Soaring Electricity Prices Lead 20 Million US Households To Fall Behind On Utility Bills
The United States is facing a “tsunami of shutoffs” as 20 million households, or about 1 in 6 American homes, can’t afford to pay for their power bill, according to Bloomberg. The soaring price of electricity, amid a global energy crunch, has led to what the National Energy Assistance Directors Association (Neada) is said to be the worst-ever crisis in late utility payments.
The average price of household electricity surged 15% in July from a year earlier, marking the biggest 12-month hike since 2006.
The rising power costs, coupled with shrinking purchasing power from inflation, have pushed the collective utility bill balance to $16 billion in June, compared to $8 billion in December 2019, and $11.7 billion in December 2020.
According to Bloomberg, California’s PG&E Corp. (NYSE: PCG) reported a 40% jump from February 2020 in the number of households behind on their payments. New Jersey’s Public Service Enterprise Group (NYSE: PEG) meanwhile reports a spike of 30% for households that are at least 90 days late.
“I expect a tsunami of shutoffs,” Jean Su, a senior attorney at the Center for Biological Diversity, told Bloomberg. The center tracks utility disconnections across the US. These shutoffs can have dangerous, sometimes deadly, consequences, especially as summer heat continues to shatter records.
The urgency of the situation has caused an uptick in calls for states and the federal government to offer assistance. In early August, about 60 US representatives and senators asked for additional emergency funding on top of the $4 billion allocated for Liheap for the fiscal year 2023. California, meanwhile, has just passed a budget that allocates $1.4 billion to assist residents with past-due utility bills.
But temporary government assistance won’t end the pain of rising electricity costs. With rising prices, and heat waves pushing the need for more energy, the crisis in late utility payments may just be getting started.
Information for this briefing was found via the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
