One in three SMUD customers are behind on bills. Shutoffs and late fees are about to resume

Despite millions of dollars in state support to cover unpaid Sacramento Municipal Utility District bills, more than 204,000 residential and commercial customers are still behind on payments and in debt.

Unpaid utility bills soared during the COVID-19 pandemic, a sign of the deep financial hardship residents and businesses experienced. SMUD like other California utilities stopped shutting off power for customers behind on bills and suspended late fees almost as soon as the pandemic became widespread in March 2020.

But that reprieve is coming to an end. Starting in late February, SMUD plans to restart its normal billing process — with late fees and power disconnections following soon after for those who don’t set up a repayment plan.

“We will continue to work with our customers and our community partners to help customers avoid disconnection,” spokeswoman Lindsay VanLaningham said in a statement.

Nearly a third of the roughly 645,000 residential and commercial customers SMUD serves are in arrears. Of the people behind on bills, 137,000 customers are more than 30 days past due, according to VanLaningham.

The total debt from unpaid bills owed to SMUD is about $76.3 million, according to VanLaningham, though the figure fluctuates daily.

That number includes unpaid bills from both before and during the pandemic, but for comparison, before COVID-19, SMUD typically carried about $22 million in debt.

Last February, the California Municipal Utilities Association estimated that publicly owned electric utilities like SMUD were owed more than $300 million in unpaid bills, though that figure could be higher today. Across the country, millions of families and businesses — disproportionately in low-income neighborhoods and communities of color — fell behind on their utility bills, racking up billions in debt.

Over the coming months, thousands in Sacramento will be forced to reconcile unpaid bills that they may not be able to afford. Even before the economic crisis of the pandemic, energy bills are a heavier burden on low-income homes compared to other households.

State COVID relief funds help some

The state Legislature created a nearly $1 billion financial assistance program last year using federal COVID-19 relief funds to help people with energy bill debt. Under the program, utility companies would apply for the state funds, then use it to cover customers’ unpaid energy bills.

Designed to help people who incurred debt between March 2020 and June 2021, the California Arrearage Payment Program made nearly $300 million available to publicly owned utilities like SMUD.

SMUD received $41.3 million in state funding, and over the last 30 days, has applied all of the money to roughly 57,000 customers who had debts accumulated from between March 4, 2020 and June 15, 2021, according to VanLaningham.

Those funds covered 100% of the debts owed by residential customers with past due balances of 60 days or more, VanLaningham stated, as well as roughly 72% of old debts owed by inactive residential customers.

Still, thousands still own money to the utility. Even customers whose bills were partially covered by the state assistance may still be in debt if, for example, they had unpaid bills prior to March 2020 or unpaid bills after June 2021.

“We have worked with our customers throughout the pandemic providing relief in myriad ways and will continue to advocate for our customers at the local, state and federal levels,” VanLaningham said in a statement.

Power shutoffs, late fees returning

Late fees will resume in March, according to VanLaningham. If a customer doesn’t contact the utility to set up a payment plan, SMUD could start disconnecting power for people in mid-April.

SMUD has several financial assistance programs that customers may be eligible for, including the Home Energy Assistance Program and EnergyHELP. The utility also expanded its eligibility for discounts on rates — a family of two adults and two kids making less than $4,600 a month qualifies.

“We’re here to help and ask that customers struggling with their bills, contact us for help,” VanLaningham stated.

This story was originally published February 3, 2022 at 5:25 AM.