Important Information for PA-AWWA Members: COVID-19 and the Utility, Energy, Telecommunications & Transportation Sectors: What You Need to Know…Special thanks to: Michael D. Klein, Cozen O’Connor

Important Information for PA-AWWA Members: COVID-19 and the Utility, Energy, Telecommunications & Transportation Sectors: What You Need to Know

Special thanks to: Michael D. Klein, Cozen O’Connor

COVID-19 (coronavirus) continues to have an increasingly adverse impact on people and operations around the globe. The utility and energy industries are essential service providers. They must, for the health, safety, and economic vitality of the public and our nation, conduct their operations, regardless of crises, such as the coronavirus, without interruption, in a safe and reliable manner.

As the coronavirus spreads, it has become more challenging for the industry to do so. On the positive side, and at least for now, the public is not likely to get the coronavirus from those services being provided. For example, the U.S. EPA has preliminarily determined that the coronavirus has not been detected in drinking water, and based on current evidence, the risk to water supplies is low. As for wastewater, the World Health Organization has concluded that there is no evidence to date that the coronavirus has been transmitted by sewerage systems. U.S EPA has also determined that wastewater treatment plants treat viruses and other pathogens and that coronavirus is the type of virus that is particularly susceptible to disinfection. On the negative side, the industry can be adversely impacted by business interruptions, revenue declines, expense increases, employee absenteeism, supply chain disruptions, quarantines, mass cancellations and third party claims.

Also, during all of this, companies and organizations must remain compliant with regulatory requirements and operate under existing permits and approvals and continue to obtain many types of permits and approvals to maintain and expand operations. This will be very difficult due to regulators cutting back their own operations due to the coronavirus.

This Alert discusses what is happening in Pennsylvania and New Jersey. Please keep in mind, that the information provided herein is current as of the date of the Alert, and that information on the coronavirus crisis has been changing rapidly.

Public Utility Commission (PUC) — All offices of the PUC are currently closed, but employees are working remotely through at least March 27, 2020. All hearings have been cancelled through April 10, 2020, and no public input hearings are being scheduled at this time. The consumer hotline is still open but it has limited staff, resulting in longer than normal wait times. The PUC’s public meeting scheduled for March 26, 2020, will be held telephonically.

On March 13, 2020, PUC Chairman Gladys Brown Dutrielle signed an Emergency Order imposing a moratorium on terminations of electric, natural gas, water, wastewater, telecommunications, and steam service unless (a) the termination is required to ameliorate a safety emergency, or (b) the PUC determines that the termination is permissible. This moratorium took effect immediately and will remain in effect during the pendency of Governor Tom Wolf’s Proclamation of Disaster Emergency (up to June 4, 2020, unless renewed by the governor).

In addition, on March 16, 2020, Chairman Brown Dutrielle signed an Emergency Order imposing a moratorium on all door-to-door, in person, and public event sales activities by agents of electric and natural gas suppliers. This moratorium applies to all customer classes, not just residential customers. It took effect immediately and will remain in effect during the pendency of Governor Wolf’s Proclamation of Disaster Emergency.

On March 19, 2020, Governor Wolf issued an executive order for all “non-life-sustaining businesses” in the commonwealth to close their physical locations. Governor Wolf said that he will use all possible methods of enforcement — including citations, fines, cutting off state loans, loss of disaster relief, and license suspension. The order classifies utilities as “life-sustaining businesses” that are allowed to continue operations; however, the order classifies certain construction businesses, upon which utilities rely, as non-life-sustaining businesses. On March 20, 2020, the governor clarified that construction businesses may continue to provide “emergency services.” Based on this guidance, utilities can presumably rely upon construction businesses insofar as necessary to address emergency situations. Utilities with questions about whether they can continue to rely on certain construction contractors should email

[email protected]. Contractors seeking exemptions are encouraged to email [email protected].

On March 20, 2020, Chairman Brown Dutrielle signed an Emergency Order delegating authority to PUC bureau directors to extend or waive any regulatory, statutory, or procedural deadline. This may be done at the request of the parties or on the initiative of the bureau (subject to a right to appeal to the commissioners). The commissioners also reserved the right to waive a deadline sua sponte. This order applies during the pendency of Governor Wolf’s Proclamation of Disaster Emergency. During that period, deadlines generally will not be extended for more than 90 days, but after the disaster emergency expires, deadlines may be extended by an additional 30 days. This order also modified filing and service requirements in PUC proceedings.

