Covid-19 is projected to cost electric co-ops US$10bn in load loss and unpaid bills through 2022, warns NRECA, the national representative body for the sector.
A report from the organisation also warns that electric co-operative operating revenues are expected to decline by $7.4bn as electricity sales fall
by 5% over the 2020-2022 period, as national economic output declines.
And it says a surge in unemployment, combined with the effects of suspending disconnections, is expected to increase balances of unpaid bills to $2.6bn through 2022.
“Declining economic conditions fostered by social distancing practices to curb the spread of the virus have caused businesses to shut down and are pushing unemployment upwards, potentially to levels not seen since the Great Depression,” the report says.
“NRECA estimates that nearly 2.5 million jobs in electric co-op-served areas are in the most at-risk sectors of the economy, including the extraction, travel, transportation, employment services, and leisure & hospitality industries.”
Last month, NRECA chief executive Jim Matheson wrote to the federal government and Congress to recognise asking for federal aid for the sector.
“As the economic impact of this pandemic spreads, electric co-ops are being challenged like never before to keep the lights on for millions of essential service and frontline workers in hospitals, grocery stores, food production, critical infrastructure and families quarantined at home,” Mr Matheson wrote.
“Policymakers must act to address Covid-19’s financial threat to co-ops and rural communities and prevent significant disruptions.”
“As a result of nonpayments and load falloff resulting from economic hardship, some not-for-profit electric cooperatives are facing significant operational shortfalls. Without federal assistance, co-ops may face severe financial distress.”
NRECA is also asking lawmakers to include federal loan, broadband and disaster relief provisions in the next bill.