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Left in the Cold — Utility Shut-Offs and State Responses

Working families struggling to make utility payments are feeling the chill as companies shut off their gas and electricity. Shut-offs are up across dozens of states, particularly Michigan where unemployment is high, with a 22 percent increase in the number of families left without heat or electricity. The state's Heating and Warmth Fund, which helps those in need pay delinquent heating bills, has seen a record 42 percent increase in people applying for heating payment assistance.

Utility companies promised that deregulation would bring increased competition and reduced prices, but the opposite has occurred. Instead families are faced with choosing between paying for food, rent or heat. In Maryland and Illinois, as rate caps expired, states had to scramble to respond to rapidly rising consumer costs. Here are some state solutions to beat back the cold:

  • In New York alone, more than 230,000 residential customers of 10 major utilities have faced service shut-offs for nonpayment through August of this year, an increase of 17 percent. New York is spending an extra $49 million on energy efficiency programs through its Home Energy Assistance Program (HEAP)
  • Connecticut’s Energy Assistance Program plans on distributing $84 million for heating fuels costs this winter to more than 90,000 households. The program provides basic assistance ranging from $650 to $925 for homeowners and renters whose heat is not included in the rent and up to $455 for tenants whose heat is included.
  • Maine intends on distributing “warm kits” that include low-flow showerheads, caulk and high-efficiency light bulbs.

States are also examining long-term measures to ensure that energy rates remain relatively stable by increasing oversight and requiring energy companies to provide "least-cost" energy portfolios of long and short term resources:

  • Maryland’s HB 1314 / SB 538 would increase oversight and ensure that electric companies satisfy reliability and electricity supply needs and provide specified customers with safe and reliable electricity supplies at affordable prices.
  • Pennsylvania HB 1201 seeks to address the rate cap expiration beforehand by requiring that utilities provide their customers with "least-cost" service rather than relying on costlier prevailing market rates.

Consumer advocate groups like ACORN, the PIRGs, and AARP have called for reforms such as independently-run energy efficiency systems, price controls on gasoline, heating oil, propane, and natural gas, banning utility shut offs and ensuring more consumer representation on boards of public power agencies. In a nation that can spend hundreds of billions of dollars to bail out Wall Street and banks, states are exploring how to keep the electricity and gas flowing to families that would otherwise be left literally in the dark.

Resources

Testimony of Sonny Popolowsky, Consumer Advocate of Pennsylvania before the PA House Consumer Affairs Committee Regarding Electricity Procurement, Rate Caps And Electric Price Mitigation Strategies
ACORN - More seek help with heating bills
ACORN Utilities
Maryland PIRG
Maryland HB 1314
Maryland SB 538
Pennsylvania HB 1201