Millions in US struggle to pay higher utility bills

Consumers in the United States are being squeezed by the highest inflation rate in 40 years along with rising food and gasoline prices, and now millions are behind in paying higher utility bills caused largely by soaring natural gas prices.

About 1.3 million residential customers in New York are at least two months behind on payments, accruing a debt of more than $1.7 billion, according to the Public Utility Law Project of New York.

At the start of the pandemic two years ago as millions of unemployed people were unable to pay their bills, state-imposed moratoriums generally barred utilities from shutting off power. But most states have lifted those restrictions in recent months.

Nationally, about 21 million customers were behind on their utility bills in December, with total debt about $22 billion for electricity, according to the latest data from the National Energy Assistance Directors Association in Washington, DC.

Electricity prices are going up in large part because the US gets about 40 percent of its power from natural gas power plants, said Neil Kalton, a Wells Fargo equity utility analyst.

Last year, the price of natural gas had been rising all year following the pandemic-induced lows of 2020.

The average retail electricity price paid by US residential electric customers last year rose at the fastest rate since 2008, increasing 4.3 percent from 2020.

In February, the cost of natural gas delivered through pipes across the country was up 24 percent from the prior year, while electricity went up 9 percent.

New York is experiencing some of the highest increases in electricity prices. Almost 1 in 5 New Yorkers are "staring into potential multigenerational debt", said Richard Berkley, executive director of the Public Utility Law Project.

Higher utility bills are especially affecting low-income families and communities of color. They are more likely to live in older, less efficient buildings, resulting in higher energy costs.

The number of people looking for help to pay their bills has grown as electricity prices climb, said Tanya Jones, director of energy assistance and community development at nonprofit HeartShare Human Services that provides utility assistance for low-income consumers in New York.

"It was really a shock to them," Jones said. "We are getting a surge in customers."