COVID Created New Class of Struggling Customers at Risk of Shutoffs
BOSTON – According to a new analysis from the National Consumer Law Center (NCLC), Massachusetts residential utility customers are increasingly falling behind on their utility payments and are at increased risk of having their utilities shut off– with record winter fuel prices on the way.
In “COVID-driven Arrearages and Rising Energy Prices Increase Risk of Utility Shutoffs,” advocates at NCLC find that COVID-19 severely impacted hundreds of thousands of customers’ ability to pay their bills and created a new class of struggling residential customers who previously were able to pay their bills but fell behind due to the pandemic.
“More assistance is needed to keep struggling consumers connected to essential utility services this winter and keep customers from falling too far behind,” said Anna Kowanko, NCLC research and data associate and co-author of the report.
The percentage of residential households that are significantly behind on their bills is much larger than when COVID arrived: 52% of standard rate customers are more than 90 days in arrears as of July 2022 (compared to 36% in March 2020), and 75% of discount rate customers are more than 90 days in arrears as of July 2022 (compared to 62% in March 2020). Standard rate customers appear to be hit particularly hard, as their average arrears have increased 32% since March 2020 (from $903 to $1,191).
“Standard rate customers are far less likely to know of the assistance that may be available to help with paying utility bills,” said Charlie Harak, staff attorney at NCLC and co-author of the report. “Additionally, these customers will remain at high risk of disconnection throughout the winter as they are not automatically protected by the income-limited winter moratorium on terminations beginning mid-November.”
The report recommends that state and federal governments make more money available for the Low-Income Home Energy Assistance Program (LIHEAP). In addition, the state and utility companies must expand outreach efforts so that struggling customers are aware of how to receive assistance.