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Norwich Public Utilities nears one year of COVID-19 financial impacts

Norwich — As Norwich Public Utilities nears the one-year mark of financial impacts from the COVID-19 pandemic, many residential and commercial customers continue to struggle to pay their bills and seek payment plans as NPU continues to defer expenses and cut costs.

The Board of Public Utilities Commissioners on Tuesday heard a report from Laura Huren, NPU financial planning manager, on the latest actual NPU revenue figures and projections through the next two months. It was the final such update before the board will hear a full presentation on the proposed 2021-22 budget for all four utility divisions — electric, water, natural gas and sewer — on March 23.

Last spring, before COVID-19, NPU budgeted for $27.7 million from Feb. 1 through April 30, 2021. But actual expenses through February and projected numbers through April 30 show a total of $26.9 million in projected revenues, a shortfall of $881,000.

During winter months, NPU has a moratorium on service shutoffs for hardship customers. This year, 1,455 customers are designated as hardships, up from the usual 1,400 per year, NPU spokesman Chris Riley said. Another 1,058 customers have signed up for special payment agreements — 1,023 residential customers with $1.1 million in overdue bills and 35 commercial customers owing another $1.1 million in back bills.

Riley said those numbers have held steady for the past two months, and NPU has started to receive bill payments for residents and commercial customers through federal COVID-19 relief Community Development Block Grants awarded to the city. Initially, the city was told those grants could not be used to help customers pay utility bills, but that ruling was reversed by the U.S. Department of Housing and Urban Development after intervention by U.S. Rep. Joe Courtney, D-2nd District.

With more people working and attending school from home, residential utility sales for the three-month period from Feb. 1 through April 30 are projected to be up by 13.5% over the originally budgeted projection, while commercial sales are projected to drop by 17% and industrial sales to sink by 65.5%, Huren reported.

NPU hopes to recover the declines as the pandemic eases, but one of the utility’s largest industrial customers, Freeport McMoRan Copper Products plant, closed permanently last August. The commercial laundry Atlantic City Linen Services, which handles the region’s two casinos, closed temporarily during the pandemic.

The total amount owed for bills more than 31 days overdue has jumped by about $1 million over the past year, from the February 2020 total of just under $9 million to the February 2021 total of nearly $10 million.

When the pandemic hit and NPU leaders saw the dramatic drop in revenues last spring, as businesses closed and residents struggled to pay their bills, they immediately adjusted the just-approved 2020-21 budget, cutting overtime, deferring maintenance and postponing major capital projects. Those efforts have saved $12.4 million from April 2020 projected expenses to the April 2021 projected expenses.

But expenses have increased during the winter, Huren said, including purchased power costs mostly recovered through customer bills.

Deferred maintenance and some capital projects will be included in the proposed 2021-22 budget the board will review at the March 23 meeting, Huren said, as utility staff try to balance the need to continue finding savings while ensuring the utility’s infrastructure remains in good working condition and reliable.

“A lot of the savings over the past year are more of a deferment,” Huren said. “A lot of times, we pushed them forward to 2021 or 2022. Some are real savings. We continue to review our operations and schedule out those projects. We also need to be responsive to our customers.”

c.bessette@theday.com

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