Municipal utilities included in cutoff moratorium

Published 12:34 pm Saturday, November 28, 2020

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The City of Franklin is carefully watching its electric fund balance now that municipal utilities are prohibited from disconnecting power to residential customers for nonpayment of bills.

Per House Bill 5005, which Gov. Ralph Northam signed into law Nov. 18, the moratorium on disconnection for nonpayment extends “until the Governor determines that the economic and public health conditions have improved such that the prohibition does not need to be in place, or until at least 60 days after such declared state of emergency ends, whichever is sooner.” 

Further, all utilities must offer customers a repayment plan for past due accounts while the moratorium is in place — one with no eligibility requirement beyond attesting to financial hardship due directly or indirectly from the COVID-19 pandemic, and requires no new deposits, down payments or fees, nor the accruing of interest or penalties.

An exception to the cutoff moratorium occurs if a utility’s accounts receivable arrearages exceed 1% of the utility’s annual operating revenues.

City Manager Amanda Jarratt informed Franklin’s City Council on Nov. 23 that currently, the city’s electric fund balance is healthy, but there are several pending capital improvement needs to Franklin Power & Light’s infrastructure for which a good portion of that surplus is earmarked. Further, the city’s payments to Dominion Energy for the power it resells to city customers range from $700,000 to over $1 million.

“That bill is due whether customers are paying their bill or not,” Jarratt said.

The city expects to have more details on the impact of the cutoff moratorium on city finances at the council’s Dec. 14 meeting.