Testimony from Operation Fuel Policy & Public Affairs Associate, Mike Turaj – March 14, 2024

Operation Fuel appreciates the opportunity to provide testimony on H.B. 5441, An Act Concerning Utility Shutoffs for Certain Customers. We are grateful for the committee’s leadership working with advocates to determine a more effective approach to manage utility debt in our state. However, H.B. 5441 as currently written would roll back significant protections for some of our most medically fragile and lowest-income ratepayers, including Operation Fuel clients. Operation Fuel understands that language in the bill is undergoing and looks forward to collaboration to best ensure ratepayers are protected in Connecticut.

Service termination is an extreme collections strategy that can have damaging impacts on vulnerable ratepayers’ health, social, and economic well-being. It is also expensive for ratepayers to compensate utility companies for service terminations and restorations. In our testimony, we will discuss the impact of shutoffs on residents before the legislature enacted medical and financial protection statutes in the mid-1990s. While necessary, these laws were not enough to prevent a massive increase in shutoffs in the mid-2010s. In 2019, Chair Marissa Gillett joined the Public Utilities Regulatory Authority (PURA) and initiated an 11-part Grid Modernization docket, focusing the first reopen on energy affordability. Recommendations from PURA’s stakeholder sprint process in Track 3 are still applicable today.

Led by this committee, the legislature passed the Take Back Our Grid Act in 2020, followed up with “SB 7,” considered the sequel of the Take Back Our Grid Act. We are grateful for the committee’s leadership and encourage you to continue advancing legislation that is in the best interest of consumers. Operation Fuel is an active stakeholder in energy affordability issues in our state, in the advocacy, legislative, and regulatory spaces. We appreciate the essential back and forth between lawmakers and regulators to ensure Connecticut ratepayers get the best possible outcomes for grid reliability and affordability. We supported both TBOG bills and are grateful to the committee for our regular interaction on these matters.

Operation Fuel is submitting testimony to express concerns with HB 5441 as currently written. We believe that the intent of the legislation is to reduce arrearages that get socialized to all ratepayers. This goal is important, and our testimony will offer suggestions on how to better manage this growing challenge. However, we also ask the committee to ensure that any new law passed by this body, does not further expose our state’s sickest and poorest residents to more energy insecurity than they already experience.

In Section 1, lines 188-196- H.B. 5441 allows “an electric distribution or gas company, electric supplier or municipal utility furnishing electricity or gas to terminate, deny or refuse to reinstate residential electric or gas service for nonpayment to an customer who is ill, has a household member who is ill, has a life threatening situation, or has a household member who has a life-threatening situation, unless such company is prohibited from terminating, denying or refusing to reinstate such service.”1 The bill also makes technical language provisions that would roll back protections the Connecticut General Assembly passed for customers with serious illness and life-threatening situations.

We recommend that the committee rely on data, provided by the Office of Consumer Counsel, our state’s ratepayer advocate, who represents the ratepayers in PURA proceedings. We also refer the committee to PURA itself, to understand how arrearages have changed before and during the COVID-era investigations. Operation Fuel notes that while COVID sparked an urgency and intentionality toward addressing widespread shutoffs, that low-and moderate-income ratepayers were struggling to access protections and affordable payment plans before we knew anything about the pandemic. Data provided by utilities during PURA’s Medical Protection sprint in 20202 indicates that for both UI and Eversource, nearly 90% of medically protected customers had a life-threatening situation, according to their physicians. While the companies may pursue reasonable payment plans with these clients, they may not use shutoffs as a threat.

Testimony submitted by Eversource and UI4 criticizes the statutory protections currently in place for CT ratepayers who are in a “life-threatening situation” – in many cases, the customer may be on their deathbed. While current law allows the companies to pursue payment plans with these ratepayers and are within their rights as creditors to seek payment from ill customers. They just can’t shut off their service. Both Eversource and UI still suggest those who are medically protected still make payments. In UI’s medical protection fact sheets, the company states, “Customers still must attempt to pay their bill or enter into a payment arrangement with the utility.”5 Similarly, Eversource states, “You must continue to pay current bills and arrange for payment of past-due amounts while service is continued.”6

Operation Fuel advocates for the companies to take a “customer service” approach, potentially assigning a special unit of customer service representatives to focus on the best approach to help groups of ratepayers with specific challenges. We see too often that instead, companies pursue a punitive collections strategy. We are grateful to OCC and PURA for their leadership in rolling back extensive wage garnishment practices that both companies pursued during the pandemic.

Operation Fuel believes that doctors, not utilities (or even lawmakers) are best suited to determine health precautions for residents. Obtaining medical hardship protection differs between serious illness and life-threatening situations. Yet, both have to be cleared by a practicing physician, a skilled individual who has a medical degree. If a physician indicates that a patient has life-threatening conditions it states, “My patient has a medical condition and not having gas or electric service will endanger the life of my patient. The households is protected from a service shutoff for nonpayment year round.” The physician answers more questions around life-threatening situations, that includes length of illness. Medical protection is a health issue, not a collections issue. All claims of medical protection must be resubmitted each year. If the companies want to contest a medical certification of serious illness, they have the right to make a case before the Public Utilities Regulatory Authority. H.B. 5441 does not address how to pursue payment plans with clients who are medically fragile, but financially capable of paying down debt.

