State Treasurer Dale Folwell is demanding Gov. Roy Cooper waive executive orders that ban citizen-owned utilities from charging customers for services. Folwell plans to put the issue to a vote at the next Council of State meeting July 7.
Folwell’s move came as Cooper let Elizabeth City — facing bankruptcy — charge for utilities.
When the COVID-19 pandemic left more than 1 million North Carolinians out of work, Cooper banned utility providers from disconnecting or fining non-paying customers. He blocked people from losing water, electricity, natural gas, sanitation, or wastewater services through the end of July.
Elizabeth City officials applied for a waiver, waited two weeks, and decided they couldn’t wait any longer. They would charge for utilities, beginning Wednesday, July 1. Folwell supported the decision.
But just hours after the release dropped, the state granted the city a waiver.
Folwell blasted the timing.
“This waiver was granted only after the city said they could no longer make the choice between the governor’s order and potential bankruptcy,” Folwell told Carolina Journal. “Our local elected officials should not be put in a situation where they’re forced to go bankrupt or defy the governor’s order. But that’s exactly the position they were put in.”
Folwell says local government leaders know their communities, and the orders have unintended consequences.
In North Carolina, 13.7% of customers stopped paying utility bills. Utility providers racked up $252 million in late payments, and in April and May, 884,088 households faced disconnection.
In Elizabeth City, the numbers were worse. Some 30% of customers weren’t paying their utility bills. Without a waiver, the city would go broke in the fall, and its customers would pay a 10% to 46% hike in electric rates, Richard Olson, Elizabeth City city manager, told CJ.
“We’re heading in the right direction,” Olson said. “We have a financial crisis looming, 30-45 days out. And unfortunately, it’s not something that corrects itself overnight.”
The waiver will help the city avoid bankruptcy. But it won’t solve its financial woes. The city will dip below its minimum fund balance in July — a red flag that will place it on the Local Government Commission’s watchlist of cities at risk for insolvency.
Folwell worries Elizabeth City won’t be the only local government to join the watchlist. The crisis could force the state to take over the finances of many troubled governments, Folwell said.
“I’m trying to flatten the economic curve that’s affecting rural N.C.,” Folwell said.