201 S. Anaheim Blvd.
Suite #1101
Anaheim, CA 92805
Tel: (714) 765-5173
www.anaheim.net
CITY COUNCIL AGENDA REPORT
City of Anaheim
PUBLIC UTILITIES DEPARTMENT
DATE: OCTOBER 25, 2022
FROM: PUBLIC UTILITIES DEPARTMENT
SUBJECT: ACCEPTANCE OF ADDITIONAL ELECTRIC BILL
REDUCTION FUNDS ADMINISTERED THROUGH THE STATE
OF CALIFORNIA FOR COVID-19 PANDEMIC RELIEF FOR
THE BENEFIT OF UTILITY CUSTOMERS TO REDUCE
ELECTRIC ARREARAGES
ATTACHMENT (Y/N): NO ITEM # 03
RECOMMENDATION:
That the City Council, by Motion:
1) Accept a second round of funding administered through the State of California, of approximately $1.7 million, related to the COVID-19 Pandemic Relief for Utility Customer Arrearages Payment Program (CAPP) 2.0 for eligible past due active residential electric accounts between March 4, 2020 through December 31, 2021, or as modified by the State; and,
2) Authorize and direct the Public Utilities General Manager, or designee, on behalf of the City to make necessary adjustments to recover all applicable funds that comply with program guidelines, to apply bill credits to qualifying customer accounts, and to execute any and all related documents, and take such actions as are necessary, required, or advisable to implement and administer the funds.
DISCUSSION:
At its meeting on September 28, 2022, the Public Utilities Board (PUB) recommended that City Council approve these actions.
As a not-for-profit agency, Anaheim Public Utilities (APU) is authorized by the City Charter to recover its costs to serve customers through utility rates. When past due accounts, or arrearages, from unpaid utility bills become uncollectible utility accounts, they are written off and passed onto the balance of ratepayers. However, APU offers an array of programs to utility customers to provide extensions, payment plans, and financial assistance in order to reduce the amount of uncollectible accounts.
Over the past two years, because of the impacts related to the COVID-19 pandemic, the State initially approved two programs to offset customer arrearages including electric, water, and wastewater services. Funding for the programs was approved by the Legislature in July 2021. The first program, CAPP, was approved through Assembly Bill (AB) 135, and provided bill assistance to energy utility customers. The second program approved through AB 148 was the California Water and Wastewater Arrearage Payment Acceptance of Additional Electric Bill Reduction Funds Administered through the State of California for COVID-19 Pandemic Relief for the Benefit of Utility Customers to Reduce Electric Arrearages October 25, 2022
Program that provided bill assistance to water and wastewater utility customers. A total of $6.2 million in funds were received as a result of these programs and applied to approximately 13,000 customer accounts that met the criteria of the programs. APU collaborated with industry partners on bill language that provided the broadest application of financial assistance to customers who struggled to pay their utility bills during the height of the pandemic.
This year, due to the prolonged impacts of the pandemic and customer arrearages that were not addressed beyond the initial covered period of March 4, 2020 through June 15, 2021, the Legislature approved funding for CAPP 2.0 in June 2022 that will provide additional bill assistance to residential energy utility customers by extending the qualifying period through December 31, 2021. As with the previous program, there is no application required by customers, as qualifying accounts will be adjusted in accordance with program parameters.
In order to qualify for additional funding through CAPP 2.0, the customer accounts must be active residential energy customers. The funds will be distributed in order of priority for unpaid usage from March 4, 2020 through December 31, 2021. The first priority is active residential customers with arrearages that put the customer at risk of disconnection. The second priority is active residential customers with arrearages that were accumulated during the relief period of March 4, 2020 through December 31, 2021 and are past due. Different from the previous energy CAPP program, customers who have an arrearage amount, but have since made a payment, will receive their arrearage fund as a credit toward a future balance as long as the account remains active. Consistent with the previous program, a 90-day moratorium on disconnections will go into effect once payment of funds has been remitted to a customer’s account.
The following is a summary of customer accounts that are eligible for CAPP 2.0 funding:
Category Number of Accounts Past Due Balance
Electric Accounts 4,604 $1,742,489
Since March 2020, APU has taken measures to temper the hardships endured by Anaheim customers due to the effects of the COVID-19 pandemic by adjusting the delinquency treatment process. Past due and disconnect notices for non-payment were suspended. APU provided modified notices with information on how customers could obtain financial assistance in order to manage their balances on their utility accounts.
Additionally, APU has suspended late fees since March 2020 and has paused transferring past due accounts to the third party collection service.
Throughout the pandemic, APU administered programs that assisted customers in financial distress. Financial assistance totaled over $14 million from a variety of sources.
While the pandemic caused reduced utility revenues from nonpayment of bills, APU made corresponding reductions to its operating expenses (such as temporarily decreasing rebate and efficiency programs) and deferring non-critical capital investments to help utility customers during this unprecedented time.
