Major Minnesota utilities can't disconnect customers during the pandemic — but local ones can
ST. PAUL — Carla McElmury was already struggling to pay for her utilities when she lost her job.
Having taken time off in late 2019 to heal from an operation to remove excess skin, the result of an earlier gastric bypass surgery, she was no longer able to afford her gas bill. When the Good Earth Village retreat center in Spring Valley, where she returned to work as a housekeeper in January, laid her off because of the coronavirus pandemic, she fell behind on her water and electricity bills, too.
By July, she owed the city of Spring Valley roughly $1,500.
The city had publicly pledged to not shut off late-paying customers' power in light of the pandemic's economic toll. Yet McElmury received a disconnection notice in the mail anyway.
"It's not just me either. I know quite a few people who got the same notices I did," she said in a phone interview.
Ultimately, the city did not turn McElmury's lights off, nor will it turn off anybody else's, Spring Valley Utilities office manager Kristen Beck said. But it will continue mailing disconnection notices.
Other municipal utilities have been less lenient. While state regulators are requiring large investor-owned utilities like Xcel Energy and Minnesota Power to not disconnect their customers during the pandemic, local ones have only been asked not to on a voluntary basis.
It is difficult to say how many households in Minnesota have had their power or gas shut off due to non-payment since the pandemic began. Unlike their larger counterparts, Minnesota's municipal utilities and utility co-operatives — which serve an estimated 994,000 residential customers in the state, according to the Minnesota Municipal Utility Association — are not regulated by the state Public Utilities Commission and thus have fewer centralized reporting requirements.
More than 130 municipal utilities and co-operatives, however, did respond to a March request from the PUC to not disconnect late-paying customers, offer payment plans to qualifying customers and cease charging late fees during the pandemic, according to PUC filings. Later in June, the PUC made it mandatory for investor-owned utilities to maintain those protections for as long Minnesota's ongoing peacetime emergency declaration is in effect.
Roughly half of the 130 respondents said they would continue the protections for the length of the peacetime emergency as well. But at least a dozen of them signaled in their filings that they would extend them only until specific dates.
Nearly a third, meanwhile, did not specifically say in their filings how long they would extend the protections. Many of the filings used boilerplate language, some of which contained no mention of dates or timetables.
Thirty miles northwest of Minneapolis in the city of Elk River, the municipal utility recently and briefly disconnected service to several of its customers, though city interim utility manager Theresa Slominski could not immediately say how many. All were in arrears before the peacetime emergency was declared, she said, and did not respond to repeated attempts at contact.
She said the city would not disconnect a customer facing financial difficulties related to the pandemic.
" We would not be impacting anybody who is struggling under those circumstances. We have people who have not paid us since the winter," Slominski said.
Other local-level utility officials interviewed for this story said much the same thing. Service disconnections, they say, are a last-resort option for uncommunicative customers with long-outstanding balances who, in some cases, did not even sign up for repayment plans.
Disconnections themselves are often brief, they say, and serve mostly as a way to get uncooperative customers to pay at least some of what they owe. In the south-central city of Windom, whose municipal utility ended consumer protections in June, city administrator Steve Nasby said there's " a long process before we would ever get to disconnect."
"And that's essentially if the customer makes no effort. That’s the worst-case scenario," he said.
But regardless of whether an individual's financial problems stem from the pandemic, said Annie Levenson-Falk, executive director of the advocacy non-profit Citizens Utility Board of Minnesota , the state is still under an emergency declaration. Citizens are still being encouraged to stay at home as much as possible, she said, and to practice social distancing when venturing outside.
Some Minnesotans may not have returned to the workplace, she added, for fear of being exposed to COVID-19 or in order to care for family.
"So that means people need to be able to eat at home and have running water...it's still even more important than under normal circumstances that people have utility service," she said.
The impending loss of the extra $600 in federal unemployment benefits, meanwhile, threatens to further pressure bill payers. The program furnishing the extra $600 ends this week, and Congress has yet to agree on whether to replace or reduce it.
The Congressional squabble continues amid a dismal job outlook for Minnesota. Though the state's seasonally adjusted unemployment rate fell to 8.6% in June from a record 9.9% in May, it was still double that of what was observed in the months leading up to March.
Municipalities and utility co-operatives, which only charge enough to break even, could themselves struggle to purchase power if enough of their customers can't afford to pay their bills. In southeast Minnesota, where the city of Caledonia has resumed the ability to disconnect customers, city administrator Adam Swann said the predicament has no easy answers.
"I t’s safe to say that we think the extra $600 has helped keep the utility accounts current. We do anticipate that as unemployment benefits run out, both at the state and federal level, that we are likely to see delinquent accounts increase," he said.