NEADA: Low-income families trapped in a never-ending cycle of arrears.
Millions of households in the United States have outstanding utility bills as a result of increased living expenses and the impact of inflation; this problem could become more serious as power outages and cooler winter loom.
One in six households, or more than 20 million people, have unpaid electricity bills, according to the National Energy Assistance Directors Association, which compiles data on national energy assistance programs.
In June, the total amount owed was $16 billion, slightly shy of the year’s highest figure of $16.5 billion in March.
The Office of the New York Comptroller said that 1 in 8 New Yorkers had unpaid utility bills as of March. That amounts to 1.2 million people owing utilities a total of $1.8 billion, and not much has changed since then.
Some New Orleans households pay utility bills that total four figures. In order to learn more about payment alternatives, energy-efficient education, electric vehicles, and hurricane readiness, Entergy New Orleans held its first energy expo on Saturday.
Mark Wolfes, executive director of NEADA said that the rising energy costs are a major contributing factor to this rise in utility debt. As per the U.S Labor Statistics Bureau, consumer prices for both electricity and natural gas have increased over the last 12 months by 15.2% and 30.5%, respectively. Additionally, according to data from the United States, the cost of home energy rose from $2,511 in 2019 to $3,044 in 2018 for households whose annual income is in the lowest 20%.
“If current trends continue, the cost could reach about $3,385 this year,” he said.
“On top of that, families are struggling with high rates of inflation for other essential goods like gasoline, food and rent,” he added.
Natural gas costs have increased by 127% over the past year, in part as a result of Russia’s invasion of Ukraine, which has driven up the price of commodities worldwide. Despite falling from June highs, gasoline prices are still 28% higher than a year ago. This is because crude oil has fallen from $122 per barrel to the current price of $93.76.
With an increase of 8.5% in July over the same month last year, the cost of living rose to a 40-year high. The price increase for groceries was 13.1% over the same time last year, continuing the upward trend. Many Americans said they had already used their savings to pay expenses, and many had purchased cheaper alternatives and smaller package sizes to reduce costs.
The National Energy Assistance Directors Association stated that, overall, Americans owed $8 billion in electric debt prior to the outbreak.
The amount started to increase when payment moratoria went into effect, reaching more than 13 billion. Then, in the first half of this year, utility prices increased and more Americans started to fall behind on their payments, resulting in an additional $3 billion in electric debt in just 180 days.
Lower-income Americans are already finding it difficult to repay credit card debt and buy expensive products like cars due to growing costs. Industry leaders claim that there will be no immediate drop in the high prices.
Lipow Oil Associates president Andrew Lipow wrote, “The consumer is going to pay more for their heating bills this winter, whether they use natural gas or home heating oil, most will have sticker shock.”
Sources: Westernjournal, Foxbusiness, Usatoday