Utilities worry over proposal mandating faster reconnection of power service

More than 44 million Americans are struggling this month to pay energy bills, according to the U.S. Census Household Pulse Survey.

Half a million of those Americans are in Colorado. 

And their inability to pay electric or natural gas bills — or both — can mean service disconnection, and with winter chills ahead, that can be a life-or-death situation.

Struggling Coloradans can tap a wide range of energy assistance programs, but wrinkles in the system persist, energy access advocates say.

Rep. Chris Kennedy, D-Lakewood, hopes to iron out what he perceives to be one of those wrinkles — by prohibiting regulated power utilities from disconnecting services on a weekend, a state or federal holiday, or at noon or later on a weekday.

House Bill 1018 also directs the Public Utilities Commission to adopt rules mandating utilities to reconnect a service on the same day a customer makes such a request. That rule would apply from Monday to Friday and so long as it's not a holiday. 

It’s the same-day reconnection mandate that has Black Hills and Xcel Energy, Colorado's investor-owned utilities, concerned, effectively arguing they would prefer to work directly with customers, rather than be compelled to act through a legislatively-prescribed solution to a highly complicated issue.  

Matt Lindstrom, a spokesman for Xcel, told Colorado Politics that disconnection is always the last resort.

Fewer than 1% — 0.6% percent —  of Xcel’s residential Colorado customers were disconnected in 2021, he said. Xcel Energy serves 1.5 million Coloradans. 

Lindstrom said reconnecting services, particularly natural gas, pose logistical issues.

“It takes time to safely reconnect service, especially on the natural gas side, and we must ensure the safety of our employees and customers during this process,” he said. 

Several energy outreach programs are available to consumers who are struggling financially to pay energy bills:

• LIHEAP, the federal low-income home energy assistance program that got a $4.5 billion boost in its funding from the American Rescue Plan Act;
• LEAP, the Colorado version
• Energy Outreach Colorado; and, 
• programs offered by the investor-owned utilities, such as Black Hills' Energy Assistance Program and Xcel's version. 

Kennedy has kept his eye on energy assistance programs during the pandemic.

In 2020, he was one of four sponsors of a measure that sought to assist Coloradans struggling to pay utility bills during the early months of the pandemic by using federal CARES Act dollars.

The next year, Kennedy sponsored a bill to ensure a better funding source for the Energy Outreach Colorado program, which up to then had relied, at least in part, on severance taxes. That’s become an unstable funding source due to the ups and downs of the oil and gas industry over a number of years, not just during the pandemic. The Kennedy measure required utilities to charge customers more to help finance an energy assistance program for low-income residents. State officials said that small cost to consumers — starting with $0.50 this October, ramping up to $0.75 in October 2022 and then annually adjusted for inflation a year after —  translates to big help for the state’s most economically vulnerable residents. Revenue from the charge goes to Energy Outreach Colorado, the Colorado Energy Office and the Department of Human Services. There is an opt-out provision in the law.

Xcel Energy cited that new charge as among the reasons, albeit to a much lesser extent, why it sought permission from state regulators to increase energy bills during this winter. The main culprit for that rate hike is the sharp rise in natural gas prices, and a rate hike approved by the Colorado Public Utilities Commission.

That solved one of the funding issues, but a stickier one remained: how reconnections are handled.

Once an applicant has applied for an energy assistance program, that freezes the disconnection process, even if the consumer doesn’t qualify for the income-based program.

The other issue is how soon a consumer, who has paid the bill in full, gets back the power service.

Reconnecting electric service has become considerably easier over the years, with the advent of smart meters, known as advanced metering infrastructure (AMI), that can be turned off and on with the push of a button.

“If you're on AMI, you have to reconnect the same day. There's no excuse for not doing that,” Kennedy insisted.

But reconnecting someone’s natural gas service is trickier, and Kennedy’s bill to require same-day reconnection in most circumstances is causing what the lawmaker calls a "complicated fight” with the investor-owned utilities.

As it works now, if a consumer pays the overdue bill after 10 a.m., there’s no guarantee the service will be reconnected that day. Kennedy wants to ensure electric reconnection takes place the same day, so long as the request comes in at least one hour before the utility’s close of business.

Reconnecting natural gas is a different situation. Once natural gas service has been turned off, the tenant  —  whether at a home or business —   has to be at the site for the reconnection.

Kennedy’s bill, however, requires same day natural gas reconnection if the customer makes the request before 1 p.m.

Under the bill, a utility gets an extra day to reconnect the gas if the provider has made a “qualifying communication” with the customer, which means something more personal than sending emails, letters in the mail or robocalls, according to Kennedy. It would require “a real conversation” with the customer, either by phone or in person, that confirms the resident is aware that his or her service is about to be disconnected and the options for payment assistance, the legislator said.

Kennedy said the utilities have expressed concerns about the same day reconnection requirement for gas, pointing out that it’s both a cost issue to provide an in-person communication, as well as a matter of staffing.

That staffing came into sharp relief in the days after the Marshall fire, when electric and gas service was shut off to thousands of homes. Once it was safe to restore power and gas to the homes, Xcel Energy deployed its workers from all over the state to make that happen. But it also meant diverting employees away from other parts of the state, including those who are responsible for reconnecting services. It's an example of the logistical problem Kennedy's bill may pose for the utilities. 

Black Hills Energy has fully deployed AMI meters to all of its electric customers, according to Carly West of Black Hills Energy, which serves 99,000 electric customers and 198,000 natural gas customers, mostly in rural Colorado.

When a customer calls in to request a reconnect, a company representative quotes the customer a reconnection price and schedules a reconnect order, sending a signal for the service to be turned back on, she said. That’s a half-hour at most for smart metered-customers.

Reconnecting gas is a far more involved process, West said.

A technician must connect with the tenant, get permission to enter the premises and relight the appliances.

As for the communication issue, West said her company makes direct phone calls in advance of the disconnection.

Xcel Energy does not have any compromise suggestions to what Kennedy is proposing, saying it is “working with the bill sponsors and other stakeholders to ensure the safety, reliability, and feasibility of these proposed requirements.”

Lindstrom added Xcel Energy always wants to hear from customers who struggle to pay their bills.

“We will work with them to set up payment plans and identify internal and external resources that meet their specific needs to ensure they continue to receive electric and natural gas service,” Lindstrom said. 

The company is always willing to connect customers with available energy assistance programs, Lindstrom said, adding that, in 2021, about 3% of customers, or roughly 53,000, received assistance from LEAP.

“Additionally, many income-qualified LEAP recipients are automatically enrolled in our electric and natural gas affordability programs which provide additional assistance to keep bills affordable. In 2021, we enrolled over 33,000 Colorado customers in these programs for a total of $13.5 million in discounts,” he said. 

Black Hills’ West added that her company's own program matches contributions dollar for dollar, and, in the last two years, the company has contributed almost $1 million each year to that fund. The company also does outreach to human services agencies as part of its communications efforts.

Kennedy's bill is scheduled for its first hearing in the House Energy and Environment Committee on Wednesday, Feb. 2.