Crushing utility debt is the pandemic’s next crisis
The National Energy Directors’ Association estimates that by March, as a result of the COVID -19 pandemic, ratepayers nationwide could owe $35 billion to $40 billion to their utilities.
Here in New York, Central Hudson Gas & Electric Corporation is one of several utilities currently engaged in rate cases that will decide whether the amount they propose to charge their customers for delivering energy and keeping the lights on is “fair and reasonable.” In response to a query from Citizens for Local Power, which is a party to the rate case, Central Hudson provided details that flesh out the national numbers.
Central Hudson reported on Nov. 30 that between February and October last year, the number of its residential customers who were 60 or 90 days in arrears had increased by 29 percent and 47 percent, respectively. Altogether, 40,734 customers with at least 60 days of arrears owed more than $24 million – almost double what 31,559 such customers owed only eight months before.
Businesses, it turns out, are even more hard hit. Between February and October, the number of businesses over 90 days in arrears increased 189 percent. A three-year comparison provided by Central Hudson sheds an even harsher light on the situation. In August 2017, 853 businesses were at least 90 days behind on their bills; three years later, in August 2020, the number had climbed to 2,113, while the amount they owed ballooned from $341,760 to $2.2 million – an unimaginable 552 percent increase. Over the same period, the amount owed by businesses more than 60 days in arrears jumped 429 percent, from about $1 million to almost $5.4 million. Since the reports were compiled, these numbers have no doubt continued to grow, and the increases are unlikely to abate until the pandemic does.
For now, utility customers are protected by the moratorium on shutoffs that New York imposed on March 22. When the moratorium ends, no later — by law — than March 31, 2021, what will happen? What will tens of thousands of residential customers and thousands of businesses do,
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