Households face hefty utility bills
Some consumers months behind as moratoriums are ending
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 owed 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 made 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, enacted into law this month, 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.
But all that assistance represents just a fraction of the $27 billion in past-due balances of U.S. households, according to the National Energy Assistance Directors Association, which helps lowincome consumers. The aid will be distributed through the Low Income Home Energy Assistance Program.
Moratoriums on shutting
off power for past-due households had existed in at least 35 states at some point during the pandemic.
In response, some struggling consumers chose to funnel their money toward housing, food and other obligations because they knew they wouldn’t lose their electricity or natural gas even if they skipped their utility payments.
Some customers now facing outsize utility bills might have been lulled into the belief that they wouldn’t have to pay for many additional months.
“There’s a moratorium,” said Tracey Capers, executive vice president of Bedford Stuyvesant Restoration Corp., a Brooklyn nonprofit that offers financial aid and counseling. “It doesn’t mean you never have to pay. That’s the concern that we have for people.”
FINANCIAL TRIAGE
Among them is Mikel Haye, who was forced into performing a financial triage after he lost his three parttime 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.
Compounding the problem, American households have been using, on average, 10% more electricity while spending more time at home during the pandemic lockdowns, with computers and other electronic devices, along with heat or air conditioning, swelling utility bills.
Now, the power-shutoff moratoriums are beginning to lift, forcing customers to reckon with their piled-up bills. More than 30 states — including New York, Pennsylvania, Michigan and Wisconsin — are ending moratoriums in this month and April, according to the National Energy Assistance Directors Association. California and New Jersey will do so at the end of June.
Officials at agencies involved in financial aid for energy customers say the problem has become an urgent one.
“We have never had debts of this size before,” said Mark Wolfe, executive director for the National Energy Assistance Directors Association, which 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.
AVERAGE $850 DEBT
Those findings mirror the study of electricity bills in 13 states and the District of Columbia by Arcadia, which helps households find renewable energy sources to lower their utility costs. It found that one-quarter of the households belonging to Arcadia’s network in those states had past-due balances on their electricity bills as of January, with the average amount owed nearly $850 — a 67% jump from the end of 2019.
Even bigger past-due bills have been emerging in New Jersey, said Kathy Kerr, director of utility assistance for the Affordable Housing Alliance.
“People are at a crossroads,” Kerr said. “Do I pay rent? Do I pay bills?”