According to testimony before the Interim Joint Committee on Local Government, the lingering effects of COVID-19 continue to impact municipal utility systems across Kentucky. Tuesday’s hearing allowed legislators to hear directly from those keeping the lights on and water running in cities across the commonwealth.
Kentucky Rural Water Association Executive Director Gary Larimore thanked legislators for the passage of House Bill 272 during the 2021 Regular Session of the General Assembly. The KLC initiative protected the ability of a municipal utility to collect payments and designated utility workers as essential. Larimore said the legislation has helped stop the bleeding and ensured that vital revenue flows into local utilities.
Larimore stressed that the pandemic’s impact on water utilities depended greatly upon location and customer base. He added that all utilities struggled with workforce shortages and COVID-related employee absences, and he encouraged legislators to add public utilities to apprenticeship incentive programs like the Kentucky Work Ready Scholarship.
Supply chain issues are also having an effect. Larimore reported that one utility could not conduct new meter settings because of a lack of equipment. That community, he said, is one of the faster growing in Kentucky, and the pandemic has hampered progress. Larimore warned that construction supply shortages would cause water rates to increase.
“You can’t get anyone to give you a price or guarantee a price,” said Larimore. “Basically, the price is once those pipes are delivered that day. What that price is that day is what you’re going to have to pay, and unfortunately, I think you see that across most industries. Obviously, this is all going to impact rates.”
Jeff Hurd, the general manager of Hopkinsville Electric System and EnergyNet, testified about the impact on electric and internet utilities. He reported that his city honored Governor Andy Beshear’s executive order preventing shutoffs and late fees for the pandemic’s first six months. However, he revealed that the suspension created more than $660,000 worth of delinquent electric and internet bills for his system.
After the governor’s executive order expired in November, Hurd said the city set up a six-month payment plan to help people get caught up on their bills. He reported that 84% of those customers made their payments. The outstanding amount for the city currently totals about $105,000.
KLC helped secure passage of House Bill 272 during the 2021 session. A key provision of the law ensures that a public emergency does not sideline Kentucky’s more than 3,200 municipal utility workers. The measure designates utility workers as essential to ensure they can respond quickly when serious situations arise. In addition, it allows utilities to charge a late fee up to 10% and protects the ability of a municipal utility to collect payments. Municipal utilities often operate on razor-thin margins and prohibiting them from collecting revenue could threaten the ability of the utility to operate.