What States Can Learn from Illinois’ New COVID-19 Utility Assistance Agreement
A settlement last week extends the state’s moratorium on utility cuts and provides $ 47 million in funding for bill relief.
Illinois regulators on Thursday approved a sweeping COVID-19 utility aid deal that extends the state’s moratorium on utility shutdowns until at least the end of July and provides nearly $ 50 million to help customers pay overdue bills.
The agreement, approved by the Illinois Commerce Commission in a unanimous vote at a special town hall Thursday morning, is being touted by consumer advocates as a potential model for U.S. states as ‘They are relaxing the restrictions adopted in response to the COVID-19 pandemic.
More than 45 million people in the United States filed for unemployment during the pandemic, including more than 1.3 million in Illinois. Data shows that the pandemic has disproportionately affected minorities and people in low-paying jobs, who were already more likely to have difficulty paying for essential services like utilities, with nearly a third of U.S. households struggling to pay their energy bills as of 2018, according to the Energy Information Administration.
Rosazlia Grillier, a mother who lives in Chicago’s Englewood neighborhood, said the pandemic “has added to the nightmare people are already experiencing every day.”
“However, the bright side of [the pandemic] did that bring to the fore these things that we’ve tried to present from the start, ”said Grillier, who co-chairs an anti-poverty campaign with Community Organizing and Family Issues, a group that helped negotiate the accord and who advocates for low-income Illinois families.
As part of the deal, Illinois utilities will contribute about $ 47 million in combined funding to a new COVID-19 bill payment assistance program to provide relief to customers with unpaid charges.
The program will apply up to $ 500 to cover overdue payments for customers who qualify for the Home Energy Assistance Program for Low-Income People. Customers at or below 150% of the federal poverty line who are not eligible for LIHEAP due to their immigration status or other reasons will also be eligible for debt relief. A family of four with an annual income of $ 39,300 or less would be eligible for the program.
“This is something unprecedented for utility companies, which is one of the reasons we’re so excited about it,” said Emily Creahan, organizer of Community Organizing and Family Issues.
The federal coronavirus aid, relief and economic security law provided $ 900 million to help low-income households pay their utility bills, but advocates argued the amount will not be enough to ease the burden on those affected by the economic toll of the pandemic.
Illinois is one of the first states to finalize a utility stimulus package.
“The COVID-19 crisis has dramatically exacerbated many of the financial hardships that thousands of Chicagoans already face in their daily lives, forcing many to choose between paying for their utilities, food, or other essential costs, while doing so. facing the prospect of incurring crippling debt levels, ”Chicago Mayor Lori Lightfoot said in a statement. “I am proud to join the many public leaders and consumer advocates to create this back-up plan and lead nationally on how cities and states can work together to help uplift our communities during this unprecedented period. ”
Moratorium on closures
Illinois was among many declares that utility cuts and late payment charges are prohibited when the pandemic struck to ensure residents who shelter in place maintain access to electricity, gas and water in their homes.
Unsure of how long the moratorium will last, consumer advocates, the state attorney general’s office and the city of Chicago began negotiations with regulators and utilities in April to develop a plan to help residents as the state begins to reopen.
The deal finalized Thursday extends the moratorium on closures and late fees for up to 30 days after all areas of the state reach phase 4 of the JB Pritzker government’s reopening plan for reopening, or until September 1, whichever comes first.
Pritzker said this week that much of the state is on track to move to phase 4 June 26.
The agreement also calls on utilities to restore service to customers whose service has been disconnected for non-payment in the past year. Utilities should send a written notice within two weeks to customers whose service has been disconnected, providing information on how to configure a reconnection.
In addition, the reconnection fee must be waived for six months after the end of the moratorium period for LIHEAP-eligible customers and for all financially strapped customers, who only need to provide a verbal statement indicating that they encounter financial difficulties.
“It’s common sense,” said Grillier, who has struggled at times to pay her utility bills as she battles cancer and raises two daughters. “I am concerned about the people of this state, not just in my community. People through this state, they were already in difficult times. [The pandemic] added oil to this fire.
Illinois utilities have responded to the pandemic in different ways. ComEd has offered to restore electricity to customers whose service was disconnected for non-payment before March 13. Other utilities, including Ameren Illinois and Peoples Gas, have not publicly stated that they will reconnect service for customers whose service was disconnected before the pandemic.
A spokesperson for Ameren Illinois did not provide answers to questions about the number of reconnections, if any, made by the utility since mid-March, or the number of customers who have signed up for services. financial assistance plans since the start of the pandemic.
A spokesperson for Peoples Gas said the company had not interrupted service for any customers since November 2019.
Payment assistance, future improvements
In addition to debt cancellation, the agreement requires utilities to extend the time that customers have to pay late fees under deferred payment agreements, with periods of up to 24 months for clients who express financial difficulties and up to 18 months for other clients.
Under normal circumstances, customers with payment plans are not given more than 12 months to pay their bills.
The agreement also prohibits utilities from reporting non-payments or late payments by active customers to credit bureaus and rating agencies for six months after the moratorium ends.
By making it easier for cash-strapped customers to pay overdue bills through more generous payment plans, utilities expect to reduce the total amount of bad expenses, which by law are paid by customers.
“We can keep people engaged and connected, put them on the right payment plan, reduce some of their debt,” said David Kolata, executive director of Citizens Utility Board, a Chicago-based consumer advocacy group that has helped negotiate the deal. “And if we do it right, you can actually save money for [all] consumers. “
Like Kolata, other consumer advocates hope the deal will lead to more changes that will help low-income households.
“We see this as a first step in looking at and trying to improve the affordability of energy,” said Karen Lusson, a lawyer with the National Consumer Law Center who helped negotiate the deal on behalf of the community organization and family issues.
Lusson noted a recent report from the Illinois Department of Commerce and Economic Opportunities showing that even after receiving help through LIHEAP, Illinois’ poorest households were still spending a quarter of their monthly income on bills. of energy.
Under the new agreement, utilities are to ‘start a discussion’ with stakeholders within 45 days to make services more affordable for low-income customers, with an emphasis on setting discount rates. for customers in difficulty.
The agreement also requires utilities to file monthly reports with credit and collection data reported by zip code.
“This is important because this information will give the commission and stakeholders the opportunity to analyze what is happening in particular communities,” said Lusson. “And especially with communities of color and whether they are disproportionately affected.”