ROUND 2 OF UTILITY RELIEF ON WAY FOR PAST-DUE BILLS
State funding aims to cut $200M in combined debts to SDG&E in half
If you’re one of many Californians who fell behind on your utility bills in the wake of the pandemic, a second round of financial relief is coming.
A section of the recently passed energy “trailer bills” that Gov. Gavin Newsom signed into law includes nearly $1.2 billion for the 2022 version of the California Arrearage Payment Plan, known as CAPP. The money will go to utilities and community choice aggregation programs across the state and will be applied to the accounts of residential customers who have racked up past-due bills.
Earlier this year, the state’s power companies reported to the California Public Utilities Commission that more than 3.6 million residential customers were 30 days or more behind on payments. The sharp rise corresponded with stay-at-home lockdown orders imposed in response to COVID-19 in the spring of 2020.
As of the end of February, the amount from past-due bills in the state came to about $1.64 billion.
In 2021, the first round of CAPP funding directed $1 billion from the American Rescue Plan Act to help offset some of those
overdue payments.
San Diego Gas & Electric estimates that as of July, about 356,000 residential customers were behind on payments and their combined debts came to nearly $200 million. The money from what has been dubbed CAPP 2.0 looks to reduce that dollar figure by about half.
The second round of funding went into effect in July, at the start of the current fiscal year. The money for CAPP 2.0 will come from the state’s general fund.
According to the details of the trailer bills — passed by the Legislature on June 29 and signed the next day by Newsom — utilities apply for CAPP 2.0 benefits through the Department of Community Services and Development by Oct. 30 and all the money in the fund will be fully disbursed by Jan. 31.
SDG&E customers behind on their bills don’t need to do anything to receive CAPP relief — the amount calculated for each residential account will be deducted automatically.
Allocations will be based on the relative size and number of customers in a particular utility’s service territory. Of the three big investor-owned utilities in California (SDG&E, Pacific Gas & Electric and Southern California Edison), SDG&E’s service territory is the smallest, and SDG&E officials estimate it will account for about 10 percent of the disbursements in CAPP 2.0.
CAPP funding will also apply to customers who are enrolled in the two new community choice aggregation programs in the San Diego area — San Diego Community Power (consisting of the cities of San Diego, Chula Vista, La Mesa, Encinitas and Imperial Beach) and Clean Energy Alliance (Carlsbad, Solana Beach and Del Mar).
“We’re appreciative of the governor taking into consideration the challenges that some of our customers are facing and this will be welcome relief to them,” said Barbara Boswell, CEO of Clean Energy Alliance.
San Diego Community Power enrolled its residential customers just this year so any arrearages that accrued prior to 2022 “isn’t debt that will impact our services,” said SDCP Chief Financial Officer Eric W. Washington. “We know that this increased relief through CAPP is well-timed.”
In the aftermath of the pandemic lockdowns, many Californians saw their monthly utility bills increase as they spent more time at home instead of driving to work and school. Unemployment rates also went up, leading some customers to miss paying all or some of their power bills.
The California Public Utilities Commission in the spring of 2020 said the state’s energy providers could not disconnect services due to nonpayment. But after being extended once, the moratorium ended last September.
Under the terms of CAPP 2.0, residential customers:
whose past-due bills accrued between March 2020 and December 2021 will not have their power shut off.
who receive CAPP 2.0 benefits will have any late fees and accrued interest waived.
who have a remaining balance after the 2022 CAPP benefit is applied to their account will be notified by the power provider of an option to take part in an extended payment plan, with late fees and penalties waived.
“We have not disconnected any residential customers for nonpayment since March 2020 and remain focused on providing assistance during this challenging economic period,” said SDG&E spokesman Anthony Wagner.
The financial effects of the pandemic plus a sharp rise in inflation have squeezed lower-income earners, who may not be aware of programs that can help them reduce their utility bills, such as California Alternate Rates for Energy, or CARE, and the Family Electric Rates Assistance, or FERA.
CARE is available to customers whose total household income is at or below specific income limits, such as $55,500 for a family of four. It can reduce electric bills by about one-third. FERA is open to customers whose household incomes slightly exceed those eligible for CARE.
CARE and FERA customers are also eligible for a debt forgiveness plan called the Arrearage Management Program, which provides customers an incentive to pay their bills promptly. After 12 on-time payments of the current month’s bills, up to $8,000 can be forgiven. Plus, as long as customers stay in the program, they’re protected from service disconnections.