There Could Be an Energy Bill Debt Tsunami, Too

Originally published in City Lab on February 4, 2021.
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When the pandemic hit in March, as millions lost jobs and struggled to pay their bills, 34 states ordered mandatory moratoriums on utility shutoffs — measures that were all more critical as families were asked to stay home. The lockdowns translated into higher utility bills: One economist estimated that residential electricity use spiked 10% on average between April and July 2020, leading to households spending nearly $6 billion on extra usage. Another home energy monitoring company reported that April demand increased 22% from 2019.

Yet despite the need never dissipating, most states eventually lifted their utility shutoff moratoriums; by the end of October, just 16 states and Washington, D.C., had active moratoriums in place, covering 40 percent of the U.S. population, according to the National Energy Assistance Directors’ Association. Other states regularly halt utility shutoffs in winter, or when the temperature reaches a particularly cold level. NEADA estimates that 13 states are now relying primarily on these annual seasonal respites. 

Even in households that still have their heat on and water running, millions of customers are racking up significant debts as unpaid bills mount. And advocates worry that shutoffs, like evictions, are just being kicked down the road. 

new economics working paper from Duke University released last week underscored the public health dimension of their concerns: Researchers estimated that, had Congress implemented a nationwide moratorium on utility shutoffs between March and November, Covid-19 infections could have been reduced by 8.7%, and Covid-19 related-deaths by almost 15%. The patchwork of shutoff moratoriums that did exist during that time, the economists found, reduced infections by nearly 4%, and mortality rates by 7.4% by making it easier for people to shelter at home. Without water or electricity, households can be forced to stay with relatives or other families, exacerbating crowding and disease transmission. “Ensuring that people have access to housing and essential services for water and electricity within their housing is necessary in any adequate government response to the housing precarity created by the COVID-19 pandemic,” the researchers wrote. 

On Jan. 13, more than 600 organizations sent President Joe Biden and Vice-President Kamala Harris a letter urging them to authorize a nationwide shutoff moratorium on water, electricity, broadband, and heat. Such a national ban on utility shutoffs was included in both versions of the House Democrats’ HEROES Act, which passed in May and October. But despite authorizing a national eviction moratorium on his first day in office, Biden has so far resisted calls to extend the ban to utilities: Instead, he’s asked Congress to authorize another round of stimulus relief, with $25 billion in rental assistance and $5 billion for energy and water assistance. 

Utility companies have been unenthusiastic about shutoff moratoriums. In the  Washington Post last week, Adam Benshoff, vice president for regulatory affairs at the Edison Electric Institute, which represents investor-owned electric utilities, said that “customers with unpaid bills will not work with their electric companies on a payment plan until they receive a disconnection warning.”  (EEI did not respond to CityLab’s request for comment.) 

NEADA executive director Mark Wolfe told CityLab that while Biden’s proposal would surely help, they are concerned that the $25 billion in funding for renters will do little for homeowners who are behind on their bills. “We are also concerned that local agencies that will be charged with administering the funds might not have the resources to coordinate the payment of rent and utility, and as result only rental bills will get paid,” he said.

Different estimates of outstanding debt abound. Wolfe estimates between 9 million and 12 million households have unpaid bills, with those households being on average $6,500 behind on rent and utilities. A Moody’s Analytics report released in January estimated Americans’ back rent stood at $57 billion. Chief economist Mark Zandi said the average “delinquent renter” will owe $5,600, as they’ll be almost four months behind on monthly rent of $1,130 and utilities of $290. 

Clear data can be hard to come by. Civil rights groups like the NAACP have long called for federal reporting requirements on utilities, but most states do not require electric or gas providers to disclose how customers are accessing or retaining services, and utility companies have historically fought efforts to publish the information, aware of the public relations fallout that disclosing shutoffs could bring. In a report published in August, Michael Thomas, founder of the energy-efficiency startup Carbon Switch, mined data from state websites on expiring utility moratoriums to find that 34.5 million households would lose shut-off protections in the next month, leaving 9.5 million unemployed people at risk by Oct. 1. In a second report from October, he found that four states did let their moratoriums expire in September, affecting 16 million households, with 2.3 million of those below the poverty line before the pandemic started.

