may not be terminated.
Such procedures shall take into account the need to include reasonable provisions for
elderly and handicapped consumers.
How Many Utilities Have a Disconnection
Moratorium in Place?
CRS is not aware of a comprehensive tally of disconnection moratoria for all 2,938 U.S. utilities.
Any such tally would require frequent updating, because state, local government, and utility
responses to COVID-19 continue to change.
CRS researched disconnection moratoria that were publicly announced as of May 7, 2020. To
identify utilities with disconnection moratoria, CRS confirmed statewide policies compiled by the
National Association of Regulatory Utility Commissioners (NARUC).7 CRS additionally
reviewed individual utility websites for utilities in U.S. states, U.S. territories, and the District of
Columbia. For U.S. states, CRS reviewed websites for utilities serving at least 70,000 residential
customers.
CRS identified that as of May 7, 2020, there were at least 1,055 utilities that had publicly
announced disconnection moratoria. Of these, 708 utilities were under a mandatory order to do
so, and 347 were voluntary.8 These moratoria cover utilities serving approximately 88% of U.S.
residential customers.9 These statistics are summarized in Table 1.

7 The State Response Tracker, hosted by the National Association of Regulatory Utility Commissioners (NARUC), lists
executive orders, public utility commission orders, and related press releases concerning utility actions in response to
COVID-19. CRS confirmed the scope and extent of disconnection moratoria by reviewing these documents. See
https://www.naruc.org/compilation-of-covid-19-news-resources/state-response-tracker/.
8 Mandatory orders were issued by governors or utility commissions. In some cases, utilities may have implemented
voluntary policies before mandatory orders came into effect. In this report, voluntary policies refer to those made in
absence of a mandatory order. Most voluntary policies identified by CRS were implemented by POUs or co-ops.
9 CRS estimated the number of residential customers covered by a moratorium using EIA electricity sales data for
2018, the latest year available. EIA reports electricity sales data by customer class (e.g., residential, commercial). EIA
does not report electricity sales data with the detail needed to match the exact number of customers covered by a given
utility moratorium. Additionally, a residential electricity customer is typically one household. The number of
individuals affected by disconnection moratoria is likely larger than the number of customers, because many
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Other research suggests the actual number of utilities with moratoria is higher. For example, the
American Public Power Association (APPA), a trade association representing POUs, reported at
least 1,700 POUs had moratoria in place.10 This exceeds the 368 POU moratoria identified by
CRS using the methodology previously described. Additionally, some utilities that have not
publicly announced moratoria may nonetheless be delaying or suspending disconnections. Not all
moratoria apply to all customers (e.g., some include a maximum income threshold below which
the moratorium applies); CRS did not identify the scope of coverage for disconnection moratoria.
Table 1. CRS-Identified Utilities with Disconnection Moratoria
As of May 7, 2020
Residential
Utility Type
Mandatory
Voluntary
Total
Customers
Investor-owned
186
69
255
86,706,233
Publicly owned
226
142
368
14,894,801
Cooperative
296
136
432
11,356,148
Total
708
347
1,055
112,957,182
Source: CRS assessment of utilities in U.S. states, U.S. territories, and the District of Columbia, using the
National Association of Regulatory Utility Commissioners’ State Response Tracker, state government
documents, and utility websites.
Notes: “Mandatory” means that a utility is required by a state authority to suspend disconnections for some
period of time in response to the COVID-19 emergency. Voluntary means a utility announced a suspension in
absence of a state requirement. Some utilities under mandatory orders to suspend disconnections may have also
voluntarily done so before the requirement took effect. Utilities (other than those represented here) may have
voluntarily suspended disconnections. The information in this table does not consider the duration of
disconnection moratoria. Policies included in this count may not be in effect after May 7, 2020. The number of
residential customers is based on 2018 data from the U.S. Energy Information Administration (EIA). EIA reported
127,717,773 U.S. residential utility customers (including U.S. territories and the District of Columbia) in that
year. Utility customers are typically reported as accounts (e.g., household). The number of individuals affected by
disconnection policies is likely larger than the number of customers, because many households have multiple
individuals living in them.
The disconnection moratoria identified by CRS cover different time periods. For example, some
are in effect for as long as a state of emergency is in place. Many states have extended their
declarations of a state of emergency in response to COVID-19, so those moratoria time periods
would also have automatically been extended. Some disconnection moratoria cover a specific
time period, such as “through the end of the month” or “until June 1.” Others are in place “until
further notice.” Many moratoria have been extended past the originally announced end date. State
officials and utilities may continue to extend moratoria in response to local conditions. These
changing conditions make it challenging to assess the duration of disconnection moratoria at a
national level.
Some disconnection moratoria include related provisions, such as a ban on collecting late fees or
restoration of electricity service to previously disconnected customers.
Some disconnection moratoria’s expiration dates arrive with the summer season, a time of year
when electricity demand typically peaks because of air conditioning use. Concerns have been

