The City Council voted on Monday to restore utility shut-offs for late payments and provide some relief to customers with past due bills.
City officials have been struggling to figure out how to collect more than $8 million in late fees owed to the utility since the pandemic began.
About 7,500 residential customers are delinquent by more than 60 days along with 1,400 commercial accounts.
“We would resume eligibility for shutoff on large commercial accounts on Sept. 7 and our smaller commercial accounts and residential accounts on Oct. 4,” said Shari Thomas, Pasadena Water and Power assistant general manager.
According to Thomas low-income customers account for a small amount of the $8 million owed.
“The utility is owned by the residents and to hear that low-income residents are paying their fair share and large users are not is troubling,” said Mayor Victor Gordo.
Over 80 percent of the residential customers owe less than $1,000, according to Thomas. The city has reached out to more than 7,000 customers to sign up for a payment plan, but only a few hundred have responded.
“We’ve been keeping an eye on who is paying and who is not,” said General Manager Gurcharan Bawa. “Some of these businesses have closed and some have filed for bankruptcy and they owe us a lot of money.”
The city typically does not shut off utilities during the holidays.
The city will make efforts to emphasize that local residents should begin paying their bills before the deadline.
City Manager Steve Mermell said a lot of people took things hard with the pandemic but pointed out many of the commercial accounts received large payments from the city when the city issued refunds at the beginning of the pandemic.
“I have seen some partial lists with business accounts on there and I’d dare say some are taking advantage a little bit to increase their cash flow,” Mermell said. “Single family residential that’s the last person we want to shut off and we will work to make arrangements with them.”
Pasadena Water and Power will consider extending the time period for utility bill payment plans from the currently offered maximum of nine months to up to 18 months for customers who are financially impacted by COVID-19 and where evidence of particular hardship is provided; and, apply deposits to outstanding utility bills.
Using the deposits would recover at least $1 million.
Chamber of Commerce President and CEO Paul Little said he hopes the council extends the payment time for late payments to 24 or 36 months.
“If they expect that people are going to be able to basically write them a check for 18 months’ worth of utilities that’s pretty unrealistic,” Little said.
In mid-February, late payments totaled $7.7 million, but now that has ballooned to over $8 million and does not include late fees which are currently not being collected.
According to a city report, there has been an 816% increase in accounts delinquent for 61 days or more for an amount totaling $7.7 million, up from $841,179 in January 2020.
The council will also consider increasing the maximum one-time per year electric bill relief for low-income customers facing shut-off for nonpayment from $100 to $200.
“The bottom of the barrel in terms of societal response are things like eviction and turning off the power,” said Allison Henry. “And so, when I think about the city of Pasadena … I understand they’ve got to start planning and all this. It just seems like they should be thinking more about how to access additional funds.”