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States Are Letting Utility Companies Cut Off Power Just as Winter Arrives

The looming shutoffs come as public health officials warn the newest COVID-19 variant is spreading across the U.S.

Victor Zelaya and Esperanza Gonzalez cook rice on a barbecue grill during power outage caused by the winter storm on February 16, 2021, in Houston, Texas.

Millions of U.S. residents behind on bills are at risk of having their electricity, heat and ability to stir up a hot meal cut off on December 22 by private utility companies, just a day after the solstice heralds the colder states’ descent into true winter’s chill. During the early months of the pandemic, 34 states issued power shutoff moratoria, protecting residents facing economic hardship from having their lights and water shut off due to a late utility payment. As of December 2021, 32 of those states have let those protections expire.

New York and New Jersey, where elected officials have extended deadlines numerous times, are the holdouts. But each state’s moratorium is set to lapse before the end of the year, just when ratepayers are more behind in payments than ever before: As of November 2021, ratepayers in the Empire State alone owed a whopping $2 billion to energy giants such as National Grid and Con Edison.

The looming power shutoffs come just as public health officials warn that the newest and most infectious COVID-19 variant has been detected in the majority of U.S. states. According to a working paper by the National Bureau of Economic Research, earlier utility shutoff moratoriums reduced infections by more than 4 percent, and mortality rates by more than 7 percent. Had Congress implemented a nationwide moratorium on utility shutoffs between March and November of 2020, COVID-related deaths could have been reduced by nearly 15 percent.

Amber Johnson is the organizing and training director at the New York Energy Democracy Alliance (NYEDA). She says defaulting on utility payments and accruing overdue balances, known as arrearage, is much more common than people realize.

“If you’re behind in your bills, you think it’s just you, right?” she told Truthout. But 1.2 million households and more than 128,000 businesses across New York State are at least 60 days behind on energy bills, according to monthly reports submitted to the New York State Department of Public Service and analyzed by the Alliance For a Green Economy (AGREE).

“We’re in a utility debt crisis,” Johnson said. On average, residential households experiencing utility debt in New York owed $1,347, contributing to an estimated $35 to $40 billion across all 50 states.

The problem isn’t new. Utility debt is actually ubiquitous and a slice of a stunning $15 trillion in U.S. household debt. But it’s gotten worse during the pandemic. In all, according to reporting by New York Focus, household utility debt in New York increased by 119 percent between February 2020 and September 2021, with hundreds of thousands of shutoff notices sent in November.

As Johnson points out, low-income communities and communities of color are particularly susceptible to debt and shutoffs for reasons of systemic injustice. On account of historically racist housing policies, Black families are more likely to live in energy-inefficient housing stock, according to forthcoming research to be published in the journal Energy Research & Social Science.

Ebony Jackson is a community leader and small business owner in Binghamton, New York. As a single mother, covering expenses is a constant challenge. But utility payments are the tipping point. “It’s really been the crux of my poverty,” she told producers of a short film played during the Utility Justice Film Festival in February 2021.

The last house Jackson rented was old and leaky. The foundation was sagging, which created cracks and a drafty interior. Plus, there weren’t even storm windows. Her landlord knew this, she said, but he was aiming to sell the house, so he didn’t want to invest in the fixes. At one point she owed more than $3,000 to her utility company, the New York State Electric & Gas (NYSEG).

Energy executives and public officials have poured fuel on the fire, exacerbating existing debt like Jackson’s by continuing to propose and rubber-stamp rate hikes as the pandemic roars on. A NYSEG rate hike applied retroactively from April 2020 to 2023, increases average household bills by more than 9 percent.

“This is a reasonable outcome for ratepayers,” Public Service Commissioner John Howard told the USA Today New York Network, noting that the agency approved a lower rate hike than the utility requested.

To help with ballooning debt, online mutual aid groups across the country, such as @mutualaidmamas, @blackwomenexhale and @dsm_mutual_aid have been busy channeling utility assistance to those most in need.

