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As states reopen after coronavirus shutdowns, consumers' unpaid utility bills loom as costly problem

Sarah D. Wire and Anna M. Phillips, Los Angeles Times on

Published in Business News

Utilities, regulators and many in the industry are asking Congress for at least another $4.3 billion this year for LIHEAP to be included in the next package, which would more than double what the program received for fiscal 2020. They've also encouraged lawmakers to approve aid directly to utilities to cover those who don't qualify for the low-income assistance program.

States including California are starting to work with utility companies to ensure they won't immediately call the debts in when the moratoriums lift, but there is no guarantee that millions of low-income people won't suddenly find themselves owing thousands of dollars.

"If you imagine that somebody hasn't been drawing a paycheck for three to four months and wouldn't be able to afford their utility bills during that time ... they're not going to be magically able to discover three months' worth of income," said David Pomerantz, executive director of the Energy and Policy Institute, a pro-renewable energy watchdog group.

Utility companies typically plan for defaults of about 10%, but companies aren't prepared to absorb the anticipated levels of loss, Wolfe said. California utility companies have not sought a rate increase, but a few companies in other parts of the country have already asked states to allow them to increase rates for all customers, specifically blaming the coronavirus crisis.

"They've never had this many customers out of a job," he said. "They're not set up to deal with numbers like this."

 

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