Appalachian Power, consumer advocates look to reduce customer disconnections

Tens of thousands of Appalachian Power residential customers in Virginia see their electric service shut off for late payment each year.

On average, their power is back within 12 hours, according to the utility.

But on top of spoiled groceries and other potentially costly impacts of losing power, finding money for the fees and deposits required to get reconnected can be a challenge for people already in financial trouble, said Dana Wiggins, director of consumer advocacy with the Virginia Poverty Law Center.

“There are all kinds of reasons that people get behind, but then coming back current can be a real struggle. We shouldn’t hurt people while they’re already down,” Wiggins said.

Now, Appalachian Power and the VPLC are preparing to work together to reduce residential customer disconnections.

The VPLC is a Richmond-based nonprofit that aims to help low-income Virginians through advocacy, education and litigation. Among other services, it provides a utility helpline to offer guidance for people challenged by their bill balances.

The State Corporation Commission, which regulates utilities in Virginia, ordered Appalachian to work with the VPLC following the utility’s most recent request to raise rates in November.

As part of that rate case, the SCC allowed Appalachian to raise the monthly bill of an average residential customer by $1.39. The average bill has risen by about $50 to $174 in the past three years.

Appalachian must submit its plan to reduce residential disconnections by the next time the power company asks the SCC to review its rates, which will be in March 2026. 

The SCC also directed Appalachian to consider expanding its energy assistance options, and the utility must create a pilot program, in consultation with the VPLC, that would give some customers up to 18 months to catch up on past-due bills, instead of up to 12 months.

Wiggins said she hopes the collaboration will promote an overall mindset that disconnections are not inevitable but rather can be avoided.

“This system, it can work better. And we need everybody’s help to make it do that,” she said.

Appalachian Power spokesperson George Porter said the utility shares the VPLC’s goal of reducing disconnections and said the company offers programs and payment options to help.

“We understand the state of our customers,” he said. “We understand the poverty level, we understand people are struggling, we understand inflation rates. It doesn’t help our bottom line if we can’t do something to help our customers. That’s the goal: to see what we can do to help our customers so they can make their payments.”

Porter said that on average, about 63,000 Appalachian customers each year are disconnected.

From November 2023 to October 2024, about 46,000, or 9%, of Appalachian’s 466,000 residential customers experienced a disconnection, according to data from the utility provided by the SCC. 

For comparison, 14% of Dominion Energy’s residential customers and 13% of Old Dominion Power’s were disconnected during that same time period, which was the latest 12-month period for which data from all three utilities was available.

How do customer disconnections work?

When a customer is more than one billing cycle overdue on paying the full amount for electric service, Appalachian sends a notice with the next monthly bill warning that the customer may be disconnected 10 days after the date of the notice unless the past-due amount is paid.

Any time a customer falls behind with two or more late payments in a 12-month period, the utility may require a deposit, unless the customer already has paid one.

The deposit is equal to the average of the last two monthly bills, or if the customer doesn’t have two months of billing history, it’s $225 for a home with non-electric heat or $300 for one with electric heat.

The deposit protects the company if the customer continues to fall behind and eventually stops paying altogether, Porter said.

“That’s just a way for us to secure our accounts,” he said.

The deposit is repaid as a bill credit after a year of full payments.

Porter declined to provide specifics on how much money Appalachian loses due to nonpayment of bills.

“APCo may charge-off bad debt associated with closed accounts,” he said in an email. “The amount of such charge-offs varies on a monthly and yearly basis. To mitigate the impact of bad debt on our current customer base, APCo implements a policy of securing accounts with deposits, which are subsequently applied to final bills.”

A customer who falls behind but simply needs a few more days to catch up can request a one-time extension.

Customers who need more time can have their balances spread out over six or 12 months at no interest. The SCC ordered Appalachian to develop a pilot program to test extending this window to 18 months and to determine how that would impact the company’s financials.

There are certain conditions under which a residential customer cannot, by law, be disconnected from electric service or any other public utility.

Legislation passed during the 2024 General Assembly session forbids disconnections:

• when the temperature is forecast to be at or below 32 degrees, or at or above 92 degrees;
• on Fridays, weekends, state holidays and the day immediately preceding a state holiday;
• during a state of emergency declared by the governor; and
• 30 days after a state of emergency ends.

Most customer disconnections happen between March and June, Porter said.

“We’re coming off the winter months, where bills have been a little bit higher and it’s probably just built up on a lot of customers,” he said.

Because customers’ billing dates vary, there is no particular time of month when disconnections are more frequent.

Customers can be reconnected once they pay their past-due balance, plus the deposit and a reconnection fee: $20 for newer meters that can be reactivated remotely, or $60 for older meters that require a utility employee to manually reactivate them.

Finding solutions

While Appalachian says the deposit and reconnection fee are necessary, Wiggins, of the VPLC, said those charges and the weight of an overdue balance are burdens on a customer already struggling to pay a monthly bill. 

“Even if they don’t have a large balance, it just depends on their income capacity, or their capacity to pay,” she said. “If they don’t have an extra $50 a month, how would they come up with an extra $200 a month on top of their regular payment if they’re already behind? … Our hope is that we can have some positive, real-life discussions, like how can we make this so that the company is getting paid and people are able to stay connected?”

When customers do come up with the money to get reconnected, it’s often because they have chosen to delay paying other bills, Wiggins said.

“I think that people are struggling to do the best that they can and juggle these things, but utility service is seen as essential,” she said.

Porter said Appalachian supports reducing how many residential customers see their electricity shut off.

He encouraged customers to take advantage of the utility’s Average Monthly Payment, or AMP, program, which sets the monthly bill at a 12-month average to avoid seasonal spikes.

And he noted that Appalachian offers a free home energy assessment program, in which an advisor visits a customer’s home and evaluates how its energy efficiency can be improved.

“We’re always trying to figure out ways to ease the burden on our customers. … We’re one of the few companies that I know of that we’re trying to promote ways for people to utilize less of a product that we provide,” he said.

Wiggins said she would like to see more awareness of available assistance programs.

One example of such a program is the Percentage of Income Payment Program, or PIPP, which helps low-income customers with their bills and is funded through a fee attached to all Appalachian Power customers’ bills.

Another is the federally funded Low Income Home Energy Assistance Program, or LIHEAP, which helps with bills, weatherization and certain home repairs.

Wiggins said the relationship between the utility and customers with past-due bills “doesn’t have to be adversarial.”

She hopes the collaboration between Appalachian and the VPLC will focus on “providing a little bit of grace and dignity” for those customers.

“People want to be able to pay for the things that they’re using,” Wiggins said. “Setting people up for failure is as much a blow to dignity as it is to anything else.”