Deliquency COVID19 Impacts Week of Nov 5 2020- ECAC

COVID-19 Utility Delinquency Update ECAC

Belen Valenzuela Chief Financial Officer November 16, 2020

www.iid.com COVID-19 Response • On March 17, 2020, there was a temporary suspension of disconnect for non-payment • Customer notices, calls, emails and all other district communications updated . “Due to COVID-19, customer disconnects for non-payment are temporarily suspended.” • Payment deferrals and payment plans for residential/commercial accounts • Flexibility with security deposits for new accounts • Promotion of IID Payment Assistance programs • Promotion of federally funded Low-Income Home Energy Assistance Program (LIHEAP) administered by counties and non-profits • Average Bill Pay customers allowed to use credit to pay past due balances

www.iid.com 2 IID Debt History

November is at $9.3 million as of the first week of the month.

www.iid.com 3 Delinquency History

1.There are over 20,000 residential bills that are 31+ delinquent. 2. There are over 1,300 commercial bills that are 31+ delinquent. 3. Through the first week of November, IID has $9.3M in delinquent accounts.  Overall delinquencies continue to grow monthly to approximately $9.3 million www.iid.com 4 Accounts Ready for Disconnect Month No Of CA March 1,585 April 2,121 May 2,895 June 3,004 July 3,349 Aug 4,393 Sep 6,418 Oct 7,970 5-Nov 8,703

 There is a 498% increase in the number of accounts ready for disconnect since March of 2020

www.iid.com 5 2019-2020 Comparable Disconnect

DONP No. AUG Delinquency $ Accounts 2020 4393 $ 1,600,346 $4,295,480 2019 2171 $ 692,731 $3,739,019 DONP No. SEP Delinquency $ Accounts 2020 6418 $ 2,712,724 $2,712,724 2019 1952 $ 575,456

DONP No. OCT Delinquency $ Accounts $1,600,346 2020 7970 $ 3,856,253 2019 3635 $ 989,568 $767,737 $692,731 $575,456 DONP No. $445,907 NOV Delinquency $ Accounts 2020 8703 $ 4,295,480 2019 1456 $ 445,907 2020 2019 Sept 2020 2019 Oct 2020 2019 Nov 2020 2019

Imperial Valley 46% Coachella Valley 54% Indio and Calexico have the highest delinquency www.iid.com SAMPLE OF RESIDENTIAL ACCOUNT -DISCONNECT LIST

91 or More 31 to 60 Day 61 to 90 Day Total Day Area Delinquencies Delinquencies Delinquencies Delinquencies Customer Type RESIDENTIAL CUSTOMER $ 2,332.52 $ - $ 5,122.82 $ 7,455.34 LaQuinta RESIDENTIAL CUSTOMER 1,242.31 1,381.59 3,706.75 6,330.65 Imperial RESIDENTIAL CUSTOMER 1,098.17 1,023.03 3,361.52 5,482.72 LaQuinta RESIDENTIAL CUSTOMER 314.00 - 5,034.77 5,348.77 LaQuinta RESIDENTIAL CUSTOMER 1,046.41 1,627.74 2,377.28 5,051.43 LaQuinta RESIDENTIAL CUSTOMER 1,749.82 1,779.26 1,396.36 4,925.44 Imperial RESIDENTIAL CUSTOMER 264.17 279.40 4,078.72 4,622.29 Imperial RESIDENTIAL CUSTOMER 910.78 1,237.20 2,342.14 4,490.12 Imperial RESIDENTIAL CUSTOMER 513.18 592.25 3,349.14 4,454.57 LaQuinta RESIDENTIAL CUSTOMER 588.97 712.22 2,847.90 4,149.09 Imperial RESIDENTIAL CUSTOMER 776.24 747.47 2,248.43 3,772.14 Imperial RESIDENTIAL CUSTOMER 793.02 738.88 2,132.29 3,664.19 LaQuinta RESIDENTIAL CUSTOMER 810.38 795.96 1,946.82 3,553.16 LaQuinta RESIDENTIAL CUSTOMER - - 3,530.86 3,530.86 LaQuinta RESIDENTIAL CUSTOMER 980.92 841.81 1,700.57 3,523.30 LaQuinta