Charlie Harak, a senior attorney for energy and utilities issues at the National Consumer Law Center, says it’s also impossible for advocates like him to know exactly how many homeowners are behind on their utilities because companies don’t disclose arrearages by homeowners versus renters. Harak is based in Massachusetts, which has better reporting requirements than most other states. As of November, he says, 500,000 residential customers in his state were more than 90 days in arrear, owing an average of $1,000. “When our state moratorium ends, that’s a big number,” he said. “These families are at high risk of being terminated.”

Harak has been working to figure out how much money would be needed nationwide to address the outstanding utility debt, largely by extrapolating from Massachusetts’s data. “If you’re trying to pay down 100% of the arrearages — which is a better situation than pre-Covid, or if you’re trying to pay down the percentage needed so people don’t get shut-off, I think it’s reasonable to assume the number is between $10 billion and $30 billion, and that’s not including money for broadband or water.”

For now, cities have been trying to leverage federal stimulus money by establishing emergency funds for residents. In Columbus, Ohio, for example, the city awarded grants of up to $750 for water bills, and up to $500 for power bills. In Henderson, Nevada, residents could apply for aid up to $1,000 for utilities, and up to $360 for internet.

In December NEADA and 31 other groups representing state and local energy organizations sent a letter to congressional leaders asking for an additional $10 billion allocated to the federal Low Income Home Energy Assistance Program (LIHEAP) to help up to 7 million families pay off their utility debt. Prior to Covid-19, they noted, approximately 26 million households were eligible for low-income fuel assistance. NEADA projected in December that an additional 5 million households would be eligible for LIHEAP “as a direct result of virus-related layoffs.”

Bolstering money to LIHEAP, the energy groups said, is better than the alternatives, where utilities could offer repayment plans, but those could take households years to pay off, and slow families from getting back on their feet. Alternatively, utilities could raise rates on all their customers to cover the arrearages, which also would mean further strain on households after the pandemic.

On Jan. 28, Democratic representatives Annie Kuster and Peter Welch responded to that call, introducing the Energy Debt Relief for American Families Act, focused exclusively on trying to help families bring down their utility arrearages. The billwould likely not cover the full scope of need, but would provide $10 billion to states to pay off debts through LIHEAP. (Up to 15%  percent of those funds could be spent on administrative purposes, like contacting eligible families to make sure they know relief is available.)

As the pandemic stretches deeper into winter, advocates haven’t given up hope of a national shutoff ban, and the new Democratic majority in the Senate gives them the ability to get it through a budget reconciliation process. And the timing might be right, especially when paired with momentum for an eviction ban. Senate Majority Leader Chuck Schumer endorsed the utility shutoff measure last year, as did Harris, before joining the White House. Senator Jeff Merkley, who introduced the Emergency Water and Energy is a Human Right Act in July, told the Washington Post he wants the president and his colleagues “to use every available tool at our disposal to put in place a national disconnection moratorium.”

The Other Race on Georgia’s January Ballot

Originally published in The Intercept on November 23, 2020.
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WHEN GEORGIA VOTERS cast their ballots in the U.S. Senate runoffs, with Democrats Jon Ossoff and Raphael Warnock facing off against Republicans David Perdue and Kelly Loeffler, they’ll also be weighing in on another statewide contest that had no clear winner on November 3: public service commissioner.

The Georgia Public Service Commission — a relatively obscure but highly consequential five-member body — makes important decisions like setting rates on Georgians’ electric bills and determining state investments into renewable energy. The commission has been controlled for years by Republicans who sit six-year terms, but this year District 4 Commissioner Lauren “Bubba” McDonald fell just shy of the 50 percent needed to win reelection, with Democrat Daniel Blackman earning 46.9 percent of the vote.

One of Blackman’s central campaign arguments is that the Public Service Commission has been too friendly to utility companies at the expense of customers and has not made fighting climate change an urgent priority. Georgia Power, a subsidiary of Southern Company and a regulated state monopoly with 2.6 million customers, has pushed the commission to charge higher rates even as Southern Company earns billions in profit. Georgia Power is also a major producer of coal ash, toxic residue created when coal is burned by power plants to produce electricity. Environmental activists have been pushing resistant state lawmakers to enact tougher regulations over coal ash storage, and they see the election of Blackman, a politician willing to speak out against Georgia Power, as a way to bolster their campaign.

Blackman said he knows no one in the state party really expected him to make it to the runoff, and his campaign didn’t depend on the party, either, which was focused on the U.S Senate and presidential races. “Democrats get excited when there’s a big election, but we have a real chance now to appeal to voters who have felt disenfranchised for a long time,” Blackman said, adding that his platform of “energy security, energy equity, and lower rates” has been a way to bridge coalitions between Democrats, Republicans, progressives, moderates, and those who never vote at all.

