Earlier this year, Duke Energy decided it would not shut off electricity for customers who fell behind on their power bills during the coronavirus pandemic, and it waived late fees it would normally charge to those delinquent accounts.
The policy, which many other utilities also implemented, provided some leeway for thousands of individuals and businesses who lost jobs and revenue during the public health crisis and economic recession.
But that effort may not be as generous as it once seemed.
Last week, Duke signaled it will ask power customers in South Carolina to refund the company for the millions of dollars in late fees and unpaid bills it was unable to collect this year.
Attorneys for Duke, which operates utilities in six states, informed South Carolina's utility regulators the company may seek to recover that money as part of a future rate hike. And the power company asked regulators on the S.C. Public Service Commission to park those costs in an account until that time.
Ryan Mosier, a spokesman for Duke, said the company is still providing emergency relief to financially strapped power customers in South Carolina. But he noted those policies directly affect the operating margins for Duke, which is worth more than $60 billion on Wall Street and paid out $2.6 billion to its shareholders last year.
"We recognize that many of our customers have experienced financial hardship during this challenging time. We have worked hard to help customers by suspending disconnections, eliminating late fees and relaxing payment timelines," Mosier said.
He added, "While these efforts have helped to provide some relief, they have resulted in significant operational costs for energy that has already been supplied to customers."
Duke's two subsidiaries in South Carolina supply power to areas around Greenville, Spartanburg, Florence, Myrtle Beach and other parts of the Pee Dee and Upstate.
Together, the two Duke utilities estimate they would eventually ask customers to pay $5.5 million for the late fees that were waived this year. They are also likely to ask for an estimated $2.4 million to make up for customers from whom they are unable to recover missed payments.
Mosier noted that Gov. Henry McMaster asked utilities in South Carolina to temporarily end their shutoff policies earlier this year, and the PSC later mandated those changes for the investor-owned companies it regulates.
Mosier also emphasized Duke is not alone in making this type of request. Utilities in other states have worked to persuade state lawmakers and utility regulators why they should be able to pass on similar charges to their customers too.
Duke's filing with the PSC cites legislative bills and regulatory cases in states including Georgia, Indiana, Mississippi and Virginia where utilities are asking to recover expenses or make up for lost revenues tied to COVID-19. Dominion Energy, the other investor-owned power company in South Carolina, did not know at this time whether it would seek similar costs from its customers in the Palmetto State.
Duke is asking to package the uncollected late fees with other expenses associated with the pandemic. That includes an estimated $1.8 million for masks and other personal protective equipment and $413,000 for technology to allow Duke employees to work from home.
Duke, which is based in North Carolina, could also ask for another $1.5 million for various labor costs. That includes "stipends" that were handed out to Duke employees so they could cover child care and other "unforeseen expenses" during the pandemic.
Mosier said those stipends were essential to ensuring Duke's employees "could continue delivering reliable electric service to hospitals, essential businesses and homes across South Carolina."
Shelley Robbins, the energy and state policy director for Upstate Forever, has pushed back against Duke rate hike requests in the past.
She doesn't understand why Duke needs to be reimbursed for the late fees the company waived this year, and she questions whether the company would be financially harmed if it missed out on that money.
The late fees are a deterrent, Robbins said. They are meant to discourage customers from missing the payment on their monthly bill, not to boost the profits of the utility, she said.
"Late fees are designed to help Duke Energy recoup some of the costs of carrying balances that are in arrears or accounts that are delinquent or in default," Mosier said. "These are real operational costs of serving customers."
It will be up to the PSC to review Duke's request and decide if the company should be allowed to store up all of its coronavirus-related costs for its next rate case.