Photographer: Joe Klamar/AFP via Getty Images

More Americans Are Getting Their Electricity Cut Off

  • In lingering effect of Great Recession, shut-offs stay high
  • Trump wanted to scrap $3.4 billion in assistance to nonpayers

More than 900,000 homes went dark in Texas last summer because of unpaid bills, almost triple the number 10 years ago. In California last year, it was 714,000, the most on record. The tally across the country is in the millions, a sign of the economic stress that lingers after the Great Recession.

Utilities are disconnecting more households as President Donald Trump moved to end $3.4 billion in federal energy-bill help for the poorest Americans. Congress voted to reinstate the funding, but the administration has yet to release the money.

“It’s indicative of an economy that’s still recovering,” said Katrina Metzler, executive director of the National Energy and Utility Affordability Coalition in Washington. “Underemployment is still common, and many families live paycheck to paycheck.”

Most customers aren’t denied electricity for long. Utilities commonly work out payment plans or help customers get financial aid within a few days. About 10 percent to 15 percent of people who are disconnected never get reconnected, according to the Utility Reform Network, a San Francisco-based consumer group also known as TURN.

While the U.S. jobless rate fell to a 16-year low of 4.2 percent last month -- compared with 10 percent in 2009 -- many Americans are struggling. Forty-four percent of adults told the Federal Reserve Board of Governors last year that they wouldn’t be able to cover a surprise $400 expense or would have to sell something or borrow to raise the money.

The Trump administration’s 2018 fiscal-year budget scrapped the Low Income Home Energy Assistance Program, or LIHEAP, because it’s “no longer a necessity” and subject to fraud. Mick Mulvaney, director of the U.S. Office of Management and Budget, testified to Congress in May that 11,000 dead people were used as applicants to receive the LIHEAP benefit, a statistic cited in a 2010 General Accounting Office report. About 2.9 million households were disconnected for nonpayment last year in the 18 states surveyed by TURN, the San Francisco group.

First Administration

“The House and Senate have rejected virtually the entire administration’s Health and Human Services budget,” said Mark Wolfe, executive director of the Washington-based National Energy Assistance Directors’ Association. “This is the first administration we’ve had in a long time, however, that’s said, ‘We don’t think this program should exist.”’

Asked why Congress reinstated the funding, Wolfe said: “Grandmothers.”

Kelly A. Love, a White House spokeswoman, referred questions about LIHEAP to Coalter Baker, a spokesman for the budget office, who didn’t comment beyond Mulvaney’s testimony to Congress.

Not all states track electricity shut-offs, but in those that do, numbers are rising. Ohio utilities cut off more than 314,000 customers in the 12 months ended in May 2016, an 84 percent increase from 10 years ago. In Pennsylvania, electricity terminations doubled in 2008 and have risen since. The state tallied 220,000 in 2015.

The federal assistance program reaches only 19 percent of eligible households, according to a July letter from 14 state attorneys general urging more LIHEAP funding.

The average price for residential power rose 18 percent from 2007 to 2016, according to the Energy Department.

Evict Tenants

Electricity isn’t only about being able to watch TV, keep ice cream frozen or charge a phone. Without power, landlords in some jurisdictions can evict tenants, and social-service agencies can take away a family’s children, according to Josie Pickens, an attorney for Community Legal Services in Philadelphia.

A California law enacted last month curbs utility shut-offs to homes with anyone under hospice care or dependent on home life-support equipment. It requires the state’s utility regulator to assess the effect on disconnections when setting customer rates. 

In August, New York’s utility regulator slapped new rules on its biggest utility, Consolidated Edison Inc., saying it had “insufficiently informed customers” of their rights before seizing meters for unpaid bills.

Shut-offs are often a hassle for U.S. power companies. Uncollectibles surged 60 percent to $1.53 billion during the recession and have remained above roughly $1.3 billion since, according to data provided by Edison Electric Institute, an industry trade group. That money is either billed to other customers or covered by shareholders.

Stressed electricity users may pay their power bills last. Research by California power companies suggests some wait until shut-off so they can qualify for one-time $1,300 assistance, according to Marzia Zafar, director of the policy and planning division for the state’s public utilities commission.

Pacific Gas & Electric, a unit of San Francisco-based PG&E Corp., said it helped customers receive $30 million in LIHEAP assistance last year and reconnected 80 percent of customers who were cut off.

“We want to make every effort possible to avoid these disconnections,” said Dan Cutler, a spokesman for the utility. “It’s better for us to have customers.”

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