Norwich — The city utilities commission on Tuesday adopted resolutions to reduce the interest rates on delinquent electric, water and sewer bills as ordered by the City Council and extended the relief to natural gas customers left out of Gov. Ned Lamont’s recent executive order.

The Board of Public Utilities Commissioners heard a presentation by Norwich Public Utilities officials on the financial impacts of so many residential customers out of work and commercial customers, such as restaurants and hotels, shut down or greatly curtailed during the COVID-19 emergency. NPU is projecting a 20% reduction in revenues by the end of the fiscal year June 30, General Manager Chris LaRose said.

The board unanimously adopted resolutions Tuesday that eliminated the interest rate on overdue electric, water, natural gas and sewer bills from March 12 through April 30 and reduced the interest on overdue balances between May 1 and Sept. 30 to 0.25% per month, or 3% per year. Overdue balances after Oct. 1 will return to the previous rate of 1.5% per month, 18% per year.

Adopting the reduced interest rates on delinquent bills affirmed the vote by the City Council last week to choose that option rather than a full deferment of utility and property tax bills for 90 days. LaRose said the state mandated relief options left out municipally owned natural gas utilities but he recommended NPU extend the same low-interest rates on delinquent bills to city natural gas customers.

In March, NPU also followed a state-mandated moratorium on utility shutoffs imposed on the state’s for-profit utilities. NPU on April 1 suspended security deposits on new residential and commercial customers.

“NPU recognizes that these unprecedented circumstances are having a very dramatic impact on a number of our customers,” LaRose said in a written statement following the vote. “We hope that by providing a measure of relief along with our previously announced support, we can help our community get through these difficult times,” LaRose said.

Laura Huren, NPU financial planning manager, outlined the projected revenue shortfalls and cuts in spending to try to reduce costs. NPU is expecting a drop in revenue from the budgeted $23.6 million to $18.8 million, about 20% from March through the end of June. NPU has seen a $427,000 drop in cash received from top 60 NPU customers, and cash received from residential customers has dropped by $215,000 per month.

Huren said NPU already has received calls from 500 customers who said they will be unable to make any payments on their latest monthly bills.

To absorb part of the revenue shortfall, NPU has cut expenses by about 7.7%, over $1 million, Huren said. The utility put a hold on many capital improvements projects, suspended tree trimming and worked with labor unions to create flexible hours to reduce overtime by 95%.

Many NPU employees are working remotely. Those at facilities have adjusted their activities to minimize contact, and the customer service center at 173 N. Main St. is closed. Bills can be paid online, by phone or by placing payments in the drop box at the customer service center.

“This may be the most significant financial challenge NPU has ever faced,” LaRose told the board.

Board Chairman Robert Staley asked if NPU should approach a local bank to seek a line of credit to handle the temporary cashflow problem, and LaRose said utility officials had started exploring that possibility just before the pandemic forced immediate shutdowns of businesses and altered operations. He said that remains a possibility.

Although the resolutions approved Tuesday have timeframes spelled out for customer relief, LaRose said it’s uncertain when operations and revenue will return to normal. He said NPU is working on its return-to-work plan, but that will be based on federal and state guidelines.

“How quickly everybody returns to work and gets paychecks will dictate how quickly we can adjust,” LaRose said.

c.bessette@theday.com