When the pandemic led to lockdowns that triggered huge job losses, people in New York City and the surrounding region accumulated a mountain of debt. For many that included utility bills. Residents of New York and New Jersey owe the staggering sum of more than $2.4 billion to utility companies.
Now those companies are using the threat of shut-offs to collect for the first time in two years, and advocates fear that struggling utility customers will have to choose between heat and electricity and other necessities like food and medicine.
At the start of the pandemic two years ago, as millions of unemployed Americans were unable to pay their bills, state-imposed moratoriums generally barred utilities from shutting off power. But most states, including New York, have lifted those restrictions in recent months. New Jersey’s moratorium, one of the last in effect, expired on March 15.
In New York, advocates have pleaded with Gov. Kathy Hochul and state lawmakers to use federal pandemic aid to bail out residents who cannot pay. Without a bailout, the state faces “the largest tidal wave of shut-offs in New York history,” said Richard Berkley, executive director of the Public Utility Law Project, an advocacy group.
The end of government protections has put utility companies in an unpopular position. They are issuing shut-off warnings while inflation is pushing up the price of many goods, and monthly charges for heat and electricity have soared in recent months.
Making matters worse, the war in Ukraine has reduced the global supply of oil, driving the price of gasoline near all-time highs and adding volatility to the natural gas market.
The shutdown last year of the Indian Point nuclear power plant, which once provided as much as 25 percent of the power consumed by New York City, has also contributed to surging utility bills because it has made the region more reliant on natural gas. Most homes in the region are heated with gas, and many of the biggest generators of electricity in the region are fueled with it.
When customers of Consolidated Edison in New York City and its northern suburbs complained about sharp increases in their bills this winter, the company said the main cause was a spike in the price of natural gas driven by winter demand.
But skeptical elected officials demanded an investigation into Con Edison’s billing practices, leading the company to take the unusual step of discounting the power it distributed in February.
For companies like Con Edison, pulling the plug on customers who fall behind in paying their bills is usually a last resort, which it typically avoids during the coldest months. But for most of the last two years, as the pandemic inflicted widespread financial hardship, overdue utility payments have soared.
Nationally, the total level of arrears to utility companies is about $22 billion, after peaking at about $32 billion in the spring of 2021, said Mark Wolfe, executive director of the National Energy Assistance Directors Association.
But that is still significantly higher than before the pandemic, when debt totaled about $12 billion. In New York and New Jersey alone, more than two million customers are in debt to companies that provide electricity, heat, water and broadband.
Con Edison says it has held off on disconnecting residential customers and small businesses. But on Wednesday, New Jersey’s largest power distributor, PSE&G, started sending representatives to shut off electricity of customers who had not responded to multiple warnings and whose bills were more than 90 days past due, a company spokeswoman said.
Advocates worry that many vulnerable customers, especially the poor and older people, will be left in the dark or saddled with obligations they can never repay. Many who owe large amounts are working-class people like Marisol Rivera, who fell far behind after being out of work for most of the last two years.
Ms. Rivera, a single mother of two who lives in Brooklyn, owes Con Edison more than $3,300.
Even though utilities in New York state are no longer prohibited from disconnecting delinquent customers, “the last thing that we want to do is to shut anybody off,” said Jamie McShane, a spokesman for the company.
Instead, they try to work out repayment plans over a period of months or even years. Or, as in Ms. Rivera’s case, longer than that.
After finding work as a receptionist in November, Ms. Rivera, 35, got help from the Public Utility Law Project in arranging an unusual payoff term. She made a down payment of $150 and agreed to pay monthly installments of $10 for the next 27 years.
“That will take a lot of weight off me,” she said, though she expressed uncertainty about how she would stay current on her utilities, given that she is also behind on the $1,800 monthly rent on the “little one-bedroom” she shares with her 13-year-old daughter and 9-year-old son.
“To live in New York, you have to be making a big amount of money to survive,” Ms. Rivera said. “I’m constantly trying to fight and to dig out of a hole that I’m in.”
Jackie Huba, who manages the careers of drag artists, fell behind on her power bill for the first time this winter. Ms. Huba, who moved to Harlem from Texas last summer, was stunned when Con Edison sent her a monthly bill for $891 in January, double what she had paid just two months before. It includes electric heat.
“I knew New York was expensive, but I didn’t expect any kinds of bills like this,” she said. “This is not a bill that I can afford to pay.”
Ms. Huba said she paid $500 toward the $1,400 she owed Con Edison in hopes of averting a shutoff notice.
In the cold spell that followed a mild December, the cost of electricity in the New York City region jumped 28 percent in January, according to the federal Bureau of Labor Statistics. The increase in energy costs in the region paralleled the rate of inflation for energy nationwide, the bureau’s data show.
Electricity costs did decrease in February, the bureau reported, and one factor may have been Con Edison’s decision to reduce what it charges for supplying power, by 8.8 cents per kilowatt-hour, following the outcry over high bills. The company also pledged to change its billing practices to avoid surprising customers again.
The unpaid bills have piled up in New Jersey, too. About 1 million customers are behind on their payments, owing about $700 million, according to the state’s Board of Public Utilities. On March 15, state officials warned customers of potential shut-offs.
“There are a significant number of residents who are in danger of having their services cut off after today, and that is why we’re continuing to ask utility companies to work with people as they apply for assistance — but they must apply for help,” said Lt. Gov. Sheila Oliver.
New Jersey has used $250 million in federal pandemic relief to expand programs to help people pay down, or even eliminate, their utility debts.
One beneficiary is Mieko Inghilleri, a public school teacher who lives in a drafty rental house in Lawrenceville, north of Trenton. Ms. Inghilleri, 33, said she could not keep up with the hefty bills she received this winter from PSE&G, her electricity provider.
She and her fiancé kept three space heaters going to supplement the heat supplied by their oil-burning furnace. The electric bill alone for January was nearly $600, she said. On top of that, the price of the oil, supplied by a different company, has increased with each delivery.
As winter dragged on, she fell further behind, owing PSE&G about $2,800. She feared the end of the moratorium and the choices she would face to avert having her power cut off.
“There would have been no way that I can get paid up by then,” Ms. Inghilleri said. “I’m a teacher, so I make an OK salary. But I’m not rich.”
After hearing about the state’s assistance programs, she reached out to the Affordable Housing Alliance in Monmouth County, which counsels New Jersey residents on how to seek help in paying rent and utility bills.
Kathleen Kerr, the alliance’s director for utility assistance, said she was “waiting for the bombardment” of calls from people who had gotten shut-off notices. Many people, she said, wait to ask for help until they are on the brink.
Ms. Inghilleri said she had never fallen so far behind on any bills that she had to seek assistance. But Ms. Kerr had good news, telling her that she qualified for the state’s Fresh Start program. All she has to do is pay her current bill on time every month for a year, and her debt to PSE&G will be forgiven.
“That would be extremely helpful and take a lot of stress off me,” Ms. Inghilleri said.
