Virus’ impact: Utility bills overwhelm households
SAN RAMON, CALIF. — Millions of U.S. households are facing heavy past-due utility bills, which have escalated in the year since the pandemic forced Americans hunkered down at home to consume more power.
And now, government moratoriums that for months had barred utilities from turning off the power of their delinquent customers are starting to expire in most states. As result, up to 37 million customers — representing nearly one-third of all households — will soon have to reckon with their overdue power bills at a time when many of them are struggling with lost jobs or income.
A study done by Arcadia, which runs a service that helps households lower utility bills, found that the average past-due amount by those in its network was roughly $850.
The crisis has emerged as one of the repercussions of the recession that was touched off by the viral pandemic. Though the economy has achieved considerable gains in recent months, about 9.5 million jobs remain lost. And many people have lost income even while remaining employed, leaving them unable to buy food, pay rent or afford utility bills.
President Joe Biden’s $1.9 trillion rescue aid package will provide some support. It includes $5 billion earmarked for people who need help with power and water bills. Combined with other government financing allotted for energy aid since the pandemic began, the total available to help struggling households pay utility bills is about $9.1 billion.
Mikel Haye lost his three part-time jobs after the pandemic struck. He scrambled to prioritize how to pay the bills.
But all that assistance represents just a fraction of the $27 billion in past-due balances of households, according to the National Energy Assistance Directors Association, which helps low-income consumers.
Caught in the squeeze are people like Mikel Haye, who was forced into performing a financial triage after he lost all three of his part-time jobs after the pandemic struck. Suddenly, he was scrambling to pay the bills on a Brooklyn apartment he shares with his unemployed mother and two brothers while deciding how to spend whatever money was left: For food? Car insurance? The phone bill?
The utility bill often went unpaid, leaving him at one point with a past-due balance of $500.
“We took a risk, thinking that hopefully they will extend more leniency when it came to paying that bill,” said Haye, 24.
In the end, things did work
out for him. With the help of the Bedford Stuyvesant organization, he managed to pay his electricity bill.
Officials at agencies involved in financial aid for energy customers say the problem has become an urgent one.
The National Energy Assistance Directors Association estimates that the total amount due has soared from roughly $11 billion, owed by nearly 20 million U.S. households at the end of 2019, to the more than $27 billion now.
Moratoriums on shutting off power for past-due bills had existed in at least 35 states at some point during the pandemic.
Compounding the problem, U.S. households have been using, on average, 10% more electricity during the pandemic lockdowns, which have kept them home more hours, with computers and other electronic devices, along with heat or air conditioning, swelling utility bills.