Thousands of Richmond families could lose water service, sewerage and/or natural gas service in the coming months for failing to pay their bills.

The Department of Public Utilities has indicated that it will restart disconnections “this spring” for households who have run up bills and not take advantage of repayment options, although it has remained deliberately vague about the timing.

The plan to resume disconnections is included in the department’s response to a new audit that City Auditor Louis Lassiter has released on DPU’s payments and collections. To read DPU’s full Feb. 28 billing and collections audit, please visit: http://rvagov.prod.acquia-sites.com/sites/default/files/2023-03/2023-09%20DPU%20Billing%20 and%20Collections%20audit%202.28.23.pdf

It is not clear how many households might be affected, but a report the department issued last summer to City Council indicated that as many as 6,300 households could be affected, or about 9 percent of the 66,500 DPU customers who have city water service.

DPU stopped disconnecting in March 2020 after the pandemic hit to help people stay in their homes, the audit noted, and also stopped referring unpaid bills to a collection agency.

According to the audit, DPU has seen rapid growth since in uncollected utility bills despite receiving federal assistance on behalf of customers.

The audit found that as of June 30, 2022, when the 2021-22 fiscal year ended, DPU reported $25.4 million in unpaid bills, including late fees, that were overdue 90 or more days, or nearly six times the 2016-2017 level when DPU reported $4.53 million in bills that were unpaid for 90 days or more when it closed the books that year.

In the 2019-20 fiscal year, when disconnections were suspended, utility bills that were 90 or more days past due jumped to more than $12 million, and the total of unpaid bills has grown each year since then.

Plenty of customers do pay. For fiscal 2021-22, DPU reported collecting $345.9 million from its three biggest utilities, with about $153 million being paid for water and wastewater treatment services, and the remainder, about $192 million, coming from the sale of natural gas.

Still, the $25.4 million in unpaid bills amounts to 7 percent of DPU’s current revenue.

The audit reported a total of $60 million was owed to DPU in unpaid bills as of June 30 when the fiscal books closed on 2021-22, but 41 percent of that money, about $25 million, involved customers who are listed as current and whose most recent payments apparently had not yet been received or recorded.

The remaining 59 percent of the money was recorded as past due for at least 30 days, with the lion’s share of the money owed to DPU being bills that had been unpaid for three months or longer.

The audit also found that DPU is billing based on estimated use of water and service for an increasing share of city customers.

Mr. Lassiter’s team found DPU had boosted estimating, particularly for water usage, because meters with radio transmitters are wearing out after 10 years of service and are not being replaced in a systematic way. The transmitters are only supposed to last 10 years, the audit noted.

The audit found service orders keep piling up from customers who find the billed estimates overstate usage.

The audit found that DPU had a backlog of 42,000 service orders as of June 30 relating to gas and water after closing about 4,700 during the 2021-22 fiscal year.

In its response, DPU stated that it has begun planning a meter replacement initiative.