Month: April 2020

Electric Co-ops Face $10 Billion Revenue Loss by 2022 Due to COVID-19

Electric Co-ops Face $10 Billion Revenue Loss by 2022 Due to COVID-19

COVID-19 is projected to cost electric cooperatives $10 billion in load loss and unpaid bills through 2022, new research by NRECA finds.  

Economic disruptions related to the pandemic will drive electric co-op sales down by 6.1% in 2020, 6% in 2021, and 3% in 2022, for an average loss of 5% over the period when compared to pre-COVID-19 projections, according to NRECA estimates. 

This loss of electric load will slash co-op sales revenue by $7.4 billion, while a surge in unemployment, combined with a moratorium on disconnections, will drive up unpaid electric bills to $2.6 billion through 2022, the report says.

NRECA CEO Jim Matheson urged the administration and Congress to recognize the peril this represents for co-ops and their members and to act quickly to blunt unprecedented financial hardship.

“As the economic impact of this pandemic spreads, electric co-ops are being challenged like never before to keep the lights on for millions of essential service and frontline workers in hospitals, grocery stores, food production, critical infrastructure and families quarantined at home,” Matheson said.

“Policymakers must act to address COVID-19’s financial threat to co-ops and rural communities and prevent significant disruptions.”

Forecasts from Moody’s Analytics show a sharp decline in U.S. GDP and a lengthy recovery through mid-2023 due to the pandemic. NRECA leveraged those forecasts and other publicly available information in the analysis.

“Electricity powers the American economy, and a stalled economy uses less energy,” said Russell Tucker, NRECA’s chief economist. “As GDP growth falls in the wake of COVID-19, co-op electricity sales will decline.” 

He noted that disconnect moratoriums in 46 states are likely to dramatically increase delinquency rates for cooperatives.

On top of the financial crush, Tucker said about 2.5 million jobs in co-op communities are in the most at-risk sectors of the economy, including energy extraction, transportation and tourism.

“As the coronavirus pandemic evolves,” he said, “the economic impact on the communities and members served by electric cooperatives is significant and is growing.” 

Cathy Cash is a staff writer at NRECA.

Scammers Target Co-op Consumer-Members

Scammers Target Co-op Consumer-Members

LOUISVILLE, Ky. (April 23, 2020) – Electric cooperatives across Kentucky are reporting a surge in scammers attempting to exploit Kentuckians amidst the COVID-19 crisis.

Since the COVID-19 pandemic began its spread, consumer-members in at least six electric cooperative service areas across Kentucky have reported receiving calls from someone claiming to work for the local electric co-op and threatening to disconnect service without immediate payment.

In March, the Kentucky Public Service Commission issued an order that halts disconnections for non-payment and fees for late payments. The PSC cautioned that these temporary measures do not relieve customers of the obligation to ultimately pay bills in full, and co-ops have been working with their members on deferred payment plans and other assistance to ease the transition once the pandemic has passed. 

Coops urge members to avoid arranging payment or divulging account or personal information, including debit or credit card information, over the phone unless you are certain you are speaking to your utility. If you are unsure, hang up and call the publicly listed number for the utility. When making online payments to your electric provider, always double-check to ensure that you are on the correct website before submitting credit card information.

Kentuckians who suspect a scamming attempt should contact their utility and the Kentucky Attorney General’s office:

Online scam reporting form:  ag.ky.gov/scams

Consumer Protection Hotline:  1-888-432-9257

Below are some tips Kentuckians should follow to protect themselves: 

  • Do not assume the name and number on your caller ID are legitimate. Caller IDs can be spoofed.
  • Never share your personal information, including date of birth, Social Security number or banking account information.
  • Never wire money to someone you don’t know.
  • Do not click links or call numbers in unexpected emails or texts – especially those asking for your account information.
  • Most utilities will NOT require their customers to purchase prepaid debit cards or money orders to avoid an immediate disconnection. 
  • If you receive a call that sounds like it may be a scam, or if you believe the call is a scam, hang up, call the police, report the incident to your local utility, and report the call to the Attorney General’s Office.
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About Kentucky Electric Cooperatives:

Kentucky’s electric cooperatives serve more than 1.5 million people – about 35% of the state’s population – in 117 of Kentucky’s 120 counties.  The statewide association provides representation before the General Assembly, Congress, and regulatory bodies: safety training; coordination of management training; and public relations support including publication of Kentucky Living magazine.  Kentucky Electric Cooperatives is governed by a board consisting of one manager and one director from each of its 26 member systems and is headquartered in Louisville.  

McConnell briefs Kentucky electric cooperative leaders

McConnell briefs Kentucky electric cooperative leaders

LOUISVILLE, Ky. (April 21, 2020) – On a Tuesday morning conference call, U.S. Senate Majority Leader Mitch McConnell (R-KY) briefed leaders of Kentucky’s electric cooperatives on the progress of coronavirus relief measures, and listened to co-op concerns about the impacts of the pandemic on local communities.

Kentucky Electric Cooperatives, the statewide association of the local member-owned co-ops, projects at least a $90 million loss of co-op revenues statewide through May as a result of COVID-19. While much of that loss in revenue is due to a downturn in electricity sales due to state mandated restrictions on economic activity, co-ops are also shouldering millions of dollars in bill non-payment. Co-ops are providing information about available resources and working with consumer-members to help them avoid large balances in the future.

“Even in these uncertain times, Kentucky’s electric cooperatives continue providing unfailing service across our Commonwealth. I’m heartened to have them lighting the way,” said Senator McConnell. “As Senate Majority Leader, I’m constantly working to put Kentucky’s priorities at the center of the national discussion. I’m grateful for the information the co-ops shared with me, and I enjoyed the opportunity to update them on the Senate’s efforts to deliver immediate relief during the coronavirus crisis.”

To help prevent the need for rate increases to offset revenue losses, co-ops are seeking federal legislation that would direct the U.S. Department of Agriculture’s Rural Utilities Service program to take advantage of historically low interest rates and allow co-ops to reprice or refinance RUS debt without penalties for borrowers and to increase the amount of lending available under the RUS Guaranteed Underwriter Program. Cooperatives are also seeking to be included in future coronavirus relief including increased funding for rural broadband service.

“We greatly appreciate Senator McConnell hearing our concerns and demonstrating his awareness of how this pandemic is affecting rural Kentucky,” said Chris Perry, president and CEO of Kentucky Electric Cooperatives. “We would have certainly understood if this call had been postponed as he negotiates coronavirus relief legislation, but Sen. McConnell always has time for us, and we believe that by understanding our concerns, the legislation he negotiates in Washington reflects real needs here back home.”

Kentucky’s electric cooperatives continue to provide service and perform necessary maintenance and repairs while following CDC guidelines such as social distancing. Cooperatives have adjusted staff schedules to protect the safety of the employees and maintain quality service levels. 

About Kentucky Electric Cooperatives:
Kentucky’s electric cooperatives serve more than 1.5 million people – about 35% of the state’s population – in 117 of Kentucky’s 120 counties.  The statewide association provides representation before the General Assembly, Congress, and regulatory bodies: safety training; coordination of management training; and public relations support including publication of Kentucky Living magazine.  Kentucky Electric Cooperatives is governed by a board consisting of one manager and one director from each of its 26 member systems and is headquartered in Louisville.