Shut-offs – Rising Again, Years into Great Recession

What’s at Stake

Five years into the Great Recession terminations of utility service to New Yorkers appear to have bottomed, going up in 2012 for the first time since 2009. If this is a trend reversal, it’s bad news for low and fixed-income ratepayers.

Of particular concern are the numbers of customers having difficulty paying bills, namely those in arrears (950,000+), under active deferred payment agreements (390,000+) and having their accounts terminated (263,000+).

These numbers were all higher in 2012 than at the start of the Great Recession in 2007, as were the total number of final termination notices issued (6.7 million+), often more than one per customer.

Key Issues

Utility service is an absolute necessity of life. It doesn’t discriminate based on income level. Lives are threatened when households don’t have safe, reliable access to electricity, heating, and water supply. Society pays dearly when terminations occur. These added costs are reflected in higher emergency public assistance and medical care, increased homelessness, the illness or death of vulnerable people, and the cost of putting out fires due to the use of other means of light and heat such as the use of candles.

Action must to be taken to permanently reduce utility terminations

New York State officials must act now to permanently reduce utility terminations throughout the state. To accomplish this, steps should be taken to:

Strictly enforce consumer protections against termination as provided under the Home Energy Fair Practices Act (HEFPA);

Investigate practices that undermine HEFPA, such as deceptive marketing techniques by some energy service companies (ESCOs), and eviction-friendly sub-metering arrangements by some landlords;

Expand service quality standards to measure and reduce the number of service interruptions for collection purposes;

Reduce energy burdens on the poor through improved low-income discount programs; and

Improve utility and public assistance programs for households at risk of termination.

Do something about New York’s high utility prices

New York’s utility prices, among the highest in the U.S., are unaffordable for an ever-increasing number of ratepayers. In order to stop the rise in the number of ratepayers with trouble paying bills, policy makers and regulators must explore the reasons why New Yorkers pays so much for utilities. Then they must take steps to correct the problem. Some places to start looking include:

Legacy costs of utilities deferred for future recovery from ratepayers. These include the costs of pension and other post-retirement benefits, the cost of decommissioning nuclear power plants, and environmental clean-up;
Wholesale energy market practices that purport to introduce competition into energy pricing but only distort, through the use of financial derivatives and market manipulation the true cost of energy supply;
Other de-regulation schemes – introduced in the name of “choice” – such as competitive retail energy supply, usually resulting in only confusion, higher prices and less consumer protection;
The cost of new investment to expand and shore up utility infrastructure; and
The ever-increasing level of utility taxes and surcharges that don’t wind up serving their original stated purposes.

Find all PSC filings in the PSC case files for the following cases

Con Edison Rates (Case 13-E-0030)

Aspects of the Residential and Small Non-residential Retail Energy Markets in New York State (ESCOs, Case 12-M-0476)

National Fuel Gas Rate (Case 13-G-0136)

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