FRANKFORT, Ky. — Three representatives from the municipal utility industry informed lawmakers Tuesday on how the COVID-19 pandemic is affecting local power, water, sewer, internet and telecommunication providers.
The representatives said action from the Kentucky General Assembly may be needed in the 2022 legislative session to help municipal utility companies combat workforce and infrastructure issues, among others.
Gary Larimore, executive director of the Kentucky Rural Water Association, told the Interim Joint Committee on Local Government his top legislative priority would be state financial incentives for employers that expand water and wastewater apprenticeships.
“We do have workforce issues, and we do need more qualified people,” he said.
Sen. Phillip Wheeler, R-Pikeville, asked what the legislature can do to support rural areas in providing water and wastewater services.
While the legislature recently allocated millions toward increasing access to clean water, Larimore said outdated infrastructure needs to be replaced in many areas, even in water districts with infrastructure that is only 50 years old.
Workforce and infrastructure issues are not the only problems facing municipal utility companies. Many are facing financial issues. Larimore used a water district covering three Kentucky counties as an example.
The Warren, Butler and Simpson County Water District saw net income decrease by 35% during the 2020 calendar year, Larimore said.
A reduction of customer usage has played a major role. So has lost revenue from a moratorium on late fees and service suspensions during the early months of the pandemic, when many people were out of work, Larimore added.
“That left us with over $660,000 worth of delinquent electric and internet bills,” said Jeff Hurd, general manager of the Hopkinsville Electric System (HES) and president of the Kentucky Municipal Utilities Association.
Municipal utilities have been working to recuperate some of the lost revenue related to late fees. However, it is unlikely every customer will be able to pay off their debt, despite financial assistance being offered to customers, officials reported.
For HES, only 84% of customers with delinquent bills completed their six-month repayment plan, Hurd said. He also estimates HES lost around $55,000 in late fee payment revenue.
The cause for reduction of customer usage varies, Larimore said. Some areas have been monitoring a predicted decrease in population but the pandemic did exacerbate the issue.
Chase Azevedo, general manager of Georgetown Municipal Utilities, said the industry is also having supply chain and inflation issues. Chemicals to treat wastewater are in short supply, and prices of certain essential materials continue to fluctuate.
“Obviously this is all going to impact rates,” Larimore said. “Water rates are going to go up. That’s just inevitable.”
The next Interim Joint Committee on Local Government Meeting will be Oct. 19.