THE STATEWIDE Public Service Commission runoff was originally scheduled for December 1, but on November 11 Georgia Secretary of State Brad Raffensperger announced that due to the ongoing election disputes, the planned presidential recount, and the two U.S Senate runoffs, he would be postponing the commission runoff to make it easier for election workers.

Supporters of Blackman, like Travis Town in Troup County, Georgia, are relieved that the runoffs will be combined on one ballot, since it would likely boost turnout for the commissioner vote. “I don’t think people are informed about the PSC, the majority of folks are just eking out day-to-day existence,” Town said. “I was worried about that election being right after Thanksgiving.”

Blackman, who has advised the Congressional Black Caucus and the U.S. Environmental Protection Agency on environmental justice issues and served as Georgia’s political director for Sen. Bernie Sanders’s 2016 presidential bid, said he will also be an advantage to Warnock and Ossoff, because his contest deals with issues directly of concern to disenfranchised voters.

Blackman pointed to a recent study from WalletHub that found Georgia has the eighth-highest utility rates in the country and the fifth highest electric rates. “Everyone has an electric bill,” he said.“When you look at Warnock and Ossoff, their biggest arguments are the [Affordable Care Act], the Supreme Court, and election protection. No disrespect at all to those, but a lot of average people at their dinner table aren’t talking about that — but they are talking about their grandmother and grandfather on a fixed income with their lights about to be cut off.” Blackman also noted that many young voters are single-issue voters on climate, and the Public Service Commission has direct influence over investments into areas like solar energy. “What we are able to do is add value to the Democratic argument as it relates to climate change,” he said.

McDonald, who is 81 and would be 88 at the end of his next term if he wins, was originally appointed to fill a vacant commissioner seat after serving 20 years as a state representative. While he has touted his work in pushing the commission to invest in solar, advocates say he has not used his platform to make fighting climate change a top priority, including pushing back on some of the anti-climate measures coming from the Trump administration.

The PSC Accountability Project, an effort led by the Georgia Conservation Voters Education Fund and the Georgia Ethics Watchdogs Education Fund, has said that 85 percent of McDonald’s contributions have come from companies and people that may profit from the commission’s decisions. Utility companies can’t donate directly to commissioners’ campaigns, but individual employees can. McDonald told The Intercept that he could not comment for this story due to being tied up with hearings this week, though in October he told the Atlanta NPR affiliate that he’s not influenced by the industries he regulates. “As far as the influence of minor contributions, it’s no more than my neighbor giving me a contribution, or people in my church, or people that know me, it’s all within the framework of the laws,” he told WABE. “I’m not an expert in every area of the world, and when they bring advice, I listen. I listen to both the negatives of those and the positives of those, and at some point in time, I make a decision.”

One of Blackman’s central campaign arguments is that the Public Service Commission has been too friendly to utility companies at the expense of customers and has not made fighting climate change an urgent priority. Georgia Power, a subsidiary of Southern Company and a regulated state monopoly with 2.6 million customers, has pushed the commission to charge higher rates even as Southern Company earns billions in profit. Georgia Power is also a major producer of coal ash, toxic residue created when coal is burned by power plants to produce electricity. Environmental activists have been pushing resistant state lawmakers to enact tougher regulations over coal ash storage, and they see the election of Blackman, a politician willing to speak out against Georgia Power, as a way to bolster their campaign.

Blackman said he knows no one in the state party really expected him to make it to the runoff, and his campaign didn’t depend on the party, either, which was focused on the U.S Senate and presidential races. “Democrats get excited when there’s a big election, but we have a real chance now to appeal to voters who have felt disenfranchised for a long time,” Blackman said, adding that his platform of “energy security, energy equity, and lower rates” has been a way to bridge coalitions between Democrats, Republicans, progressives, moderates, and those who never vote at all.

Another area climate activists have expressed frustration with Public Service Commission members is around two nuclear reactors under construction at Plant Vogtle in Burke County. Blackman himself calls the project “one of the most fiscally irresponsible decisions in Georgia,” demonstrating how he employs rhetoric that appeals both to progressives and conservatives. Originally approved by state lawmakers in 2009, the Georgia Nuclear Energy Financing Act permitted Georgia Power to charge customers in advance for the construction of the two nuclear reactors, adding roughly $10 a month to an average customer’s bill. But today, the reactors are years behind schedule and billions over budget, and Blackman said thanks to the commission, ratepayers will have to pay those overruns in the form of even higher Georgia Power energy bills. “The Republicans on the PSC have approved every single Plant Vogtl monitoring report and every single integrated resource plan and every single budget for the last decade,” he said. “Those decisions were made to keep a very small group of folks in the utility industry very wealthy.”

