Bills and Rates

APPA urges members to reach out to lawmakers in support of forgivable loan program

Senate Energy and Natural Resources Committee staff for Chairman Lisa Murkowski, R-Alaska, and Ranking Member Joe Manchin, D-W.Va., has developed language with the American Public Power Association and the National Rural Electric Cooperative Association to create a forgivable loan program for public power and rural electric cooperatives impacted by customer non-payments due to the COVID-19 pandemic.

APPA is strongly encouraging its members to reach out to their senators and members of Congress to express support for the inclusion of this language in the COVID package that is still being negotiated by the White House and House and Senate leadership.

The loan program would be operated by the Department of Energy and would provide loans to qualified utilities to ensure they can continue to provide electric service to their electric consumers during the pandemic.

The Secretary of Energy could issue one or more loans “in amounts equal to the utility’s payment shortfall.” The interest rate for loans would be no higher than 1 percent per year.

Loan proceeds can be forgiven by the Secretary of Energy equal to the total amount of the payments the utility was unable to collect from its electric consumers by the loan repayment date for electric service provided by the utility to its electric consumers during the emergency period.

Utilities that receive loans under this program would have to suspend power shutoffs to their residential customers for the length of the national emergency. If a utility receiving a loan were to reinstate residential shutoffs before the end of the national emergency, it would have to pay back the loan in full plus accrued interest no later than 90 days after reinstating shutoffs.

Nothing in the text would relieve an electric consumer from having to pay for electric service provided to him or her.

Also, a utility receiving a loan would still be obligated to make a reasonable, good faith effort to collect payment for electric service from its electric customers. The forgiveness piece of this language is designed to cover revenue losses due to customers who truly cannot pay their bills.