Millions have fallen behind on utility bills since the pandemic started while utility debt is an estimated $32bn
Magda, who lives in Girard, Ohio, relies on social security disability benefits for her sole income. Like many Americans, she can’t pay all her bills, living expenses and medication with the benefits she receives, and through the pandemic she fell behind on utility bills.
Millions more Americans fell behind on utility bills during the pandemic. Utility debt increased from around $12bn before the pandemic to an estimated $32bn by the end of 2020, according to the National Energy Assistance Directors’ Association (NEADA).
The UK, Europe and China have been racked by soaring energy prices. So far most of the US has been spared the worst of it but economists are predicting that here too an energy crisis is looming, and as winter approaches prices are rising, potentially threatening the utilities of millions more.
“I’m disabled and have had to live without hot water, a stove to cook on, and now heat. It’s been so hard,” said Magda.
She’s behind on her electric bill and fears having that shut off as well. Attempts to get help with her utility bills have so far failed and she was told local charities and community groups are out of funds until 1 November.
“I can only eat certain things because I have to use the microwave or electric skillet,” added Magda. “Social security is not sufficient to cover my bills and everything else I need for a month. I was always sending what I could to the utility bills but couldn’t make the payments they asked for.”
Mark Wolfe, executive director of NEADA, noted utility debt could have been much worse without supplemental funding through the American Rescue Plan in March 2021 and additional funding to the annual budget of the Low Income Home Energy Assistance Program (LIHEAP).
Only Washington DC and three states – New York, New Jersey and Wyoming –have continued utility shutoff moratoriums that were begun during the pandemic. But worries of increases in utility debt remain. Unemployment benefits for millions of Americans expired in early September and natural gas prices are expected to rise by as much as 30% for consumers this winter throughout the US, Europe and Asia.
“The upcoming winter is of serious concern. Natural gas, heating oil and propane prices have become very expensive and will put pressure on families this winter,” said Wolfe. “If additional funding is not provided then I expect that arrearages will spike again, unless Congress provides additional funding for energy assistance programs.”
Most states do not require utility companies to provide data on debt collections and shutoffs. An analysis by the Center for Biological Diversity in June found over 1m households in 17 states in the US have experienced a utility shutoff since March 2020.
Since then, additional statewide shutoff moratoriums have expired, including in California where an estimated $2.7bn in utility debt was accrued during the pandemic.
On 7 September, utility workers arrived at Hunter Wade’s home near Marquette, Michigan, to shut off the utilities. A notice was sent to his house, shortly after his unemployment benefits expired. Wade had lost his income as a gig worker as a musician and working for a seminar company and says he never saw the shutoff notice.
“I wasn’t made aware of it until they were actually on my porch to disconnect the electric.
“It was pretty triggering. I cried in front of the utility workers,” said Wade. “I was a free-lunch kid, so it’s not my first time experiencing financial hardships. It was my first time getting shut off.”
He was able to get help from a local organization, but spent 24 hours without any electricity in the meantime, and is still concerned he might have the same problem with his utility company, owned and operated by his local town, until he is able to restore his income.
Some who spoke to the Guardian about their struggles facing utility shut-offs and paying debt and fees through the pandemic requested to remain anonymous.
A single mother in Indiana was laid off from her job earlier this year due to the pandemic. She recently landed a new job, but has struggled to cover expenses and bills because her unemployment payments ended in the beginning of September.
“I have never felt so hopeless or alone, because it seems like the world is just continuing on with no problems, and I’m struggling so much,” she said. “I’m just a giant bag of anxiety and crying, while trying to hide it from my kids.”
She found out hours before a utility shutoff notice expiration that her application for rent and utility assistance finally went through.
Others are still awaiting help, such as a mother of five young girls in Oklahoma, whose hours in her sales job are still reduced because of decreased demand. She was told her local organizations aren’t accepting any more applications for relief until they catch up on the influx they have already received, and her utility company refused to work with her on pausing payments until she’s able to make them.
“I gave birth to my daughter on September 8 and I had to return back to work a week later to be able to catch up on bills and be able to save up money to fix my car,” she said. “I’ve made payment arrangements on my utilities but I’ve failed to make a payment on them, so they cut my gas and I had to borrow money to be able to keep my electricity on for my kids.”
High utility bills and skyrocketing rates
High and unaffordable utility bills are a problem across the US that precedes the pandemic, but one that became more prominent in the past 18 months, as the lack of utility shutoff moratoriums have been linked to a rise in Covid cases and deaths.
“Utilities is one of those day to day issues that gets missed,” said Amna Farooqi, a senior organizer with the organization 9to5 Georgia. Farooqi noted elected officials have consistently diverted responsibilities when pushed on the issue of unaffordable utility bills, and high bills are blamed on personal use rather than systemic problems. “People are trying to kick the can of responsibility around, but we need federal policies in place, state policies in Georgia, but also local policies.”
In Albany, Georgia, where more than 30% live under the poverty rate, residents have experienced high utility bills for years, often exceeding $700 a month. A report released in September by 9to5 Georgia outlined why utility bills for the city and across the nation are often so high, citing the monopoly of energy companies, poor and energy inefficient housing, a lack of accountability for local and state governments overseeing utility services, and extreme weather events worsened by the climate crisis.
In the wake of hurricanes and winter storms throughout the US, utility companies have often passed on the costs incurred by these storms to residents, along with increased rates and fuel costs. Residents in Kansas, Louisiana, Texas and Arkansas have complained about sudden surges in their utility bills through 2021.
Jesse Dorle of Siloam Springs, Arkansas, noted her utility bills for a one-bedroom apartment have doubled, from around $175 to $350 a month in recent months due to costs incurred by utility companies for bad winter storms in early 2021.
“I have unplugged unnecessary devices, kept my air low or even off, to try and lower my bills. Also I stopped using my dishwasher, limited my washer and dryer use, trying to be more efficient. I even switched to energy-saving light bulbs. Still last month my bill was $365,” said Dorle. “Hard-working people like myself are struggling to keep our heads above water, and this hike is ruining us. Why should we have to pay enormously high costs for a basic human necessity?”