Utility Bill Forgiveness Is Coming To Help (Some) Angelenos

A lineman works to replace cables and components on poles in Aguanga. (Kyle Grillot/LAist)

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If you've been skipping or skimping on paying your gas and electric bills because you lost work in the pandemic, you might find help in the new debt forgiveness policies approved by state regulators this month.

The California Public Utilities Commission calls it an "Arrearage Management Plan" or AMP. It's a plan to forgive or erase debt built up by customers of the state's four largest investor-owned utilities. Locally, that includes Southern California Edison and Southern California Gas Co.

Los Angeles Department of Water and Power is not taking part as it's a city-operated utility, and so not regulated by the state.

The plan starts next year, April 16, 2021, which is when the pandemic emergency ban on utility disconnections ends.

Customers who make on-time payments for 12 months after that date can eliminate their past due bills.

But there are some strings, and not every household will qualify.


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HOW DOES UTILITY DEBT FORGIVENESS WORK?

The new rules are part of a long-standing move by the state legislature, CPUC and consumer advocates to reduce the number of power and water disconnections.

Starting in April 2021, customers who make on-time monthly payments of their current bills can eliminate one-twelfth of their back debt each month, so that after 12 months the entire debt up to $8,000 is forgiven.

To be accepted, you must fit these criteria:

  • Be enrolled in the CARE or FERA subsidized utility rate programs for low-income people. (More about these below).
  • Owe at least $500 in unpaid bills to Edison or $250 to SoCal Gas.
  • Have unpaid balances that are 90 or more days overdue.
  • Have been a utility customer for at least six months and made at least one payment.

CARE AND FERA PROGRAMS

Existing subsidy programs to help low-income customers with their bills include California Alternate Rates for Energy (CARE) program or the Family Electric Rate Assistance (FERA) program for households with slightly higher incomes.

To be considered for the debt forgiveness plan, you must first be enrolled in one of those programs. Previously, the utilities would look at your last 12 months of earnings to determine if your income was low enough to qualify for the subsidized rates.

But in a change in policy, customers who lost jobs in the pandemic may now have incomes low enough to qualify for the CARE or FERA programs and might build up enough debt in the coming months to qualify for the forgiveness plan, said Katie Sloan, Edison's director of customer service.

Edison predicts the number who could qualify for the debt forgiveness could be about 14,000 to 15,000 given the job losses amid the pandemic.

Customers who are already on a payment plan or who start one before the debt forgiveness plan kicks in in April 2021 can transfer into it next year and start erasing past due bills. Other options for Edison customers are at SCE.com/billhelp.

The debt forgiveness program will continue for at least four years, the CPUC decision said. By then, there should be enough data about whether the new consumer protections and debt forgiveness programs actually lower the number of disconnections.

WHY ARE UTILITIES TALKING DEBT FORGIVENESS NOW?

The new rules are meant to implement provisions of a 2017 bill called SB 598, which called for gas and electric utilities regulated by CPUC to reduce the number of customer disconnections for nonpayment.

That law prohibited gas and power companies from disconnecting customers who were financially unable to pay, or had medical baseline service, were on life support equipment or in hospice care. It also protected people who had been diagnosed with a life-threatening condition that made electricity service medically necessary.

The CPUC order issued June 11 includes the debt forgiveness plan plus a slew of other protections.