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This story is part of TRACE (Toward Response and Community Equity), a year-long series that will track how and where the region’s government, philanthropic, civic and private sector is working toward a more just recovery.
Which bill are you going to pay?
It is called the heat or eat dilemma — deciding what basic need to pay for and which to forego. Because of the pandemic, an escalating number of families are joining the ranks of those facing this crisis daily.
Nationally about one out of every three families have back utility bills that combined amount to $32 billion dollars. And the debt is increasing, and help is a patchwork of programs, each with its own requirements.
There was a spike of back utility payments collection when the first stimulus checks were released according to collection industry experts who purchase bad debt, but that disappeared when the stimulus money was exhausted.
There are also government programs such as the Low Income Home Energy Assistance Program (LIHEAP) which was authorized in 1981. However, at current levels, LIHEAP can only assist about 17% of eligible households. Just filling out a LIHEAP application can be daunting especially for bilingual population, said City Councilwoman María D. Quiñones-Sánchez.
In January. PGW started their COVID-19 Relief Grant providing $300 for gas bills for customers with pandemic-related financial hardships.
“Low-income families tend to triage when in crisis and respond to the biggest fire first,” said Elizabeth Marx, executive director of the Pennsylvania Utility Law Project, a Harrisburg-based nonprofit that assists low-income consumers maintain affordable utility and energy services.
Keeping access to the basics — water, energy, and increasingly, telecommunications and broadband — is becoming that biggest fire.
Energy burden is housing and food insecurities’ hidden cousin but the economic chaos of the pandemic is putting it in the spotlight. Current arrearages for the state’s regulated utilities add up to $812 million. “That’s up 64 percent year over year,” Marx said. Add in the state’s 1,200 unregulated utilities and the debt amount reaches over a billion dollars. “It is a staggering amount,” said Marx.
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And with utility debt comes utility shut-offs.
Out of a total of 118.2 million US households, in 2015, the US Energy Information Administration (EIA) estimated that 17 million households received an energy disconnect/delivery stop notice and 25 million households had to forgo food and medicine to pay energy bills. Marx said the utility debt is not a new problem but has been exacerbated by COVID, especially the high rate of unemployment. The U.S. economy lost 22 million jobs from February to April 2020 and by November 2020 there were still 10 million fewer jobs than in February.
According to Mark Wolfe, executive director of the National Energy Assistance Directors’ Association (NEADA), which represents state LIHEAP directors, the average debt is $1,500 and double that amount for those in older, energy-inefficient housing.
And the debt is still growing. Utility terminations disproportionately impact BIPOC households. Latinx households are more than 15 times and Black households more than six times more likely to suffer a shut-off than white families.
And with shut offs come a cascading number of problems:
- Children in homes that do not have running water and heat can be taken by the welfare system.
- The medically vulnerable are at risk because of medicine that can not be refrigerated or equipment which cannot be plugged in. Recent estimates suggest that at least 685,000 people in the United States use medical devices that require electricity.
- There are the headaches of trying to get reconnected and the costs of fees.
- There’s the hit to your credit report, making it harder to rent the next time.
- There are liens placed on property threatening foreclosure.
Quiñones-Sánchez, who is specifically fighting for affordable water debt, pointedly added that municipal utilities — like the Philadelphia Water Department — shouldn’t even be in the business of adding to housing insecurity.
But for the utility companies, with a growing customer base in arrears, the shut-off notice is often the stick that prods repayment. Industry statistics show that 70% of low-income customers facing a shut-off or who were disconnected have their power up and running within 48 hours of receiving the notice.
“Yes, the threat of termination does make people pay but they find a way by forgoing food or they borrow from payday lenders,” Marx bristled.
The traditional answer for help has been to place seasonal moratoriums on shut-offs which has help to ease some of the immediate pain but the moratoriums do not eliminate the bills. Moratoriums do not apply to municipal companies, utility cooperatives or those who receive delivered fuels like heating oil.
With COVID-19, there has been extensions to moratoriums. Gov. Tom Wolf implemented a disconnection moratorium last March, but it was lifted in November although many utilities company didn’t rush to deliver shut-off notices.
Quiñones-Sánchez, declaring that water is a human right, has fought for affordable water bills.
Water debt is becoming a searing crisis. According to studies, water bills went up by at least 27 % between 2010 and 2018, the result of increasing costs and decreasing federal aid to water utilities.
One of of every five Philadelphians who had an outstanding water department lien lived in Quiñones-Sánchez’s district. In 2015, she shepherded through City Council the Tiered Assistance Program (TAP) which required income-based payments that covered current serve and past-due balances and would create a path to the forgiveness of past debt.
The program started in 2017 and since then Quiñones-Sánchez said, “We’ve progressively gotten better. There are now about 20,000-30,000 city residents who are still eligible for the debt program.”
“We need to recognize that families are suffering in a profound way and the old way is not enough,” said Marx.-30-
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