TRAVERSE CITY – Utilities are seeing unpaid bills and disconnections increase, and they are seeing those delinquencies from higher income customers, utility officials told those gathered for the Mid-American Regulatory Conference. But, while utilities are covering some of the efforts to assist those customers now, those efforts will have to move back to the government at some point.
Where most delinquencies on utility bills in the past, at least those getting to point of disconnection, were from low-income customers, more of those delinquencies are among middle-income customers, said Rebecca Harsh, director of consumer retail policy for the Edison Electric Institute, an electric utility industry group. She said many of those customers are not in any kind of assistance program.
“It’s the first time they find themselves in this situation. Many of them are afraid to ask (for help),” she said. “They do not qualify for a lot of the federal programs that are out there, so they are kind of floating out there in the middle of nowhere and struggling to meet their bills.”
She said several utilities have expanded budget programs and discounts to customers making more than 250 percent of federal poverty. But she said there has been little effort to help fund these programs.
“Everybody wants to do something about it but the funding isn’t there,” she said. “There hasn’t been any kind of significant move from legislators to meet the need of these new individuals.”
“The trend short term is utilities doing more social programs,” said David Springe, consumer counsel to the Kansas Citizen’s Utility Ratepayer Board. “But as you look long term is the utility going to be the social agency and how much can we expect of utilities? If utilities going to provide all this, we need to pay for it.”
Harsh said a number of utilities are working to find other, particularly non-government, sources of funding for assistance programs to be able to expand them beyond the current limits. But she said utilities are also working with community organizations and others to make more people aware of the programs to encourage people to seek assistance.
Utilities are also seeking ways to head off the need for payment assistance. Many are pushing for building code changes that would reduce energy use, particularly for low-income residents. “We have to fix it on front end by having people live in homes they can actually afford to live in,” said Jerry Norcia, president of Michigan Consolidated Gas Company. “The next question is how do you move people into homes where they can afford the energy.”
Springe said those codes also need to apply to rental homes as well as owner-occupied. “There needs to be a minimum level of efficiency that comes with being a landlord,” he said. But he said it also would require both enforcement and assistance to achieve.<>/p>
States also need to consider a low-income rate, Springe said. “We are going to have a group of people that we are simply going to have to pay for,” he said. “Should we have a low-income rate that keeps these people on the system?”
He noted Kansas has answered that question no, arguing the proposed rate was discriminatory.
Springe said one option to address both low-income customers and coming rate increases by setting a low rate for some minimum amount of power and move the rate increases to those who use more. “We’ve got to get our rate design principals sorted out. We’re not pricing things right,” he said.
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