With the state facing a shortfall in energy assistance funds, Maryland’s electric and gas utilities have been ordered to give customers who’ve been denied help with bills additional notice before shutting off service for nonpayment.

The Maryland Public Service Commission is requiring utilities to give an additional 15 days notice on affected terminations through July 31. But the regulators stopped short of placing a moratorium on turn-offs as called for by the Office of People’s Counsel, which advocates for the state’s ratepayers.

In an order issued late Tuesday, the commission decided against a moratorium because most utilities have voluntarily halted disconnections for account holders denied assistance from two state utility programs. But commissioners strongly encouraged gas and electric companies to put terminations on hold through at least July 31.

Two federally funded programs run by the state Department of Human Services ran out of funds in April, the commission said in its order.

Since April 17, the Office of Home Energy Programs has denied applications to the Maryland Energy Assistance Program and the Gas Arrearage Retirement Assistance Program. Funds are unavailable at least through June 30, the end of the current fiscal year.

The state ran out of money after it received an unprecedented increase in applications in fiscal year 2023, combined with higher energy costs and budgetary constraints. Additionally, more people were eligible for grants under legislation passed in 2023. The programs are funded through a federal block grant, the Low-Income Home Energy Assistance Program.

The commission’s order was issued the same day the Office of People’s Counsel filed an emergency petition asking the commission to halt all power shut-offs until Sept. 15 because of extreme summer heat. The People’s Counsel asked the commission to waive fees and deposits for customers who had their power cut off but want to reconnect during the summer.  As an alternative to a full moratorium, the office recommended barring utilities from terminating service for non-payment unless doing so won’t threaten the occupants’ health.

The emergency petition was filed separately from the funding shortage case, and the commission is expected to issue a separate ruling.

The commission began seeking input on the utility bill assistance shortage and the potential need for a moratorium at the end of May and received feedback from utilities, consumer advocates and community resource organizations.

“The Commission recognizes that, while moratoriums on service terminations may be necessary, sometimes the potential negative consequences may outweigh the benefits,” the order said.

The Fuel Fund of Maryland told the commission that a moratorium — and a resulting accumulation of charges — can make it difficult for low-to-moderate-income households to catch up on overdue bills once the moratorium ends.

Utilities told the commission they were taking actions to protect affected customers, including halting service disconnections and collections and referring customers to other financial assistance programs.

BGE, which has its own bill management programs and has referred customers to others, said it has halted service disconnections for affected customers until July 15. Potomac Electric Power Company and Delmarva Power and Light also said they have put protections in place until July 15 to keep affected customers connected.

The commission adopted a recommendation from the Maryland Energy Assistance Program to have utilities add 15 days to termination notices sent to customers denied assistance between April 17 and June 30.

The Office of People’s Counsel had recommended a short-term moratorium on service disconnections, through July 15.

“Most of the utilities have agreed to hold off on terminating customers who have been determined eligible for the two programs, so we’re happy about that,” People’s Counsel David S. Lapp said. “We’re hoping to get some insight as to when the federal funds will arrive and be distributed to qualifying customers.”

The order requires the state Department of Human Services to report back to the commission on the status of the energy assistance programs’ long-term funding and timing of future distribution of funds, for instance whether a delay is expected after the state’s fiscal year begins July 1

Under the order, utilities are required to give the commission a status report within 30 days confirming the additional notice time as well as efforts to lock accounts and halt disconnections for the affected group of customers.