Rising energy costs amid the pandemic are leaving some New Yorkers underwater.
Higher utility bills are compounding unprecedented levels of debt, and consumer advocates say more public funds should be allocated for people who are behind on their payments.
“We’ve never had a level of unpaid utility debt like this,” said Richard Berkley, executive director of the Public Utility Law Project. “These are unpaid bills that the people owe them have no reasonable likelihood of being able to handle so where we’re creating a multi generational debt.... It’s a massive crisis.”
Across the state, almost 1.3 million residential gas and electric customers are 60 or more days behind on their bills to the tune of over $1.7 billion, according to an analysis by THE CITY of data provided to the state by 10 utility companies.
That includes 411,694 residential Con Ed customers in New York City and Westchester, who collectively owe $819,224,604, based on figures for January 2022.
Nine of the utility companies submitted data for the same time period in 2020 before the pandemic. Since then, considering the same nine companies’ latest data, the number of residential customers in arrears increased by over 32% and the total debt owed more than doubled.
A statewide pandemic-related moratorium on utility shut-offs for nonpayment expired Dec. 22. Although utilities have not reported cutting any residential customer’s gas or electricity, many people behind on their bills have received termination notices, the data shows.
The city, state and utility companies have been encouraging customers to apply for assistance and to enroll in payment plans, but whether enough has been allocated to prevent shut-offs is an open question.
Meanwhile, Con Ed says it’s examining how its billing practices affect customers after the state requested a review — and New York City residential customers will receive a small credit for the supply rates.
“This level of price volatility is of concern to all,” state Public Service Commission Chair Rory Christian Thursday said at a commission meeting, during which he emphasized that neither Con Ed nor the state controls energy supply rates.
“This experience serves as a reminder that we must consider energy affordability in every action we take,” he added.
Assistance for Some
Con Ed customers are feeling the burn from surging supply costs, some of which tripled for certain residential electric customers, as THE CITY reported last week.
The Department of Public Service, which regulates all utilities in the state, received about 1,230 web inquiries and 2,316 calls since Jan. 29 from Con Ed customers regarding the high supply costs, according to James Denn, a DPS spokesperson. That’s up over 40% from the previous week.
DPS staff directs people with bill-payment issues to state and utility assistance programs. They certainly help some but not all utility customers, advocates say.
“We’ve seen some people who have been given a lot of assistance if they fit in all the right buckets and checkmarks,” said Megan Sergi, program director for Center for Urban Community Services, which helps New Yorkers find assistance programs. “You have to meet a lot of criteria to fit the right profile.”
The state-run Home Energy Assistance Program, or HEAP, for example, can provide up to $751 toward heating assistance. But eligible customers are only those who receive federal food stamps, temporary assistance or Social Security benefits, with income and household size factored in.
More than $373 million is available through HEAP. The state Office of Temporary and Disability Assistance, which runs the program, has issued about 1.4 million benefits for $208 million since Oct. 1, 2021.
Regular HEAP doesn’t cover arrears, but supplemental benefits can. Eligible households can have up to $10,000 paid directly to their heat-providing utility company. Since Sept. 22, 104,000 have received the benefit, with $166 million in arrears paid off. The state hasn’t yet finalized the total funding available for this program yet, according to OTDA.
The emergency HEAP program makes more than $90 million available for low-income customers at risk of having their source of heat shut off. Since Jan. 3, about 20,000 benefits went out for a total of $17.8 million this winter.
Households that receive HEAP help, however, aren’t eligible for utility assistance through the state’s Emergency Rental Assistance Program, or ERAP, which offers limited one-time utility arrears payments for those who also received rental assistance.
About 72,000 customers have applied for utility assistance, with about $4 million of payments made on behalf of 3,200 households, since June 1, according to OTDA. While ERAP is still accepting applications, no new applications for ERAP will receive assistance in most regions of the state because of a lack of federal funding.
