Utility Management Group
Senior decision-makers come together to connect around strategies and business trends affecting utilities.
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Unpaid bills
When the pandemic hit North America in March 2020, utilities across the country suspended shut-offs for late bill payers. Some of these suspensions were state mandated, while others were decided on by power companies. By now, almost all shut-off moratoriums have ended. Now, the question is what to do about all those outstanding bills.
From a public health perspective, it’s likely that the moratoriums were very effective. A paper out of Duke University estimated that the shutoff moratoriums reduced COVID-19 infection by 4.4% because they kept people from moving in with family and friends to save money. That same study estimated that 15% of COVID deaths could have been prevented had moratoriums been put in place nationally. However, moratoriums came with a cost: Without a warning of a shutoff, many people forgot about their mounting debts and didn’t apply for state and federal relief programs.
Some states have used federal aid package money to relieve utilities. Gov. Phil Murphy of New Jersey, for example, signed a bill into law that will see $250 min go to utility debt assistance. New Jersey saw its unpaid bill debt climb from $376 million in 2019 to $709 million in 2020.
I don’t know what the solution to utility bill debt is. Any plan will come at some cost to society. There are no free lunches in economics.
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