The Covid shock to the economy is over. In March the unemployment rate in King County was back to a labor-short 2.7 percent. However, there remain some large piles of unpaid obligations. One institution that has been open about the economic “long Covid” effect is Seattle City Light.
Last August, the Seattle Times reported that City Light customers were behind on their power bills to the tune of $48.9 million, an amount that had tripled during the pandemic. The debt has come down since last summer, but most of it is still there.
By February 2023, 43,890 residential accounts, 10.4 percent of the total, and 3,385 commercial accounts, 6.7 percent of the total, were at least 60 days past due. The amounts owed totaled $37.8 million.
Compared with the figure of nine months ago, that’s progress. However, it has come with special help, much of which may not be repeated. In December, the city received $9.76 million in federal Covid money to help low-income customers on their electric heat and water bills. Since the beginning of 2022, City Light has also provided $1.15 million in emergency assistance to households below 80 percent of the state median income. Before Covid, this aid was limited to $500 a year, or $1,000 if there was a child under 18. In Covid time, the limit was raised to $1,000 whether there was a child or not. That limit is still in effect.
City Light also offers a 60 percent discount on electric bills to households with gross income below 70 percent of the state median. Under the eligibility requirements, for example, a two-person household qualifies for the discount if its income is less than $54,000 a year. Participation in City Light’s Utility Discount Program peaked at 43,500 accounts in May 2021 and is down to around 36,000. That’s still above the pre-Covid average of around 31,000 accounts.
“We don’t want to disconnect anyone’s service,” says City Light spokeswoman Jenn Strang. “That’s why we continue to urge customers behind on their utility bills to contact us to learn more about bill assistance and payment plans to avoid disconnection first.”
The customer does have to ask, and some low-income people haven’t. Still, the effect of City Light’s programs is that most of the remaining overdue debt on residential accounts are owed by middle- and upper-income households.
“The bulk of our delinquencies are not a low-income problem,” says Marcus Jackson, City Light’s director of customer operations. Some customers pay their bills, he says, only when City Light threatens to cut off service, or actually does cut it off.
For nearly six years, the utility didn’t do that. In 2016, City Light and Seattle Public Utilities put in a new billing, customer service, and back-office computer system that took far more time and money than had been planned. It suspended disconnects in March 2017. By 2020, when Covid hit, it still hadn’t resumed disconnects. For household accounts, disconnects were not restarted until last October.
Digging out of this financial hole has started slowly. By March, City Light was disconnecting 30 to 35 customers a day, and had totaled 821 disconnects in five months. Unlike the pre-2017 time, most households have meters that allow City Light to disconnect service remotely. Most commercial accounts don’t, which has made action on those accounts slower.
Currently, about 5,000 residential accounts and 900 commercial accounts are marked for possible disconnection. Clearly the pace of disconnections will have to be speeded up if the money is ever to be collected. The alternative would be a political decision to write it off, which might not sit well with voters who had paid their bills.
Historically, City Light would threaten to pull the plug if an account was $300 past due. The bulk of the debt now is between $500 and $1,000 — and the cut-offs have started with the accounts owing more than $1,000. “When you have so many delinquent customers,” says Jackson, “you start high and work down.”
The current practice is that customers owing $1,000 or more are mailed an urgent notice warning of disconnection. If they don’t respond, they are mailed a final shutoff notice. With no response, the power is cut. Almost always, that gets an immediate response. Some people pay only when they must.
Jackson says City Light’s aim is to get the threshold back to $300. That’s in the city’s interest, and also, he says, it’s a demand easier for people to deal with. “Customers blame us for letting it go so long,” he says.
As a small landlord, I’m finding this very interesting in relation to the recent late fee legislation that council eagerly passed. From what I can tell SCL charges $10 as a late fee (https://www.seattle.gov/light/accounts/docs/backofbill.pdf) and yet the article states “the effect of City Light’s programs is that most of the remaining overdue debt on residential accounts are owed by middle- and upper-income households.” I wish city council and central staff would do reasonable due diligence before passing new laws for small landlords. This would have been good reference for their deliberation.
You are expecting an awful lot from a horrible lot. Research what the City is charging in late fees? P-shaw! Diligently looking at short a period it is before the City cuts off utilities, and yet requiring small landlords to provide services for many, many months before those landlords can take action against non-payers? If the Council majority, and their staffs, can’t find it in some report out of UC Berkeley, they are simply incapable of knowing how to look up anything else!