BRISTOL, Va. — BVU Authority sold significantly less electricity due to the COVID-19-sparked economic downturn, but Friday its board approved a fiscal 2020-21 budget with no rate increases.
The authority board finalized a $44.32 million electric division spending plan plus $4.52 million wastewater and $3.63 million water division budgets during its regular monthly meeting. Consumer rates won’t rise for any authority service.
“We have definitely seen reductions in electric sales,” President and CEO Don Bowman said after the meeting. “Things are partially returning to normal as the economy reopens. We did not plan for a second shutdown, a second wave, and we certainly hope we don’t have one.”
BVU’s power consumption declined between 15% and 20% in April as businesses and plants shut down, Cinemark Tinseltown cinemas closed and restaurants shuttered or greatly curtailed services, Bowman said. Usage has increased but not to June 2019 levels.
Since demand declined, BVU was able to save money by buying less power from the Tennessee Valley Authority.
The authority reduced electric rates five times since 2017, including twice in 2020, despite losing major employers and power users including Alpha Natural Resources, Ball Corp., Bristol Compressors and Sandvik. All shuttered facilities in recent years.
“If you look at just kilowatt-hour sales and normalize that over the economic impact of plant closures — just through the rate cuts — we’ve cut out almost $11 million worth of revenue,” said Chris Hall, BVU’s key accounts, rates and contracts manager.
BVU hasn’t had any layoffs or furloughs since the pandemic began in March, Bowman said.
“We haven’t needed to,” Bowman said. “We were ahead of budget when we came into this [pandemic]. That’s a lot better than being behind. Customer service department volume picked up, but our meter reading volume has gone down. But we still send people bills so we have to check the meter, validate the meter and check with customers. Disconnection has gone to zero.”
Gov. Ralph Northam declared a state of emergency in Virginia on March 13, and the State Corporation Commission directed utilities to not disconnect customers for failure to pay bills or charge late fees under the declaration. It was to expire June 10 but has now been extended indefinitely, and the prohibition on disconnecting service remains in place until Aug. 31.
BVU has “some” customers with past due balances, Hall said.
“When people see you’re not disconnecting, even at the governor’s level, you still owe for the service — whether we can collect or not,” Bowman said. “I’m glad we’re in a fortunate position where we can help people and extend payment terms. People don’t need more stress right now.”
The SCC warned last month the prohibitions weren’t sustainable indefinitely because it could cause people to run up bills they can’t pay and cause serious financial harm to smaller utility providers.
The board did approve $5 increases in the fees BVU charges to activate or reconnect service. It also raised the fee for “tampering” with electric meters from $300 to $500.
Sewer system improvements
The board heard an update on a $6.2 million sewer system improvement project that was delayed by record spring rains.
“We’re about three weeks behind on Valley Drive but they [contractor] just brought a second crew in so I think we’re going to come in around Sept. 30,” Bowman said. “Our principle focus now is to get Valley Drive done before the school year starts and high school resumes in August.”
Work on Meadow Drive is about halfway complete and other segments are scheduled to begin after work on Valley Drive is done, Bowman said. Most of the work along Commonwealth Avenue is done but work remains near the railroad trestle, beneath Randolph Street and near the Ollie’s store.
In other action, the board voted to retain member Gary Bagnall for a second four-year term. The board was completely reconfigured by state lawmakers in 2016 after BVU emerged from a nearly three-year federal criminal investigation that sent 10 former executives, board members and contractors to prison.