State Approves $1 Billion in Benefits to Reduce Past Due Energy Bills Accrued During the Pandemic
Eligible
customers currently receiving bill credits. Over 1.5 million customers to
benefit.
February 10, 2022
The California Department of Community Services and Development (CSD) today announced the final approval of $1 billion in California Arrearage Payment Program (CAPP) benefits for overdue energy bills incurred by Californians during the COVID-19 pandemic. Under CAPP, the State of California is directing $1 billion in American Rescue Plan Act funding towards benefits that will reduce or eliminate past due energy bill balances incurred by customers economically impacted by the pandemic.
“Californians that struggled to afford the cost of energy during the pandemic will now see critical relief thanks to the state’s efforts to mitigate the economic impacts of COVID-19,” said CSD Director David Scribner. “By addressing the historic levels of energy bill debt that accrued during the pandemic, we’re giving affected Californians the financial opportunity to prioritize other basic needs.”
Over 1.5 million energy utility customers that are eligible for a CAPP benefit are estimated to receive a credit on their energy bill to reduce or eliminate past due charges incurred during the pandemic relief period. Customers do not need to apply to receive a CAPP benefit. If a customer account qualified for a CAPP bill credit, it will be automatically applied to the customer's bill by their energy utility. Energy
utilities began applying CAPP benefits to qualified customer accounts on a
rolling basis in December 2021. Utilities must apply CAPP benefits to customer accounts within 60 days of receiving CAPP funds. Customers with questions about CAPP should contact their energy utility.
“The state continues to make bold investments to ensure that all Californians benefit from our recovery from the COVID-19 pandemic,” said California Health and Human Services Agency Secretary Dr. Mark Ghaly. “The approval of $1 billion in bill credits to address energy debt accrued during the pandemic is another example of California’s commitment to a broad, equitable, and robust recovery for all.”
Established by Governor Gavin Newsom and the California Legislature, CAPP dedicates $1 billion in federal American Rescue Plan Act funding to reduce past due energy bill balances incurred by customers during the COVID-19 pandemic. Customer utility bills that are 60 days or more past due for energy use during the pandemic relief period from March 4, 2020 through June 15, 2021 qualify for relief under CAPP. Under CAPP, available funding is first targeted towards addressing past due energy bill balances accrued during the relief period by active residential customers at risk of disconnection, followed by active residential customers with past due balances, inactive residential customers with past due balances, and finally commercial customers with past due balances. CAPP
funding was disbursed to energy utilities on schedule by January 31, 2022.
With the passage of Senate Bill 113, California has also acted to ensure that CAPP benefits will not result in tax liability for recipients, nor impact their eligibility for any public benefits. This action follows the release of federal guidance from the Internal Revenue Service in November 2021 that CAPP benefits received by individuals are not taxable.
Forty-four California energy utilities applied for CAPP funding on behalf of their customers. A summary of arrearages, allocations, and the number of customers receiving a benefit by participating energy utility can found here. A more detailed breakdown of arrearages, allocations, and customers benefiting from CAPP is available on the CAPP Data Dashboard.
According to the results of the CAPP Energy Utility Survey which calculated total statewide energy bill arrearages (as of September 2021) to establish CAPP allocations for energy utilities, over 3 million customers statewide accrued almost $2 billion in energy utility debt during the pandemic relief period. CAPP funds will offset nearly 50 percent of qualifying statewide energy bill arrearages reported in the survey.
For additional information about the CAPP program, visit https://www.csd.ca.gov/Pages/CAPP.aspx.