Acceptance of Additional Electric Bill Reduction Funds Administered through the State of California for COVID-19 Pandemic Relief for the Benefit of Utility Customers to Reduce Electric Arrearages October 25, 2022
Continuing Efforts to Assist Utility Customers
Understanding that some customers may have continuing financial hardships beyond what the State programs provide, APU has undertaken a comprehensive plan to offer payment options and provide access to assistance programs. The first effort has been to ensure that utility rates and fees are affordable. APU constantly reviews its internal processes for efficiencies that result in lower costs for customers, while remaining in compliance with legislative and regulatory requirements. Other measures are outlined as follows:
State Arrearage Funding: APU has applied $6.2 million to approximately 13,000 accounts that meet the criteria established for electric, water, and wastewater past due amounts.
Residential Bill Credit: APU applied bill credits totaling $2.7 million to all residential customers during the pandemic.
Utility Emergency Assistance: APU provided one-time emergency financial assistance of up to $350 on the electric and water portions of utility bills for customers who were struggling to pay their bills as a result of the pandemic. Over the course of the pandemic, 14,496 customers were provided over $2.2 million in emergency bill assistance under the program.
Small Business Emergency Assistance: APU provided over $370,000 in bill assistance to 375 small business customers who demonstrated they were financially impacted by the pandemic. Examples of hardship included loss of revenue, reduction of hours or closing of their businesses due to stay-at-home orders, and a reduction in labor.
Federal Financial Assistance: APU allocates federally-funded Low Income Home Energy Assistance Program (LIHEAP) on behalf of the State. Income qualified customers are able to apply through the Community Action Partnership of Orange County (CAPOC) to receive a pledge of financial assistance to help offset energy costs. Payments are directly applied to the customer’s account. APU has applied over $1.6 million towards 3,580 customer accounts during the pandemic. As part of the federal Emergency Rental Assistance Program (ERAP) administered by the City’s Housing and Community Development Department, to date over $960,000 has been provided to over a 1,000 customers to assist with their utility bills. Additionally, a new federal program was established to help with income qualified water customers.
As of June 2022, the Low Income Household Water Assistance Program (LIHWAP) has been launched, and once payments have been received, APU will provide information on eligible customers and the amount of assistance provided. Income Qualified Discounts: For income qualified seniors, disabled, and military veteran customers, APU offers a 10% discount on the electric and water portion of their bill. To date, 8,078 customers receive this discount. APU also offers a Green Power discount to income qualified customers who typically are unable to place solar on their residences. There were 2,461 customers who participated in the discount program in FY20 and FY21.
Acceptance of Additional Electric Bill Reduction Funds Administered through the State of California for COVID-19 Pandemic Relief for the Benefit of Utility Customers to Reduce Electric Arrearages October 25, 2022
Medical Lifeline Allowance: For customers who have medical conditions that require medical equipment or additional air conditioning, APU provides a Medical Lifeline Allowance that provides additional energy at the lowest rate, once customers provide the necessary doctor’s verification. To date, 2,219 customers receive this allowance.
Monthly Billing and Payment Plans: APU offers customers the option to receive a monthly bill instead of a bi-monthly bill. The monthly bill option makes utility bills more affordable for customers by allowing them to make smaller, more manageable payments. To date, there are 2,198 customers enrolled in monthly billing.
Additionally, monthly payment plans are available to help customers make payments to avoid carrying large balances. In the prior fiscal year, 4,070 customers were assisted through monthly payment plans.
Charitable Organizations: APU partners with charitable organizations, including Salvation Army, Catholic Charities, and Share Our Selves (SOS), to apply donations towards utility bills for qualified customers. APU stops all collection activity on the pledged-portion of the customer’s utility bill and offers payment extensions to allow customers additional time to pay any remaining portion of their bill. In the prior fiscal year, charitable organizations made 543 pledges totaling more than $42,000. Energy and Water Efficiency Programs: APU provided over 1,198 Home Utility Check-Ups and 986 weatherization service visits at no cost to help customers lower their energy and water consumption in the prior fiscal year. Customers received LED light bulbs, low-flow aerators, and shower heads to immediately lower their usage in the Home Utility Check-Up program. Weatherization services include weather stripping, caulking, air conditioning tune-ups, smart thermostats, and other measures in partnership with the Gas Company. Other money-saving programs include rebates for efficient appliances, refrigerator recycling, turf removal, and shade trees.
These collective efforts are designed to provide lower utility bills and fees, as well as financial assistance to help customers when needed. APU will continue to offer programs that give customers the time and flexibility they need to make payments.
IMPACT ON BUDGET:
Availability of funding for arrearages is subject to State allocations and will be applied directly to qualifying customer accounts.
Respectfully submitted,
Dukku Lee
Public Utilities General Manager