“We continue to work with utility companies to identify those accounts that are linked to utility assistance in order to prevent eligible tenants from facing disconnection while their application is pending,” OTDA spokesperson Anthony Farmer wrote in an email.
The $366.7 million statewide energy affordability program also provides discounts on eligible customers’ utility bills. New Yorkers received about $153 million in discounts since September through this program, which is funded via a small charge in every customer’s bill. Some households are automatically enrolled based on participation in programs like HEAP, food stamps, or Social Security, while others can apply if they’re already getting government benefits like Medicaid, for instance.
But all those programs still fall short of New Yorkers’ utility needs, Berkley said.
Representatives from AARP and the Public Utility Law Project last month asked Gov. Kathy Hochul to include in her budget $1.25 billion toward energy utility back payments, suggesting the funds would come from the $12.25 billion for COVID relief the state received from the federal government.
Madia Coleman, a spokesperson for the governor, did not directly address the budget request but said in a statement, “The state continues to work with customers and utilities to ensure our most vulnerable people, including low-income customers, are protected against shutoffs and we will continue to explore ways to provide relief to households and businesses following the COVID-19 pandemic.”
‘A Perfect Storm’
Liz Jackson, like other Con Ed customers, saw her electric supply charge more than triple from one month to the next at her Fort Greene studio, raising her bill from $46 to $70 for the month.
Jackson, 39, is enrolled in a payment program for catching up on almost $800 of unpaid bills, which means she pays an extra $31 per billing period to pay down the debt.
Since March 2021, she’s been in Con Ed’s low-income discount program, which takes $23.83 off her bill each period. But, she noted, the discount amount stays the same even as the bill changes what she owes.
“In the short term, it’s not going to set me over the edge,” she said. “You have multiple things happening right now… you have energy bills increasing, rents are increasing everywhere and to me, it feels like a perfect storm. If this is something that continues on, I don’t know what I’ll do.”
Jackson is chronically ill and can’t work full time. She got onto Medicaid and began receiving SNAP benefits after her work dried up at the beginning of the pandemic, but she’s feeling the squeeze.
Situations like hers across the city have the potential to further deepen lines of inequality, as it’s been shown that low-income and non-white households spend a greater portion of their income on utilities.
“The most significant impact of rising prices is on low-income communities and communities of color, who have been hit hardest by the pandemic,” said Jasmine Graham, an energy justice policy manager with the nonprofit WE ACT for Environmental Justice.
Con Ed says it is reviewing its billing practices in response to a letter sent last week from Christian, the PSC chair.
The review will include “our energy-buying practices, the tools we use to reduce supply price volatility, the way we communicate changes in supply prices, and our programs to help customers who have fallen behind on their bills,” according to spokesperson Allan Drury.
In his letter, Christian specifically noted Con Ed’s need to improve its communications with customers and the one of the practices involving price forecasting.
Con Ed, like all utility companies, bills customers for what it predicts it will pay for the energy from suppliers. Subsequent adjustments on the bill bridge the gap between the energy prices Con Ed forecasted and what it actually paid.
That means too high of an estimate can result in a credit, and too low of an estimate means an extra charge on your bill. The hedging can save customers money in the long run but can also lead to volatile bills.
Residential Con Ed customers in New York City can expect a bit of a reprieve as a result of the forecasting methods: a net credit of about 7 cents per kilowatt-hour on their bills, effective Feb. 11, according to a filing Con Ed submitted to the PSC on Feb. 8.
Con Ed declined to provide additional details on the filing.
It may only be a fraction of the total bill, but it is still one of the largest per-kilowatt-hour adjustments in customers’ favor since at least January 2019, experts noted.
“The reconciliation should be minimal,” said Kevin Engelman, director of operations at Mayflower Power and Gas, an energy supplier based in Long Island.
“Either they grossly overcharged in the past, where they need to credit, or because rates are so high right now, they might just be including this credit now and in the future they’ll include a penny charge for a few months just to recollect.”