On March 23, 2020, Governor Wolf issued “stay at home” orders for the following seven Pennsylvania counties: Allegheny, Bucks, Chester, Delaware, Monroe, Montgomery, and Philadelphia. Individuals residing in those counties are ordered to stay at home, except as needed to access, support, or provide life sustaining business, emergency, or government services. Under the order the following are among the entities that may continue physical operations: water, sewage, and other systems, natural gas distribution, electric power generation, transmission and distribution, telecommunications, and various forms of transportation. The policy took effect at 8:00 p.m. on Monday, March 23, 2020, for a period of two weeks, specifically until April 6, 2020.

Department of Environmental Protection (DEP) — DEP has announced that in order to prevent the further spread of the coronavirus all DEP offices will remain closed for at least the 14 days beginning March 17. DEP staff that is able to do so are teleworking. This includes reviewing permits, responding to complaints and environmental emergencies, and other work.

Environmental Hearing Board (EHB) — The EHB has announced that due to the closing of the Pennsylvania state government offices to mitigate the spread of the coronavirus, all offices of the EHB are closed until March 30, 2020. The EHB is continuing to operate remotely during this period. The EHB is encouraging the public to electronically file documents and, where possible, to refrain from mailing or faxing documents to the EHB’s Harrisburg office. Requests for extension or adjustments to scheduling may be filed with the EHB and will be addressed on a case-by-case basis.

Susquehanna River Basin Commission (SRBC) — SRBC employees are working from home. A limited number of staff in the Harrisburg offices are processing mail and accepting deliveries. The offices are closed to visitors until further notice. They are monitoring emails and voicemails. They will respond, but delays are expected.

Delaware River Basin Commission (DRBC) — The DRBC remains operational, but its West Trenton, N.J., office building is closed and staff are working remotely, until further notice.

ISSUES ABOUT WHICH TO BE THINKING

Should you issue customer educational materials about the impact of the COVID-19 pandemic?

• Topics could include assurances regarding the continuation of safe, adequate, and reliable service; payment arrangements; arrangements for in-home meter reads; social distancing with operations personnel; and general public safety tips on preventing the spread of COVID-19. As a public service by utilities, effective customer education may be viewed by regulators as good management when considering extra basis points for allowed return on equity.
• Due to increased use of sanitizing hand wipes and toilet paper shortages, wastewater system operators should consider educational materials about the threat to systems caused by flushing of non-degradable materials.

Have you made appropriate arrangements for social distancing for meter readers and operations personnel who must visit a customer’s home or business?

• Do such personnel have the appropriate protective gear (such as face masks and gloves)?
• Are shared equipment and facilities being deep-cleaned on a regular basis?

Have you inventoried your supplies (such as face masks) that may be of assistance to health care providers?

• The charitable donation of such items should be tracked because you may receive rate recovery.

Do you have warehouse or other facilities that could be used as mobile hospitals or drive-through COVID-19 test facilities?

Does your human resources team know how to react to and manage COVID-19 positive test situations?

Is your human resources team familiar with new paid leave, unemployment, and other employment requirements? Is overtime being appropriately tracked?

Has your information technology team taken the steps necessary to protect against cybersecurity threats associated with remote work?

• Is confidential information being transmitted to and from personal devices that may not be secure?

Have you reviewed and updated your business continuity plan in response to the current crisis?

Have you informed your operations personnel of the requirement, in Pennsylvania, to prioritize service to Priority One customers (such as hospitals and nursing homes)?

Have you appropriately coordinated with and provided updated contact information (including work-from-home information) to state and federal authorities, including regulators and emergency management agencies?

• Have you provided work-from-home contact information to your key service providers and vendors?

Do you have, for Pennsylvania compliance purposes, the necessary affiliated interest agreements in place for shared services and the fair cost allocation thereof?

If you have not already, should you enter into mutual aid agreements with neighboring operators to ensure continued operations in the event that key personnel become ill or quarantined?

• We have been assisting PAWARN, to help facilitate this in Pennsylvania.
• Mutual aid agreements can make needed resources available and avoid future disputes regarding the costs of shared resources.

How will the economic downturn impact consumption levels and revenue projections for ratemaking test year purposes?

• Is your company properly tracking extraordinary and non-recurring expenses related to the COVID-19 crisis for possible deferred regulatory accounting treatment and ratemaking purposes?
• How will recent federal and state legislation impact test year claims for ratemaking purposes?

Do you need to request extensions or waivers for reporting requirements (such as annual reports and quarterly earnings reports)?

How will the government-mandated shut down of non-essential businesses affect your supply chain?

• Do you need to adjust your just-in-time procurement processes to account for supply lags?

How has the government-mandated shut down of non-emergency construction services impacted your infrastructure repair and replacement program?

• Do you need to amend your long-term infrastructure improvement plan to account for the slow-down or temporary cessation of construction activity?

Is your company eligible for grants or loans under federal and state economic stimulus legislation?

Have you and your contractors considered and appropriately documented whether new service connections qualify as emergency construction that is exempt from government shutdown mandates?

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