Report: Millions couldn’t pay energy bills last winter

More Americans had trouble paying for their utilities last winter despite heating costs dropping to pre-pandemic levels, potentially pointing to a hot and deadly summer for millions of consumers, said the nonprofit National Energy Assistance Directors Association.

The average cost of home heating was $836, down from $978 in the prior year and $849 in 2020, said the association, which represents state directors of the Low Income Home Energy Assistance Program.

Yet more than 1 in 6 households, 21 million, are already behind on their energy bills, the association said. The national average balance rose to a record $20.3 billion in December from $17.7 billion at the start of 2023.

The Household Pulse Survey showed that in March, 19.2% of all families couldn’t pay at least one home energy bill in the last 12 months, up from 16.5% in the prior-year period.

The percentage of families with children who struggled to pay their energy bills also jumped, to 25.6% from 20.4% a year ago.

It could get worse this summer, said Mark Wolfe, NEADA executive director: “Unlike the price of winter heating, the cost of summer cooling is going up due to the unprecedented rising of summer temperatures.”

Also, the price of oil, which can influence the price of electricity, recently cracked $85 per barrel, reaching the highest level since October amid Mideast tensions. JP Morgan analysts expect oil to hover near $90 by May but acknowledged there’s a risk that prices will head near $100 by September.

Extreme heat causes more deaths each year than any other weather event, including floods, hurricanes and tornadoes, according to the National Weather Service.

One cause of the energy bill defaults: The loss of pandemic-era programs, including the enhanced child tax credit, boosted the number of people struggling to pay even those smaller energy bills, Wolfe said.

The enhanced child tax credit increased the maximum credit to $3,000 per qualifying child between ages 6 and 17, and $3,600 per qualifying child younger than 6.

Congress needs to provide additional funding to the Low Income Home Energy Assistance Program which helps eligible low-income households pay for home energy services, Wolfe said. Lawmakers have allocated $4.1billion for fiscal year 2024, $2 billion less than the prior year.

“With the reduction in funds (states) will have to scale back not only average grants, crisis assistance and weatherization, but they will also have to scale back or eliminate entirely their cooling programs,” Wolfe said. He estimates up to 1.5 million families could get cut.

In addition, if the Senate can approve the new child tax credit encased in the tax bill the House of Representatives passed in January, people may be able to get more money in their pockets, possibly this summer, to help pay their bills.

The Senate doesn’t return to work until Monday and the tax season ends April 15, so lawmakers would have to act quickly to approve it.