Utility Billing for Local Government During COVID-19

By: Sara Shonrock

As social distancing becomes a normal way of life, local governments are struggling with the immediate shutdown of all “non-essential” services and the likely economic impact resulting from job losses of residents. 

As a city government, there are still essential services that are needed during this time including electric, gas, and sewer and water.  These services, especially water and sewer, are most often provided by the municipal government and in the face of an unsure landscape for citizens, many cities are shifting the way they do business to meet the needs of their residents.

Unpaid utility bills are usually charged a late fee, and in most cities, subject to a shutoff notice.  For many cities, this is the only way to continue to provide these services on a tight budget.  COVID-19 has changed the way that we view such services and the way that we can deliver them as well.  

On March 13, 2020 the Iowa Utilities Board issued an emergency order directing all electric and natural gas utilities in the state to cease disconnection of residential service due to nonpayment.  The IUB on March 19, 2020 urged all utilities to refrain from utility service shutoffs, especially water service, during the coronavirus outbreak and supports the IDHR to extend the LIHEAP application period to May 31. While electric and gas are often required to stay on during the winter months, the order extends the moratorium on shut-offs to May 1, 2020.  The emergency order gives information as to gas and electric specifically but does state that water should also not be shut off during this time.

Many city utility services are funded strictly by payments for use from residents.  The guidelines for shutoffs often come after one month of missed payment to try and prevent a large bill that will likely not be paid. Cities often charge a late fee a few days after the bill due date goes unpaid.  Often after a two-week period, cities will then choose to put a door hanger alerting the resident that they are going to be shut off.  

Cities that choose to keep water on during this time have a few options.  

  • The first is to continue to charge late fees.  In this way, they may still collect additional monies while trying to assist residents with staying connected in an unsure time.  
  • The city can choose to try and work with residents and landlords.  Landlords whose renters are not paying their utility bills may begin to receive the bills for the rental property.   
  • The city can choose to continue to use the door hanger method and decide whether or not to charge late fees.  

While many cities may choose to not disconnect utilities during this time, there will still be options for recourse after the fact with the continuation of late fees.  Cities will continue to have recourse to property liens for unpaid fees and bills when recovery does occur. 

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