In December 2019, the Public Service Commission voted to raise the rates of Georgia Power utility bills by $1.8 billion over three years. While this was less than what Georgia Power requested, commissioners approved the rate increases, saying they wanted to ensure that the company remained successful as it made new investments. The average customer saw their energy bill rise by about $6 per month in 2020, and will see another 2 to 2.5 percent increase in 2021 and another 4.5 to 5 percent in 2022. John Kraft, a spokesperson for Georgia Power, cited federal tax credits and interest savings from Department of Energy loan guarantees as ways the company has “actively pursued customer benefits” to reduce the impact to consumers. The loan guarantees, he said, will save customers “approximately $550 million in financing costs overall.” Kraft also emphasized that the company does not endorse political candidates.

“Folks don’t want to pay higher power bills, and Georgia Power doesn’t need the money,” said Brionté McCorkle, executive director of Georgia Conservation Voters, which has endorsed Blackman. “But they keep getting the PSC to do these things, and it just hurts the consumer.” Utility costs have become an even more serious issue for consumers during the Covid-19 pandemic; Georgia Power ended its pandemic utility shutoff moratorium in mid-July, and nationwide activists have been trying to raise awareness about the public health implications of utility disconnections.

In 2019, Southern Company CEO Tom Fanning’s pay jumped 30 percent, up $3.7 million in a single year. His total take-home compensation last year was $27.9 million.

ADVOCATES SAY Georgia Power’s resistance to being regulated is one reason state House Minority Leader Bob Trammell, the rare Democrat representing a rural Georgia district, lost his election in November. Trammell, a moderate first elected in 2014, held his seat in 2016, even as his district voted for Donald Trump, and in 2018, when his district voted for Republican Gov. Brian Kemp. Trammell’s seat became the Republican State Leadership Committee’s top target in the country this past cycle, with millions spent on electing Trammell’s opponent, David Jenkins. It was the most expensive statehouse election in Georgia history.

Trammell drew the ire of Georgia Power over the last year, as, among other things, he supported environmental advocates who have been calling to store coal ash in lined landfills. While Georgia lawmakers passed one bill this year — SB123 — that fixed a loophole that had made it cheaper to dump coal ash than regular trash, meaning that millions of tons of coal ash from neighboring states were being dumped in Georgia, the state legislature resisted Trammell’s bill — HB 756 — which would have required coal ash to be disposed of in lined pits. Georgia Power has been planning to excavate 10 of its 19 ash ponds into unlined pits, which advocates say do not adequately protect water sources.

Kraft, of Georgia Power, said the company has “worked with third-party professional engineers and geologists to design our plans on a site-by-site basis considering size, location, amount of material and the geology of the area among other factors.” He added that each closure design “is unique and designed to meet” state and federal coal ash standards. Environmental advocates plan to campaign again in the next legislative session for lined pit storage.

Residents from the rural city of Juliette, where a coal ash pond sits in contact with groundwater, traveled to the state capitol in February to advocate for Trammell’s bill and raise awareness of the contaminated water in their community. Georgia Power denies that its coal ash pods contributed to Juliette’s toxic water. In August, residents of Juliette filed a lawsuit against Georgia Power, alleging that the company polluted their water with coal ash. “Plaintiffs suffer from cancer, disorders of the cardiovascular, immune, renal and urinary, and respiratory systems; neurological, thyroid, liver, skin and cell damage; and developmental disorders, in addition to other personal injuries,” the complaint reads. “The cancer rate in Monroe County … is more than double the state and national averages. And Plaintiffs’ property values are devastated because of the contamination.” Georgia Power denies wrongdoing and the case is pending.

Blackman and his supporters say the Democratic Party needs to recognize that issues like fighting climate change and lowering utility rates have the potential to build broad coalitions capable of defeating well-funded conservatives, and there needs to be more attention paid to down-ballot races.

“It’s called the Public Service Commission because it serves the public,” said McCorkle. “What matters here is doing the right thing for the people of Georgia.”