The federal government offers the Home Energy Assistance Program, but the application process is cumbersome and doesn’t stretch far enough. In 2019, approximately one-third of eligible households in New York did not receive assistance. Some states have gotten involved in notable ways too. In California, for instance, a statewide arrearage management plan sets aside $1 billion in funding to help with utility debt. Notably, and in contrast with many state programs, eligible residents do not need to apply — the assistance is automatically credited to accounts.

For those behind on bills, says Avni Pravin, deputy policy director at AGREE, it is essential that residents respond to shut off notices, because utilities are required to establish a payment plan with customers. Pravin also suggests getting in touch with the Public Utility Law Project of New York, which provides utility rights training, helps residents apply for assistance and files complaints on behalf of ratepayers.

But as crucial as they are to supporting residents facing the immediate existential threat of losing heat during the coldest months, one-time financial support and legal counseling provide thin cover in the medium to long term.

“This is part of a larger system of unwillingness to actually do something about unaffordable energy,” Pravin said.

That’s why in New York, dozens of groups are calling on Gov. Kathy Hochul and State Assembly members to pass emergency legislation ordering the Public Service Commission to cancel all utility debt and to cover the cost using corporate utility shareholder returns. The letter also requests an extended two-year moratorium on all utility shutoffs.

While there is no precedent for a statewide, comprehensive utility debt cancellation program, New York has a reputation for leading on energy and climate. In 2019, the state passed the most ambitious state-level climate legislation in the country, requiring its electricity sector to be emissions free by 2040. An executive act mandating utility debt cancellation would build on this legislation, as advocates characterize dealing with utility debt as a precondition to rolling out the kinds of equity-centered renewable energy programs in the state’s historic climate law.

Energy justice advocacy groups are also pushing for legislation that would guide a shift from privately owned power generation and distribution capacity to more democratically run, publicly owned systems. Bills such as the Build Public Renewables Act would help by requiring the state’s largest publicly owned utility to be the sole provider to both state-owned and municipally owned buildings and to exclusively source renewable energy.

Short of such legislation, explained Lee Ziesche, community engagement coordinator for the nonprofit Sane Energy Project, private and public money paid to utility companies often goes to funding projects that threaten the health and climate resilience of communities that host them. As VICE News reported, in August 2021, the Public Service Commission voted 7-0 to approve a rate hike impacting 1.9 million residents, $129 million of which was earmarked to build National Grid’s North Brooklyn Pipeline, which has faced significant community opposition.

“That’s what people actually are going into debt to pay for,” Ziesche told Truthout. “They’re going into debt to pay for a fracked gas pipeline that they said that they didn’t want built through their community.”

This is not uncommon. A 2021 Rocky Mountain Institute report found that gas utilities pass the cost of building new pipelines and mains onto customers, to the tune of hundreds of millions annually, which locks in the use of fossil gas for decades to come.

Josue De Luna Navarro is the author of a recent report published by the Institute for Policy Studies that outlines a public power roadmap for New Mexico. As Navarro writes, one of the biggest advantages of the public ownership model is that revenue is available to reinvest in community visions, rather than to bankroll what companies dictate, such as more fossil gas buildouts. And that means community wealth building. Over the 25-year lifespan of a locally owned solar project, for instance, $5.4 million in electricity spending is directed back into local pockets, according to the Institute for Local Self-Reliance.

Plus, public power would likely lower bills. In Nebraska, which is currently the only state in the U.S. with 100 percent publicly owned energy infrastructure, residents pay at least 15 percent below the national average for the energy they use. In short, public ownership transforms access to energy “from a for-profit service to a basic human right,” Navarro writes.

Back in New York, both the utility debt crisis and delay in rapid transition to renewables are a result of policies that favor private ownership, said Patrick Robbins, a coordinator with NYEDA. “If people actually have control over our energy system, and we’re making decisions about the basic resource that affects all of our lives, then you would be talking about a system that isn’t run solely for the benefit of a small handful of wealthy shareholders,” Robbins said. “We’d be talking about something that benefits all of us.”