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NPU revenue projections improve with more customers making payments

Norwich — Norwich Public Utilities staff sent out 3,589 warning notices and called 1,705 customers in late September warning that nonpayment utility shutoffs would resume Oct. 1 for anyone without a payment plan or not registered for hardship assistance.

The effort paid off, as the utility saw increases in revenues that have declined sharply during the COVID-19 pandemic, with business shutdowns and thousands out of work. Ultimately, NPU ended up shutting off power to just 76 customers, and service to all but three of those has been restored.

NPU spokesman Chris Riley said of the three customers still shut off, NPU believes two are vacant buildings or apartments.

“Service termination is always our last option,” Riley said. “We understand how challenging these circumstances are for many people and have made every effort to work with our customers over the last eight months.”

NPU staff members have been providing the Board of Public Utilities Commissioners with monthly updates of the revenue drops and numbers of customers with back-due bills since the COVID-19 business shutdowns and job losses hit in March. For the first time since then, three-month financial projections are starting to improve.

Laura Huren, NPU financial planning manager, reported to the board Tuesday that revenues for the three-month period running from Oct. 1 through Dec. 31 are projected to be off by $1.59 million, 7%, from the originally budgeted total of $23.7 million.

The projected losses include the closure in September of one of NPU’s top customers, the Freeport McMoRan Copper Products plant. Including that closure, industrial customer revenues are projected to decline by 65% from Oct. 1 through Dec. 31. Commercial revenues are projected to be down by 24% during that period.

But in August, NPU had projected revenues through Oct. 31 to be down by $2.3 million, or 10.3%.

NPU now has 851 customers — 812 residential and 39 commercial customers — who owe a total of $1.2 million on special payment plans that offer no interest on back-due balances if customers stick to the payments. The Thames Valley Council on Community Action, which runs utility assistance programs, has a staff person stationed at the NPU customer service center. TVCCA has 328 NPU customers enrolled in its hardship program, providing about $750,000 in assistance to local customers.

The city’s Community Development program has allocated another $200,000 in federal coronavirus relief funds for utility assistance. But that program hit a snag when the U.S. Department of Housing and Urban Development ruled that a municipality cannot use the federal funds to assist customers of a municipally owned utility. Norwich is appealing that ruling, but Community Development Supervisor Kathryn Crees said Wednesday the city has not yet received a response.

NPU has softened the revenue losses over the past seven months with steep cuts totaling $9.1 million in expenses from April through December, including an agreement with employee unions to defer negotiated raises until December and an early retirement plan. NPU also put off many maintenance and capital improvements projects.

But Huren said some of those cuts cannot continue. Negotiated raises and retirement payments to the seven employees who accepted the volunteer offer will be paid in December. Deferred contractual increases total $190,000, and the retirement incentives and payouts total a combined $164,000.

NPU also will restart several maintenance and capital projects totaling $226,000 during the fourth quarter.

Riley said NPU expects to increase expenses by 7% over the next three months to work on necessary projects to ensure reliability of the utility systems going into the colder weather period.

c.bessette@theday.com

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