households have multiple individuals living in them.
10 Arianna Skibell, “Public Utilities to Congress: Give Us $4.3B to Keep Lights On,” E&E News, May 11, 2020.
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raised that disconnections for nonpayment may return, with potential health impacts to vulnerable
populations from the summer heat.11
Do Moratoria Stop All Disconnections?
Anecdotal information, such as news reports, indicates that some utilities are disconnecting some
customers for nonpayment during the COVID-19 emergency.12 CRS has not identified any
utilities publicly announcing that their disconnection procedures would continue unchanged
throughout the COVID-19 emergency. CRS has identified some utilities with no publicly
announced disconnection moratorium in place. In these cases, the utility encouraged customers to
contact the utility to establish payment plans or for assistance with accessing financial assistance
programs. This suggests that even utilities with no announced moratorium may, in fact, be taking
action to prevent disconnections.
Some of the moratoria included in Table 1 allow for disconnections for nonpayment under certain
circumstances. For example, some of the suspensions cover a subset of electricity customers, such
as residential customers, low-income customers, or senior citizens. Customers that do not meet
relevant criteria might still be disconnected for nonpayment. Other moratoria require customers to
take certain actions to prevent disconnection, for example by arranging a payment plan with the
utility.
Revenue Shortfall
Utilities have reported mixed cost impacts related to COVID-19. Some operating costs, such as
protective equipment for employees, have gone up. Other costs, such as for fuel, have gone down
for some utilities. Lost revenue associated with disconnection moratoria represent an additional
cost for utilities.
Utilities typically recover all their costs through revenue (i.e., electricity sales). Total electricity
use (and utility sales) has declined since COVID-19 began impacting the United States, though
different regions of the country have been affected differently.13 Many observers expect electricity
use to remain below 2019 for the remainder of 2020, and some expect low electricity use to
persist beyond that.14
Utilities have different options to address the difference between their costs and revenue (i.e.,
their revenue shortfall). The ownership structure and regulatory framework described in the
section “Types of Electric Utilities” affect utilities’ options.
IOUs may be in a relatively stronger position to survive a period of revenue shortfalls given that
they are generally larger and well-financed. IOUs can also often address shortfalls by increasing

11 Jeffrey Tomich, “A Second Wave of Pain: Looming Utility Shut-Offs,” E&E News, May 21, 2020,
https://www.eenews.net/energywire/stories/1063189771.
12 For example, Juan Pablo Garnham, “Texas Utility Regulators Have Programs to Prevent Shutoffs During the
Pandemic. But Some Texans Are Falling Through the Cracks,” The Texas Tribune, April 18, 2020, and Alexander C.
Kaufman, “She’s a Furloughed Single Mom of 3. The Utility Is Shutting Off Her Power Anyway,” HuffPost, April 11,
2020.
13 EIA, “Daily Electricity Demand Impacts from COVID-19 Mitigation Efforts Differ by Region,” May 7, 2020,
https://www.eia.gov/todayinenergy/detail.php?id=43636.
14 For example, Mark Watson, “Analysis: Recession Forecast Brings Grim Outlook for Power Demand, Prices:
Observers,” S&P Global Platts, May 15, 2020.
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future electricity rates (which requires state approval). Some state regulators are already
establishing processes for IOU revenue shortfall cost recovery. For example:
FirstEnergy Corp. is navigating the coronavirus pandemic without the liquidity problems
some utilities are facing…. FirstEnergy is also insulated over the long term from declines
in revenues in at least three of the states where it operates, [CEO Charles] Jones said. In
Ohio and Pennsylvania, FirstEnergy’s companies have the ability to add riders to rates in
order to charge all of its customers for what may become uncollectible expenses from
unpaid bills during the pandemic. And in Maryland, the Public Service Commission earlier
this month issued an order authorizing the company to defer for future recovery “all
prudent, incremental COVID-19 related costs.”15
Smaller utilities generally do not have the cash reserves of the larger IOUs, with POUs and co-
ops generally setting rates based on costs without typically having the recourse to submit rate
cases to state regulatory commissions to collect revenue shortfalls. Some co-ops are already
reporting revenue shortfalls and strains on operations. For example:
Electric cooperatives talked … about the lost revenue they face as restaurants and other
commercial and industrial businesses are closed to maintain social distancing. For the
Cherryland Electric Cooperative in Michigan, seven or eight revenue contributors of the
utility’s top 10 commercial accounts temporarily stopped operating. “That’s at least a half-
million in revenue that I won’t see,” said Tony Anderson, Cherryland Electric’s general
manager. “It’s going to hit every aspect of that co-op.” … Electric cooperatives typically
serve rural areas of the state. The coronavirus has spread faster in cities, but rural areas
typically have less resources, which means the virus could pack a bigger punch in those
places. Co-ops also don’t have corporate shareholders to help absorb the revenue losses.
That money must be made up another way, typically by raising everyone’s rates down the
road.16
Legislation
Several bills introduced in 2020 would effectively establish a national disconnection moratorium.
These bills would not directly alter utility existing disconnection policies, which the Federal
Power Act delegates to the states.17 Collection procedures by electric utility customer billing
departments would likely be included under the suspended actions by “debt collectors” as defined
by the bills.
 H.R. 6379, the Take Responsibility for Workers and Families Act, introduced in
March 2020, includes a provision (Section 110) that would prevent debt
collectors from disconnecting utility services during the national emergency
relating to COVID-19, among other actions.
 H.R. 6800, The Heroes Act, passed by the House in May 2020, includes a similar
provision (Section 110402). The provision in this bill would prevent
disconnections during the national emergency relating to COVID-19 and for 120
days afterward.

