Who will pay $40B in COVID-19 debt owed to utility companies?

 

• Utility companies (NYSEARCA:XLU) across the U.S. have allowed COVID-affected residential and small business customers to defer paying their power bills without the threat of losing service, but any economic recovery will be weighed by potentially huge debts to utilities - debts that have yet to be addressed anywhere.
• Residential and small business customers could owe as much as $40B to their utilities by next March, and state regulators still must decide whether the indebted customers, all utility customers, investors, taxpayers - or some combination of those groups - should pay, UtilityDive.com reports.
• As an example, Duke Energy expects COVID-reduced load, along with diminished revenues from waived payments and fees to lead to $0.25-$0.35 in reduced earnings per share for 2020, which equates to estimated losses of $180M-$260M.
• Day-to-day system needs are being met, but longer-term "accessibility or reliability of service" could be hurt by investments deferred to meet "more pressing near-term cash flow issues," says University of Florida Public Utility Research Center Director of Energy Studies Theodore Kury.
• ETFs: XLU, UTG, VPU, BUI, GUT, FUTY, IDU, RYU, FXU, UPW
• Potentially relevant company tickers include NEE, DUK, SO, D, AEP, EXC, SRE, XEL, WEC, PEG, ES, AWK, ED, PCG, DTE, EIX, PPL, ETR, AEE, CMS, FE
• https://seekingalpha.com/news/3641605-who-will-pay-40b-in-covidminus-19-debt-owed-to-utility-companies