CEO’s Report: Relief during the pandemic

When I think back to writing this column a month ago, it is truly mind boggling to consider everything that has changed since then.

In one month, we have completely changed the way we live our lives. We are staying home, distancing ourselves from friends and family, and many are working remotely, in an attempt to slow down a pandemic like we’ve never seen before.

A month ago, I wrote about our recent trip to Washington, D.C. to discuss public power issues with those in Congress. Today, Congress has an entirely new outlook as they work to keep Americans safe while attempting to keep the economy running and helping millions who are losing their jobs.

Last week an unprecedented $2 trillion relief package was approved. The Coronavirus Aid, Relief, and Economic Security (CARES) Act provides monetary stimulus for the majority of Americans and relief for small businesses struggling during this pandemic.

Small business support

Small businesses are the heart of our customer communities. Local entrepreneurs have invested in those communities, providing necessary services, products and jobs.

Now, those businesses may be struggling due to the COVID-19 pandemic.

The CARES Act includes nearly $350 billion for a federal small business loan program called the Paycheck Protection Program. The program is designed to get cash in the hands of suffering small businesses quickly, with less red tape and fewer guardrails than existing loan programs offered by the U.S. Small Business Administration.

Businesses and 501(c)(3)s with less than 500 employees will likely be eligible. If all employees are kept on payroll for eight weeks, SBA will forgive the portion of the loans used for payroll, rent, mortgage interest, or utilities. Up to 100 percent of the loan is forgivable.

SBA is also offering low-interest federal disaster loans for working capital to small businesses suffering substantial economic injury as a result of COVID-19.

Upon a request received from a state’s governor, the SBA will issue under its own authority, as provided by the Coronavirus Preparedness and Response Supplemental Appropriations Act that was recently signed by the President, an Economic Injury Disaster Loan declaration.

Any such Economic Injury Disaster Loan assistance declaration issued by the SBA makes loans available statewide to small businesses and private, non-profit organizations to help alleviate economic injury caused by COVID-19. This will apply to current and future disaster assistance declarations related to COVID-19.

The SBA’s Economic Injury Disaster Loans offer up to $2 million in assistance and can provide vital economic support to small businesses to help overcome the temporary loss of revenue they are experiencing.

More information on these programs as well as other resources for small businesses can be found at www.sba.gov.

Low-Income Home Energy Assistance

A major concern for utility providers during the pandemic is the effect unemployment and the economic downturn will have on at-risk utility customers, including low-income households and seniors.

While many utilities appear to already have announced they will not cut off power to customers during the pandemic, all customers are still obligated to pay their bills.

To help these customers, Division B of the CARES Act provides $900 million for the Low Income Home Energy Assistance Program. This $900 million comes in addition to the $3.74 billion already appropriated for the account for fiscal year 2020.

Utility shut offs

The House Democratic version of the third coronavirus bill would have prohibited utilities from shutting off power for non-payment during the pandemic. The American Public Power Association raised concerns that such a requirement was unnecessary and would have unintended consequences.

In a many states, a utility cut off notice is required to qualify for emergency LIHEAP benefits. As a result, prohibiting the issuance of such notices could actually deny at-risk customers the very help they need.

The final draft of the CARES Act includes no such language, but APPA will continue to educate lawmakers about this issue.

Power Marketing Administrations

Additional emergency funds provided to Power Marketing Administrations (PMAs), the Army Corps of Engineers (Corps), and Bureau of Reclamation (Bureau) hydropower programs may be recovered in rates by electric customers, which is likely an unintended outcome.

If the PMAs must recover these additional expenditures in rates, ultimate power customers will see rate increases at a time when many are facing the economic impacts of the coronavirus emergency, including reduced electricity load.

APPA has sought to ensure that emergency funds provided to the PMAs, the Corps, and Bureau be on par with funding for other federal agencies.

However, the CARES Act does not explicitly state that funds provided under the bill may not be recovered in rates from customers of the Federal Power Program. APPA will continue to work to ensure that this issue is resolved in subsequent legislation.

Individual benefits

Individuals will also most likely receive stimulus under the CARES Act.

Individuals who make less than $75K a year individually or $150K as a couple and filed taxes in 2018, 2019, or have a Form SSA-1099 that the government can reference, will receive a payment in a few weeks. Parents will also receive $500 per child.

Social security beneficiaries are also eligible for the payment. Couples who file jointly will be eligible for up to $2,400. If a person’s income exceeds one of the income thresholds, the tax rebate will be $5 less for every additional $100 of taxable income.

Additional resources

APPA has done a great job monitoring federal legislation related to COVID-19 and informing lawmakers of how their decisions will affect public power utilities. They have a webpage updated daily with resources related to the pandemic.

Their government relations team is also hosting a free one-hour webinar this Friday on COVID-19-related legislation. I encourage you to check it out.

Heartland will also continue monitoring issues related to this pandemic. In this newsletter we are offering some graphics utilities can use to help promote small businesses in your community. It is important we continue supporting them as much as possible during this difficult time.

Although we have suspended travel, also know we are still working and here to answer your questions.

While we can’t visit your communities in person, we are still operating as usual and remain committed to providing the best service possible. We look forward to getting back out on the road to see you in person as soon as possible.