Utility Sees Unpaid Bills, Virus Protection Costs

By Jim Saunders

With customers losing jobs and employees facing health threats, Gulf Power saw a drop in payments for electric service in April as it also spent money to try to prevent the spread of COVID-19, a regulatory filing shows.

Gulf, the largest utility in Northwest Florida, said it received about $6 million less in customer bill payments in April than it ordinarily would have collected during the month. About $2.1 million is considered “bad debt,” up from the historical average for April of about $300,000, the company said Friday in the filing at the Florida Public Service Commission.

“The company anticipates that COVID-related bad debt expense will continue to increase due to higher levels of write-offs for uncollectible accounts,” the utility said. “Gulf Power estimates that its bad debt expense attributable to COVID-19 … will continue to increase over the coming months.”

Gulf, like other utilities in the state and country, suspended electric-service disconnections in March as the pandemic caused businesses to shut down or scale back and unemployment to skyrocket. But the filing offers a glimpse of how the economic problems have played out in electric service, something that affects most Florida residents and businesses.

It also raises the possibility that Gulf could try to recoup the money when it seeks revised base electric rates, a process that is expected to start in 2021. The filing Friday dealt with an accounting process for bad debt and COVID-19 expenses of the utility.
The Pensacola-based Gulf has customers in eight Panhandle counties. April unemployment rates in those counties included 14.5 percent in Walton County, 13.3 percent in Okaloosa County, 12.8 percent in Bay County and 12.8 percent in Escambia County, according to numbers released Friday by the Florida Department of Economic Opportunity.

Gulf and two other major utilities, Florida Power & Light and Duke Energy Florida, received approval last month from the Public Service Commission to make one-time cuts in May electric bills. Lower-than-expected natural gas costs allowed the utilities to provide the cuts. Tampa Electric Co. received approval for a similar plan that will be spread over multiple months, rather than only providing cuts in May.
The filing Friday also said Gulf expects about $4 million in costs this year for safety-related measures stemming from the pandemic. Those costs include monitoring the health and temperatures of employees and contractors at power plants and other facilities, testing for COVID-19 and antibodies and buying personal-protective equipment such as masks and gloves.

“Gulf Power has undertaken and continues to undertake safety-related actions to ensure its employees, contractors, and customers are protected from COVID-19,” the filing said. “To this end, the company has obtained materials and equipment to limit the potential spread of COVID-19 and has implemented a variety of practices at its facilities based on recommendations from the United States Centers for Disease Control and Prevention and Florida Department of Health.”

Article reposted with permission from The News Service of Florida.