Food or power: Energy bill late fees force tough choices

Chris Kinney, a resident of Rapides Parish in central Louisiana, has seen his electricity disconnected eight times in nearly three years for falling behind on his energy bills to Cleco Power.

His family did everything they could think of to catch up: pawning possessions, accumulating vast bank overdraft fees, borrowing money and applying for assistance.

Somehow, Kinney’s outstanding balance kept growing. While his electrical charges added up to about $6,400 from May 2019 through the end of 2021, Cleco Power also billed him over $1,250 for being late on paying his bills, including late fees, reconnection charges and deposits.

“These charges keep piling up and there is no way to catch up. The financial strain was just insane,” Kinney said.

Americans paid a combined $561 million in late payment fees to electrical utilities in 2019.

But how much you pay depends on where you live.

An AP analysis of federal regulatory data found that several major utility companies in states like Louisiana, Mississippi, Kentucky, Florida and Maryland are charging customers late fees that are much higher than the national average.

Five power companies — Cleco Power, Kentucky Power Co. and three subsidiaries of Entergy Corp. — averaged more than $17.50 per customer in annual late fee revenues between 2011 and 2020. That’s three times the national average of $5.83 per customer in the same time.

The fees account for a small part of major energy companies’ overall revenue — less than one-quarter of a percent on average — but for the people who must pay them, they can be crushing.

Late fees typically punish customers who are least able to afford their utility bill to begin with. Poorly insulated homes and damage from natural disasters all contribute to poor residents spending larger portions of their paychecks on their energy bills. And Black and Hispanic households are more likely to experience energy insecurity and utility disconnections.

For those who fall behind, it often means choosing between paying for power and affording other necessities.

Mary Boyd, who is 83 and lives in New Orleans, said her expensive energy utility bills from Entergy — a major utility provider in Louisiana and three other Southern states — caused her to choose between medication, and other expenses such as repairing the damage to her fence caused by Hurricane Ida.