The utility bubble is approaching the bursting point, but who will pay?
“The New York debt crisis for utility consumers is at a level we’ve never seen before,” said Richard Berkley, executive director of the Public Utility Law Project.
BUFFALO, NY — Time is running out for more than a million New York homes who risk having their power and gas cut off if they don’t pay their debts, which have soared during the pandemic.
Advocacy groups like New York’s Public Utility Law Project are now urging the state to help these largely fixed, low- and middle-income people stay afloat by allocating $1.25 billion in bailout funding. American.
“The New York debt crisis for utility consumers is at a level we’ve never seen before,” said PULP executive director Richard Berkley.
According to their analysis, the total amount of debt owed to electric and gas companies like NYSEG and National Grid reached $1.7 billion in January; Of which $775 million was due before the pandemic. Until December 21, New York prevented customers from turning off their heat and electricity. For those who have lost a job or had their hours cut in the past two years, Berkley said it’s been a huge plus not having to pay utility bills, but the reality is that those backlogs continued to accumulate.
PULP found that 27% more gas and electric customers now owe their suppliers than before the pandemic and although the state limits when heat and electric providers can cut their services until April 15, payment is due.
“Consumers don’t really have a real chance of paying for it. We haven’t fully recovered from COVID. Like the Great Recession, it will take 10 years for low- and middle-income households to see some sort of economic recovery.” , Berkley said.
The data compiled by the Public Utility Law Project was based on reports from the state civil service commission. Although it showed a deepening of the debt bubble, fewer people were added to the list during the second half of the pandemic, and in December 2021 and January 2022 there were 1% of people in less in arrears. Berkley said the only flaw in their analysis is that it only included electricity and gas.
“We estimate one and two billion for water, but we don’t have figures for that, then probably another three billion for telephone and Internet,” he added.
These suppliers are not required to declare to the State what is owed to them by customers.
Compared to the 27% more customers statewide, gas and electric providers in Western New York were lower on average. NYSEG had 19% more overdue customers, National Grid 18%, National Fuel 27% and RG&E 11%. The Public Utility Law Project is now urging state lawmakers to use US bailout money to pay off these people’s debts.
“It’s $12.75 billion and we said, look, we’re asking for 9% and 9% of that is $1.25 billion and that’s enough to clear all the arrears that have accrued on energy consumer bills that we have been unable to pay over the past 24.5 months,” Berkley said.
Funding is not guaranteed at this time and will depend on what is included in the budget proposed by the state legislature. Berkley explained that one thing customers can do to help their debt situation is to call their electric or gas supplier and ask about setting up a repayment plan.
Berkley added that while this financing is not a guarantee, one thing customers can do is call their electric or gas provider and ask about setting up a repayment plan, to avoid being hit with months and months of unpaid utilities at the same time.