The Wall Street Journal provides yet another indicator of strained consumer budgets. More and more are having trouble paying their utility bills, precisely when the service providers are getting tougher about collections:
Utilities are becoming more aggressive about collecting money from delinquent customers, leading to a surge in service shutdowns just as economic woes are pushing up the number of households falling behind on bills.
The utilities say they are under pressure to clean out accounts that are weighing down their books at a time when their stocks are being hammered and earnings growth has slowed.
Meanwhile, the increasing number of homes left without power — which could rise as economic pain deepens — is beginning to worry some consumer advocates and regulators.
In Pennsylvania, PPL Corp. increased shutoffs by 78% in the first three quarters of the year compared with the same period a year earlier. Shutoffs at electric utilities throughout the state increased by 20% in that period. George Lewis, a spokesman for PPL, based in Allentown, Pa., said the utility had been somewhat lax in the past but decided this year to “reverse the trend and prevent people from getting further in debt” by cutting them off sooner. About 3% of the company’s residential accounts have been disconnected for delinquency.
In Memphis, Tenn., the city-owned utility that supplies electricity, natural gas and water to residents cut off 38% more people in the first eight months of the year,…
One bright spot is that many utilities will have more money to distribute next year to poor customers through the Low Income Home Energy Assistance Program. Congress boosted the program’s funds for the current fiscal year by 78% to $5.1 billion. Many utilities are trying to get the word out that people should apply because eligibility rules have been expanded, allowing people with higher incomes to qualify.
State regulators say they have noticed that power shutoffs have moved up the economic chain. “We’re seeing an uptick in middle-class people who have never been in this situation before,” said Eric Hartsfield, director of the customer-service division of the New Jersey Board of Public Utilities.
New Jersey’s biggest utility company, Public Service Enterprise Group Inc., said it saw a 10% increase compared with the year earlier in uncollectible natural-gas accounts, and slightly less on the electric side…
Rising delinquencies are occurring across the country. In New York, the amount of money utilities are owed on accounts at least 60 days past due jumped 22%..Michigan has experienced a nearly 39% increase in electricity disconnections this year compared with last.