Were Texans informed about the COVID-19 Electricity Relief Program?

(September 23, 2020)

The COVID-19 Electricity Relief Program was designed to help low-income Texans avoid utility cutoffs during the pandemic and will end October 1. Critics say it has failed to achieve its goal of helping consumers because not enough was done to make them aware of its existence.

Less than 4 percent of the 3 million Texans who claimed unemployment benefits since the beginning of the pandemic enrolled in the program. Critics argue this relatively low level of uptake was because retail electricity providers (REPs) were not obliged to inform customers about the support program. even if they were transferring a customer to a deferred payment plan.

The Texas Legal Service Center, a nonprofit that provides pro bono services to low-income clients, requested that the PUC and Texas Workforce Commission cooperate to inform unemployed residents about the assistance. However, the Workforce Commission refused, arguing that the support was not specifically aimed at unemployed people.

“It’s failing miserably and people are being saddled with debt,” said consumer lawyer Randall Chapman. “Electricity consumers have to know the secret handshake to enroll.”

A further concern was the various bureaucratic hurdles consumers needed to complete in order to enroll in the relief program. One requirement that caused issues for many was the need to prove they had lost their job.

However, the unemployment system ground to a standstill during the pandemic due to unprecedented demand. As a result, advocates say customers had difficulty presenting the required documentation. This requirement also excluded many workers who are self-employed or casual laborers.

Customers who successfully enrolled received assistance of 8 cents per kilowatt hour of energy, which equates to about 60 percent of an average utility bill. The support was paid for by a small fee of between 40 and 60 cents on all customers’ utility bills.

The PUC argued that restricting access to assistance was necessary. “Because the cost of these temporary measures will ultimately be borne by rate payers (including customers with suspended disconnects whose final balances are not totally offset by the COVID-19 surcharge on actively paying customers), they should be reserved for those in dire circumstances,” wrote the Commission.

Critics of the program say it has only delayed a massive wave of cutoffs. Moreover, they claim the economic and financial impact of the coronavirus pandemic remains severe despite looming expiration of the relief program.

As of October 1, utilities will be able to shut off service to customers who miss payments by giving 10 days of notice. Consumer advocates believe many customers will struggle to cope with payments, especially because their debts continued to accumulate during the moratorium on cutoffs.

“I think it’s important for all these agencies to recognize that as much as we want this pandemic to be gone, as sick as we all are of it, it’s not gone,” explained Sandy Rollins of the Texas Tenants Union. “It’s still here, and people are still suffering, both physically and financially.”

The relief program has assisted nearly 595,000 households with around $30 million in bill payments. Spokespeople for the PUC and various REPs argue it has fulfilled its purpose and should now expire.

Providers believe that the program was necessary to prevent a wave of bankruptcies among REPs due to a decline in revenue from bill payments. When the relief program was launched, they stressed that the moratorium on cutoffs should be kept short.

“The threat of losing service is one of the most powerful tools a retailer has to ensure payment,” argued ATG Clean Energy in a filing to the PUC. “The market has not built in safeguards to withstand long periods of moratoriums or non-payment … Covid-19 poses a major risk to the most basic fabric of the market.”

The PUC agreed that the competitive market was under threat, which was why it provided the funding directly to the REPs rather than to customers. When the relief program was launched, PUC chairman DeAnne Walker explained why she favored providing the REPs with the assistance.

“I just feel like under the current circumstances that we’re in, where so many people are losing their jobs, if we had a moratorium on disconnects for the next three or four months, the market could not withstand that because they wouldn’t be having any money coming in,” Walker stated.

But the decision to hand the aid directly to REPs rather than financially strapped consumers also had its critics. One consumer advocate labelled the PUC’s program an “industry bailout.”

Jordan Smith is a freelance journalist and translator covering issues related to energy, the environment, and politics. His work has appeared on the independent news site Opposing Views and at the Canadian Labour Institute.

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