Norwich — The financial picture for Norwich Public Utilities continues to improve, although revenues are expected to remain below budget projections made before the COVID-19 pandemic hit in mid-March.

NPU administrators have been providing monthly projections to the Board of Public Utilities Commissioners since spring, with projections made on a rolling three-month basis. Residential utility use has jumped significantly during the coronavirus pandemic, with more people working and learning at home. But job losses have caused many to fall behind on bill payments. Commercial revenue has suffered from business closures and cutbacks.

Laura Huren, NPU financial planning manager, told the board Tuesday that projected revenues for Dec. 1 through Jan. 31 are expected to fall $1.19 million short of the budgeted $26.9 million, a 4.4% drop.

But while still bleak, the three-month rolling projections have been improving steadily since summer. In August, NPU officials projected the three-month period from Sept. 1 through Oct. 31 to fall $2.3 million, 10.3% short of budgeted totals. And in October, the utility’s revenue loss for the period from Oct. 1 through Dec. 31 was projected at $1.59 million, down by 7% from the budgeted totals.

Throughout the pandemic, NPU has softened the COVID-19 blow by drastically cutting expenses by nearly $9.8 million, with deferred employee raises, deferred capital projects and maintenance.

In September, the utilities commission voted to end the moratorium on utility shutoffs for non-hardship customers in arears on their bills who have not signed up for special payment plans. The move improved monthly revenues and encouraged more customers to sign up for payment plans.

NPU spokesman Chris Riley said as of Tuesday morning, 1,327 customers have enrolled in special payment plans, including 1,277 residential customers with bills totaling $1.6 million and 50 commercial customers with bills totaling just under $120,000.

Norwich officials hope to use funds from a U.S. Department of Housing and Urban Development community development block grant to assist Norwich residents with utility bills. HUD had ruled that the city could not use the funds to pay bills to a city-owned utility, but a reversal of that ruling is expected soon, officials said.

In addition, NPU has 788 hardship customers who are exempt from service shutoffs during the winter moratorium that started Nov. 1. NPU averages about 1,400 winter hardship customers per year, and now is “ahead of where we usually are for late November,” Riley said.

The Norwich utilities commission also on Tuesday heard an update on the projected rising cost of purchased natural gas. NPU Division Manager Steve Sinko said NPU’s total purchased gas cost for next fiscal year is expected to increase by $3 million to $7.8 million.

The utilities commission approved new natural gas rates in September for the next three years, with no rate increase in 2020, and increases of 2.3% starting in November 2021, and another 2.3% in November 2022.

But NPU customers’ natural gas bills will rise starting Jan. 1 due to an increase in the cost of bringing natural gas to Norwich as part of the separate purchased gas adjustment on customers’ bills. The increase of 14.2 cents per 100 cubic feet of natural gas consumed translates to a roughly $7.32 per month increase for an average residential customer. The increase is expected to cover the entire NPU purchased gas cost increase spread out over a 2 1/2-year period, Sinko said.

NPU officials said the utility is “doing everything we can to mitigate the impact on customers,” but the national and regional natural gas economic factors are “beyond our control.”

c.bessette@theday.com