NCLC Report Spotlights Growing Problem of Unpaid Utility Debts

A big bill is coming due soon for a lot of people across the country who are likely to end up hearing from debt collectors but are probably not going to be able to repay the debt, according to a report from the National Consumer Law Center. The NCLC’s report did a deep-dive into the issue in one state, highlighting how the moratoriums that have been placed on utility payments during the COVID-19 pandemic have sent the amounts owed by consumers through the roof with no set plans about how to address the situations when those moratoriums end.

Looking at Massachusetts specifically, the report reveals that “hundreds of thousands” of consumers will be behind on their utility payments when a shutoff moratorium ends on April 1. While the number of individuals in arrears decreased between November 2019 and November 2020, the average amount owed by residential customers who were between 30 and 60 days late on their payments increased by 38% and by 86% for individuals who were between 60 and 90 days late, according to the report. For those who were at least 90 days late, the number of residential customers in arrears increased by 45% and the average amount owed jumped 24%.

“The COVID-19 pandemic has not only placed massive financial strain on low-income Americans who were already struggling to pay their utility bills, but has also created a group of utility customers who are newly unable to pay their energy bills,” the report reveals.

The report makes a series of recommendations to help address the problem. Congress should include additional funding for energy assistance programs and should cancel outstanding utility debts, while states should extend payment plans, write off arrears for individuals who make regular payments, and collect detailed data to help guide policy decisions.

“Public policies and federal aid must be brought to bear to stop these\ customers from falling off of a financial cliff when these bills finally become due, and special attention must be paid to make sure that communities of color do not continue to be disproportionately burdened by unaffordable and unreliable energy service,” the report concludes.

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