Arizona utility regulators grapple with new standards for service shutoffs

Arizonans who cannot pay their gas and electric bills would be uniformly protected from having service cut off during periods of extreme heat or cold, under proposed new state standards.

But exactly how a utility determines when the shutoff ban would kick in and other details — such as whether utilities should be required to visit customers subject to shutoff in-person — are still the subject of wide disagreement.

The new rules, which would replace an emergency shutoff moratorium adopted in the summer of 2019, will be considered by the Arizona Corporation Commission at its open meeting next week.

The rules would bar Tucson Electric Power Co., Arizona Public Service Co. and other state-regulated electric utilities from shutting off a customer’s service for non-payment during periods of extreme heat or cold and prohibit natural-gas providers from disconnecting customers during freezing temperatures.

But the Corporation Commission must still decide among several possible benchmarks that would trigger a shutoff ban.

After a series of workshops on the subject, the commission’s utilities staff proposed allowing the companies to choose one of several methods to determine when service disconnections for non-payment would be suspended:

• When temperatures top 100 degrees or don’t exceed 32 degrees
• When the National Weather Service issues an extreme-heat or winter-weather advisory
• If the commission determines weather conditions are “especially dangerous to health”
• From June 1 through October 15 each year — the current guideline in the 2019 emergency rules.

The proposed rules also suspend late fees for delinquent customers during shutoff bans and prescribe various requirements to notify customers before they are disconnected, along with various utility reporting requirements.

ADVISORIES VS. TEMPERATURES

Utility shutoff policies became a public health issue at the commission amid news of the heat-related 2018 death of a Sun City West resident after Arizona Public Service Co. disconnected her for non-payment.

The recent rulemaking comes after the Corporation Commission ordered a summer moratorium on electric service shutoffs in June 2019.

Last year, TEP and other utilities voluntarily extended the June 1-Oct. 15 moratorium to the end of December to help customers cope with the financial impact of the COVID-19 pandemic, and in December the Corporation Commission required utilities to put delinquent customers on payment plans.

TEP and sister rural utility UniSource Electric Services filed comments supporting the use of National Weather Service advisories, which they had been using before the emergency rules were adopted in 2019.

“They’re obviously well-versed in watching the weather and trying to determine if there are public health and safety issues, so we feel it makes sense to follow their direction and heed the agency’s advice,” TEP and UES spokesman Joe Barrios said of the National Weather Service.

Barrios said TEP, which after a notification period resumed some service shutoffs for non-payment in March, supports a single benchmark using NWS advisories as its guideline to set a uniform state standard.

APS said in comments to the Corporation Commission that it shares TEP’s position on the rules, pointing out that a temperature-based shutoff standard could result in multiple required customer notifications within days as the temperatures fluctuate around the 100-degree mark.

The Phoenix-based utility also objected to a proposed requirement to put delinquent customers on four-month payment plans and requiring suspension of late fees, calling it unnecessarily burdensome to both the utility and the customer.

UTILITY CHOICE OPPOSED

Meanwhile, consumer advocates vehemently oppose allowing the utilities to choose their method of determining what would trigger a shutoff moratorium.

The Residential Utility Consumer Office, a state agency charged with representing the interests of residential ratepayers, contended in a filing that allowing the utilities to choose amounts to a significant and improper delegation of state authority to the companies.

Wildfire, a statewide nonprofit that advocates for low-income residents, and the Arizona Public Interest Research Group Education Fund, said in a joint filing they favor using the National Weather Service advisories as a guideline, noting that TEP, UNS and APS had been using that method for years before the emergency rule was adopted in 2019.

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The policy will help customers avoid piling up significant debt because of an extended moratorium, the consumer groups said.

“Coupled with information about available assistance programs, discount programs and other available resources, customers will be in a better position to pay their bill,” Wildfire and AzPIRG said in comments filed with the commission.

But AARP, which represents seniors, has strongly objected to the use of National Weather Service advisories to dictate suspension of power shutoffs, citing the special health risks of extreme heat on older people and suggesting that the advisories are inadequate.

The group is advocating for a 95-degree temperature threshold and also wants to raise the amount of arrears that can trigger a service termination raised from a proposed $100 to $300, or at least $200.

AARP also has opposed allowing the utilities to pick their method of determining to suspend shutoffs due to weather, saying it fears the utilities will simply pick the method most beneficial to their bottom lines.

Commissioner Sandra Kennedy has filed an amendment requiring the utilities to suspend service shutoffs if any of the conditions proposed by the commission staff are met, while dropping the upper temperature threshold to 90 degrees.

Safety of IN-PERSON VISITS DEBATED

TEP and APS also objected to a provision in an early version of the staff’s proposed rules that would have required utilities to make at least two in-person visits to notify customers they are subject to disconnection — citing threats that some customers have made against employees who visited them.

Since 2018, TEP has recorded 55 incidents during notification visits that employees regarded as “hazardous or threatening” — with 46% involving threats with guns and 31% involving threats of serious physical injury, Barrios said.

And during three months during the shutoff moratorium in 2019 when TEP tried to contact some 4,000 customers in person, 70% of customers did not answer the door so the company left behind information on financial assistance, though mailings and phone calls proved more effective, Barrios said.

“We feel there are better ways to do it — there’s a safety concern and an effectiveness concern,” he said.

APS said in-person visits are “unsafe, ineffective and will cause customer resentment,” noting that it has documented many cases of hazardous encounters during employee visits to customers.

Corporation Commissioner Ana Tovar has filed proposals to require two in-person notification visits, while allowing utilities to skip that procedure for customers who have threatened employees in the past.

Electric power CO-OPS FOLLOW OWN RULES

Regulators have proposed different rules for the state’s member-owned electric power cooperatives, which are often treated differently by the commission because of their special situation and self-governance.

The new rules impose some new requirements on the co-ops but generally defer to disconnect rules adopted as part of prior rate cases.

Most of the state’s electric co-ops, including Trico and Sulphur Springs Valley in Southern Arizona, have been allowed to use National Weather Services advisories as a shutoff guideline, instead of being required to follow the June 1-Oct. 15 moratorium, according to a filing by the commission’s staff.

Under the current proposed rules, natural-gas providers such as Southwest Gas and UNS Gas would be required to follow similar service-termination rules, with the option of choosing a temperature-based standard of less than 32 degrees.

The new disconnection rules are expected to be considered for a final vote at the Corporation Commission’s open meeting, scheduled for Tuesday, April 13, and Wednesday, April 14.

Separate Corporation Commission proceedings on proposed new service termination rules for regulated telephone providers and water companies are still pending.