15 John Funk, “FirstEnergy’s ‘Bullet-Proof’ Pandemic Strategy: $3.5B in Liquidity, Favorable Rate Structure,” Utility
Dive, April 27, 2020, https://www.utilitydive.com/news/firstenergys-bullet-proof-pandemic-strategy-35b-in-liquidity-
favorab/576765/.
16 Edward Klump and Kristi E. Swartz, “Coronavirus and Electricity: 3 Issues to Watch,” E&E News, April 9, 2020,
https://www.eenews.net/energywire/stories/1062824045.
17 16 U.S.C. §824.
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The economic relief laws passed in response to COVID-19, particularly the CARES Act (P.L.
116-136), may reduce cases of utility bill nonpayment, thus avoiding cases where disconnections
might otherwise take place.
 Many Americans received 2020 recovery rebates (“stimulus payments”) pursuant
to the CARES Act.18 Utility customers could have chosen to use some of those
payments to pay utility bills.
 Many businesses received loans through the newly established Paycheck
Protection Program (PPP).19 The law specifies expenses that may be covered by
PPP loans—utilities are an included expense. Many disconnection moratoria
implemented as of May 7, 2020, did not include business customers; however,
utility revenue shortfall may be less if businesses continue paying utility bills.
 The CARES Act provides $900 million in supplemental appropriations for the
Low Income Home Energy Assistance Program (LIHEAP). Many states that
experience their highest use of electricity in the summer allow recipients to use
LIHEAP funds for cooling expenses (e.g., electricity bills).20
In the weeks following passage of the CARES Act, some stakeholders raised concerns that POUs
and co-ops, because of their not-for-profit status, might not have access to the same economic
relief programs that other businesses have.21 On May 19, 2020, the Small Business
Administration addressed one of these concerns by stating that co-ops are eligible for PPP loans.22

Author Information

Richard J. Campbell
Ashley J. Lawson
Specialist in Energy Policy
Analyst in Energy Policy

18 For further discussion, see CRS Insight IN11282, COVID-19 and Direct Payments to Individuals: Summary of the
2020 Recovery Rebates/Economic Impact Payments in the CARES Act (P.L. 116-136), by Margot L. Crandall-Hollick.
19 For further discussion, see CRS Insight IN11324, CARES Act Assistance for Employers and Employees—The
Paycheck Protection Program, Employee Retention Tax Credit, and Unemployment Insurance Benefits: Overview
(Part 1), coordinated by Molly F. Sherlock.
20 For further discussion, see CRS Report RL31865, LIHEAP: Program and Funding, by Libby Perl.
21 For example, April 1, 2020, National Rural Electric Cooperative Association (NRECA) letter to Treasury Secretary
Steven Mnuchin, available at https://www.cooperative.com/programs-services/communications/Documents/
NRECA%20Letter%20to%20SBA%20and%20Treasury%20on%20Paycheck%20Protection%20Program.pdf, and May
8, 2020, American Public Power Association (APPA) letter to Congressional leadership, available at
https://www.publicpower.org/system/files/documents/APPA%20LTR%20to%20Leadership%20on%20COVID-
19%20Legislation%20%28May%208%2C%202020%29.pdf.
22 U.S. Small Business Administration, “Business Loan Program Temporary Changes; Paycheck Protection Program—
Eligibility of Certain Electric Cooperatives,” 85 Federal Register pp. 29847-29849, May 19, 2020.
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