As utility bills rise, so do shutoffs
The government and utilities themselves are scrambling to put more aid on the table for low-income families.
NEW YORK — Austin Energy, a Texas utility, told Christine and Thomas Alewine that if they didn't come up with $1,619 in overdue charges within a week, it would shut off their water and electricity.
They didn't have the money. Mrs. Alewine says she was "already not buying groceries," and the family of five was considering moving into a motel for the summer.
Although the Alewines' case was eventually resolved after a personal plea to utility executives, their plight typifies what millions of Americans may face this summer amid rising energy costs.
Already, the number of people needing help with utility bills has increased by a record amount in the past year - 1.1 million. And figures from 18 states show the number of Americans paying their bills late is 50 to 100 percent higher than a year ago.
Much of the hardship stems from high natural-gas and heating-oil bills last winter. But now, with electricity usage and rates also rising in much of the country, experts say it could become one of the worst years in history for delinquencies and utility cutoffs.
"All indications are that we are going to see a record number of shut-offs this year," says Mark Wolfe, director of the National Energy Assistance Directors' Association (NEADA) in Washington. "If this is a hot summer, there is a lot to be worried about."
With help in short supply, both government and the utilities themselves are scrambling to put more aid on the table. On Tuesday, President Bush said he'll ask Congress to approve an additional $150 million to help low-income Americans pay their summer energy bills.
Although there are no national statistics on how severe the situation is, NEADA estimates that as many as 4 million families in 18 states, plus the District of Columbia, risk having their energy cut off this year. Major problems have cropped up in the South and West, where significant financial help was not needed before.
The main reason for the large increase in payment problems is mushrooming utility bills, which come at a time when layoffs are rising. The Energy Information Agency estimates consumers using oil to heat their homes in the Northeast paid $994 this past winter, compared with $760 the year before. In the Midwest, the price rise was even more striking: The cost of heating with natural gas rose from $540 to $956. Even in the comparative warmth of the South, customers of Dominion Virginia Power saw their bills in December rise by 19 percent.
During the home heating season, individuals in need can turn to the federal government's Low Income Heating Energy Assistance Program (LIHEAP), which helped 5 million people this year - up from 3.9 million last year. But most of that money has been spent and will not be replenished until October.
Those who can't keep up with their payments often end up seeking help from local agencies. One is the Ramsey Action Programs in St. Paul, Minn., where the brutal winter resulted in people owing $1,500 to $1,700 for energy by this spring.
"What we're seeing is discouragement among people who are really trying hard," says Alice Davis, director of the independent living division, which includes heating assistance.
Ms. Davis says she currently has applications for help from 657 people. Her agency, however, has no funds left to help anyone.
Faced with this situation, advocates for the poor are trying to lobby Congress and the White House to add a supplemental appropriation to LIHEAP. Last week, Rep. Ralph Regula (R) of Ohio, chairman of a House Appropriations subcommittee, said he was working to include LIHEAP in a supplemental spending bill in early June.
Mr. Bush, in his energy package, noted that energy costs for the poor and elderly had risen from 11 percent of their income to 14 percent. "Another summer of very hot weather and high energy bills could cause serious health problems for some Americans," said the report.
Despite its sensitivities, the White House reduced funding for energy assistance to $1.7 billion, down from $2.2 billion spent this past year. The president did, however, call for an extra $120 million a year for 10 years for weatherization programs.
The nation's utilities are also trying to ameliorate the effects as much as they can. A few are experimenting with prepaid cards for meters, which then tell a customer exactly how much of their payment is left.
Almost all utilities have payment plans. When customers agree to such a plan, however, they don't always have the ability to stick to it. For example, an individual in Knoxville, Tenn., agreed to pay the local utility $411 a month. But her monthly income is $602.
"To get their power turned back on, low-income people often agree to budgets we know they can't afford," says Davis.
Many utilities also allow customers to contribute money to a fund that helps other customers. The company then matches the contributions. And sometimes utility company employees add to the kitty from their own pockets or through fundraisers. In California, for example, Southern California Gas helped 8,000 families with the $800,000 it raised.
Sometimes just sending a notice that the electricity will be turned off is a motivator. This spring, Dominion Virginia Power sent such notices to 20,000 customers. Since then, 60 percent have paid up, says Irene Cimino, a spokeswoman.
Some utilities are also intending to follow through on notices. That's the case with Austin Energy. "We've been one of the more lenient, but now we're taking a look," says spokesman Ed Clark.
Mr. Clark says the utility has been working with the Alewines for some time. "We've really helped these folks - now it's up to them," he says.
The Alewines had been preparing for the worst. But early this week, their story, which included medical complications for Mrs. Alewine, resulted in a respite from the utility after top executives learned of the family's difficulties.
Now the Alewines have to come up with $237 a month until the bill is paid off. She's grateful but wary. "I'm still only buying one meal at a time," she says.
(c) Copyright 2001. The Christian Science Monitor