Pennacchio & Oroho Warn BPU of Growing Utility Bill Crisis

Under a moratorium on late fees and service disconnects mandated by Governor Murphy, more than a half million residential customers have fallen behind on their utility bills and the number is growing every day.

Senator Joe Pennacchio and Senator Steven Oroho today, in a letter to Board of Public Utilities President Joseph Fiordaliso, urged BPU to take pre-emptive measures to address a potentially dire problem.

“There is more than $354 million owed. It’s essential that we have a workable plan in place,” said Pennacchio (R-26). “If residents are struggling to pay their monthly utility bills now, how will they be able to pay for a whole year in one chunk. If these payments aren’t made, it will fall on the backs of ratepayers, and we don’t want them stuck holding the bill. We need to come up with a plan now.

“BPU must play a role in establishing policies for repayment and creating payment plan options for ratepayers,” Pennacchio continued.

The Senators’ letter asked the Board to hear from public utilities and ratepayer advocate groups to learn their intentions once the pandemic and moratorium are over.

“When it’s finally time to settle up, to pay for energy they have already used, it is going to be a shock,” said Oroho (R-24). “BPU should start the discussions now and come to the Legislature with ideas if necessary. It makes sense to limit a moratorium to homeowners, tenants and businesses who have been financially impacted as a result this pandemic. The law of unintended consequences is always lurking and I hope we can avoid situations whereby someone had the ability to pay but took advantage of a moratorium and now finds themselves in financial distress because they now have to settle their bill.”

The Senators also urged BPU to pay special attention to the disabled, unemployed and the elderly when they are formulating a plan.

The full text of the letter is below:

November 19, 2020

Dear President Fiordaliso,

It is our understanding that as of three months ago, there were well more than a half million residential utility customers with unpaid balances, and as we begin contending with COVID’s second wave, that number can be expected to increase significantly.

As of August, there was more than $354 million in outstanding residential balances due to the utility companies, and there is no telling how much higher the total will climb between now and March 15 when the moratorium on utility shutoffs mandated by Governor Murphy’s Executive Order No. 190 expires.

This situation is a ticking time bomb for many thousands of residents who are suffering the impacts of the pandemic and sinking further in debt with every passing month.

As a state, we face the very real prospects of another financial crisis occurring on the heels of – if not in the middle of – the pandemic. The utility bill emergency is escalating inconspicuously as residents who can’t pay their utility bills are shielded from the consequences of late fees and service interruption while their arrearages grow to higher and higher levels.

We write to urge the BPU to take pre-emptive steps to address a potentially dire problem.

If residents find it difficult to pay their utility bills now on a monthly basis, the obvious question is how will they ever be able to pay all the cumulative unpaid costs.

As members of the Senate Economic Growth Committee, we respectfully request a written explanation of the Board’s plans to manage this impending calamity as the intermediary between ratepayers and the public utilities that require payment.

We would ask the BPU to have the various public utilities and ratepayer advocate groups come before the Board and testify as to their intentions once this pandemic is over. It is our hope that the BPU could offer legislative guidance if necessary.

None of us can afford to wait for this situation to resolve itself without carefully crafted governance and oversight.

In respect of BPU’s leadership and vision, we want to hear your plan for how people who owe money will be treated. One of our concerns is how ratepayers such as the elderly, disabled and unemployed are treated with respect to paying back their utility obligations.

Ultimately, the Senate may have no option but to act on legislation to change laws and regulations, but until then, we look forward to hearing the Board’s concerns and solutions.

We thank you for your time, and welcome your response.

Sincerely,

Senator Joe Pennacchio
Legislative District 26

Senator Steven Oroho
Legislative District 24