www.iid.com 7 SAMPLE OF COMMERCIAL ACCOUNT -DISCONNECT LIST

Same Customer 31 to 60 Day 61 to 90 Day 91 or More Day Total Area Several Delinquencies Delinquencies Delinquencies Delinquencies Type of Business Accounts COUNTRY CLUB $ 48.65 $ 24.76 $ 213.59 $ 287.00 Imperial $ 57,943.68 SOLE PROPRIETOR 934.27 863.13 716.27 2,513.67 Laquinta 8,447.55 ICE CREAM 361.12 359.05 1,248.36 1,968.53 Imperial 9,365.90 PRODUCE 1,406.46 1,261.51 1,317.01 3,984.98 Imperial 8,290.34 WIRELESS COMPANY 210.28 197.20 331.43 738.91 Imperial 1,562.42 CLOTHING STORE 426.11 382.14 2,592.07 3,400.32 Imperial 6,827.61 ENERGY EFFICIENCY CONTRACTOR 38.04 38.05 277.50 353.59 Imperial 796.18 TRUCKING COMPANY 1,078.77 838.56 2,827.42 4,744.75 Laquinta 42,751.39 BREWING COMPANY LLC 17.28 24.38 257.72 299.38 Imperial 5,596.54 PHARMACY 710.42 608.58 1,481.91 2,800.91 Laquinta 6,858.35 PRODUCE COOLER 4,632.11 - 9,501.43 14,133.54 Imperial 63,580.09 GOLF CLUB 47.76 - 23.92 71.68 Laquinta 22,291.07 PRODUCE 338.81 313.05 222.31 874.17 Imperial 5,066.81 CANIBUS DISTRIBUTOR 91.49 91.57 550.53 733.59 Imperial 7,766.34 DRY CLEANING 118.59 116.24 - 234.83 Imperial 2,325.00

www.iid.com 8 Customer Outreach

• GM letter to customers on IID COVID-19 response actions • COVID-19 messages in monthly Circuit newsletters • Radio • KXO AM & FM • KMXX-FM • KSEH-FM, KUNA • Marker Broadcasting • Alpha Media (8 stations) • Cable and Streaming Television • NPG Yuma: Fox 9, ABC 5 • KSWT/KYMA: CBS 13, NBC 11 • KESQ: News channel 3 • KMIR: NBC 6 • Spectrum Reach - cable and streaming

www.iid.com 9 Customer Service Actions • All customer communications focused message on encouraging payment plan enrollment • Promotion of low-income assistance programs administered by the district and by partner organizations • Coordination with counties, cities, school districts, nonprofit organizations and other partners to augment customer communications (promoting and communicating LIHEAP) • IVR (automated phone system) modified for partial payments • Customer web portal and mobile app modified for partial payments • Approval of transfer $2 million from Public Benefits programs to Payment Assistance programs

www.iid.com 10 Customer Outreach

• Customer Service Representatives at call center and pay stations provide all available resources and programs to assist with past due bills • Outbound customer calls to promote payment assistance programs and payment plans • Outbound customers calls for those on DONP list

www.iid.com 11 Customer Assistance Program Comparison

Low Income Participation

14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 REAP Average Participation EEAP Total PLEDGES MEEUAP Average Participation

2019 2020

 Increase in income assistance programs not as high as expected: EEAP increase of 14% REAP increase of 6% MEEUAPs increase of 21% www.iid.com LIHEAP Low Income Housing Energy Assistance Program

2019 2020

Quarter #Referrals Pledge Value $ Quarter #Referrals Pledge Value $ 1Q2019 429 $156,782 1Q2020 406 $167,471 2Q2019 258 $88,577 2Q2020 203 $69,081 3Q2019 654 $229,541 3Q2020 250 $97,797 October 343 $131,091 October 209 $96,103 Totals 1,684 $605,991 Totals 1,068 $430,452

 Not seeing the usage of funds as expected. LIHEAP pledges are 37% lower than last year

www.iid.com Bankruptcies

Yearly Comparison on Bankruptcy Debt under bankruptcy 140 filings Residential $ 5,432.00 120

Commercial $ 203,235.00 100

Total $ 208,667.00 80

60 Year No of bankruptcies 40 2017 66 2018 40 20 2019 42 0 2017 2018 2019 2020 2020 116

 Bankruptcies continue to increase by 176%  CBL & associates filed bankruptcy on November 2, 2020. Total estimated debt under CBL & Ass. bankruptcy is $119,105 covering 7 accounts  TTBGM, Inc. seven accounts converted from bankruptcy chapter 11 to chapter 7

www.iid.com Financial Impact • Cash flow negatively impacted . Customer delinquencies make up approximately $9 million of unpaid power bills . 498% increase of customers on the disconnect list compared to same time last year . 176% increase in customer bankruptcies compared to same time last year

www.iid.com 15 Operational Impact Resulting in Abuse

 Accounts with deceased customers or new occupants not updating accounts  Possible squatters on accounts. Vacant premises being adopted by unknown tenants  Real Estate changes on accounts not being reported For billing and collections purposes accounts with meter running, no business partner situations where the district does not have an identified customer to take ownership of the electric account and the associated financial obligation. Failure to complete application and consume energy on an account where customer is deceased and or vacated premise falls under fraud.  Customers under Net Metering accounts are not paying at settlement month  Customers under budget billing accounts are not paying at settlement month

www.iid.com 16 Proposal to Suspend DONP Moratorium • Reinstate DONP process effective January 4, 2021  Life support and MEEUAP will not be disconnected for non payment  Nov 2020 - Send out communication that “IID will be reinstating DONP process so please bring account current or call to make payment arrangements” via notices  Dec 2020 - Send out customer specific DONP messages, dunning notices and emails  Jan 4, 2021 - Commence DONP • It will take an average of 4-5 months to complete DONP list • Effective immediately  Reinstate filing of liens effective immediately ~ seeing an increase in real estate sales  DONP locations with fraud, squatters, and lack of application (deceased) • Failure to complete application and consume energy on an account where customer is deceased and or vacated premise falls under fraud