Operation Fuel is also concerned about how soon this bill (if passed) will take effect. July 1, 2024, is an accelerated time frame and contradicts what the companies are in the process of doing. Companies are informing customers about the end of the COVID-19 shutoff moratorium and how they could be eligible for shutoff. Documents provided to customers detail several programs they can utilize, medical protection being one. Preparing these documents, along with review from stakeholders took a long process. Will conflicting messages confuse customers who are vulnerable to shutoff and experiencing high arrearages? After robust discussion in PURA Docket No. 14-07-19RE06, the Companies were ordered by PURA to redesign residential bills and website information. This process took over a year, and millions of dollars to implement. How will companies contact customers? How will communication tools be redesigned? Communication is a key factor in enrolling customers in hardship protections and letting them know about certain programs- yet the language changes made in H.B. 5441 do not address this.

Operation Fuel hears every day the agonizing choices that Connecticut residents are forced to make between paying for utilities, food, medicine or other essentials. If this legislation were to be adopted, Operation Fuel is concerned about scenarios where Connecticut families, could face a fatal situation:

For example, a child who is on medical equipment that requires power. If one parent were to lose their job, it would lower the income level for the family, potentially putting them at risk of falling behind on their utility bill. Without direct communication from the company about different programs they can utilize, this could lead to a shutoff and put the child in a fatal situation. Medical protections established in Connecticut help to prevent possible situations.

Medical protections were established in Connecticut after Connecticut Light & Power Co. (today, a subsidiary of Eversource Energy) shut off electricity in the home of a Hartford man, proving to be a near fatal incident in 19957. The company turned off life-support and ventilation equipment the resident needed to live. When the residents mother came home, she found her son, Artemus, 28, “gasping and blue.” There are many customers like this family, who are behind on bills because of medical and other household costs. It is discouraging that in the 29 years since this near fatal situation, the proposed way to collect on arrearages is to use predatory collection practices on medical fragile customers proposed in H.B. 5441.

While the legislature acted quickly in response to the health crisis caused by shutoffs, the issue got worse over time as the utilities continued to expand the use of service termination as a collections tool. In a four-year time span, the utility companies doubled the number of shutoffs per year, from roughly 40 thousand in 2014 to over –80 thousand in 2018. 8 This, combined with the lack of proper communication to residents led PURA to investigate shutoff protections (see also Kovner, Nov 2019)9. “The regulatory authority said it would investigate ‘the number of uncollectible accounts, collection efforts, payment arrangements, and policies concerning termination of services.’” Operation Fuel engaged in this process, concerned about the mass amount of people who rely on medical equipment were impacted by this. For example, those who require infusion pumps, ventilators, home dialysis equipment, storing insulin.

Through the proceedings, PURA tracked data regarding medically protected residents in  Docket No. 17-12-03RE01- Track 2 report. “Approximately 2% of Eversource’s’ residential customers and 2.4% of UI’s residential customers receive medical hardship protection.” For UI: 7,352 have medical hardship protections- 89% (6,458 customers) are designated as life-threatening. For Eversource: 22,515 have medical hardship protections- 88% (19,852) designated as life-threatening. These numbers are 2019 alone, Operation Fuel is concerned about the current number, given the affordability gap in Connecticut.10

UI: 2019 Data
• 51 of 7,352 customers were coded medical hardship entered into a payment arrangement.
• 977 UI customers made between 1-2 payments.
• 976 UI customers made between 3-5 payments.
• 1,491 UI customers made between 6-11 payments.
• 804 UI customers made all twelve payments.
Equating to 4,248 of the total 7,352 customers making payments. 42% of customers made no payments in 2019. UI recovered $11,046,807 in uncollectible through the SBC in 2019, which resulted in average annual cost of $32.62 for each UI customer or approximately $2.72 per customer per month.

Eversource: 2019 Data
• 2,112 of the 22,515 customers were coded medical hardship entered into a payment arrangement.
• 3,929 customers made at least one payment.
• 3,083 made at least three payments.
• 2,070 made at least six payments.
• 354 customers made all twelve payments for the year.
Equating to 10,156 customers with a medical hardship designation making payments and 12,359 not making any payments. Eversource recovered $17,011,873 in medical hardship uncollectible, resulting in an annual cost of $14.30 per customer, or approximately $1.19 per customer per month.

PURA’s appointed prosecutorial team (PRO) recommended a five-pronged approach that would address challenges in medical hardship cases.
1. Ensure customers who are also eligible for financial hardship protections are coded as such and take advantage of energy assistance offerings, rather than solely receiving medical hardship protection.
2. Ensure all medical protection customers enroll and participate in a payment arrangement.
3. Streamline the EDC’s medical web portals and use consistent language and make it easier for physicians to use and understand.
4. Ensure the EDCs focus and maximize their collection efforts using currently available data.
5. Have DSS modify the Connecticut Energy Assistance Program (CEAP) to provide heating assistance benefits to medical hardship customers.

Operation Fuel would be happy to collaborate to ensure companies are taking a more effective and humane approach that focuses on a customer centered process. Rather than a collections perspective; utilities can approach customers from a customer service perspective, which can be more effective than expanding shutoff practices that we saw from 2014-18. We do not want to go back to those days. Companies should develop strategies to work with these specific groups of customers such as those in life threatening situations to better recoup arrearages. Current law prevents shutoff, not collecting on debt. We are mindful that testimony so far indicates OCC, AARP, CCAG, CT Legal Services, Center for Children’s Advocacy, and others have concerns and believe this bill and will harm clients.

Thank you for the opportunity to submit written testimony. For your leadership in helping build strong consumer protections in Connecticut. For your collaboration in making sure the most vulnerable residents of the state are not harmed.