More Americans Than Ever Can’t Afford to Pay Their Electric Bill

[Hydrogen]

With more people owing more money, utility companies are getting more aggressive about shutoffs.

A “Tsunami of Shut-Offs” Is Coming

US electricity prices surging and more people than ever are struggling to pay the power company. More than 20 million American households have fallen behind on their utility bills, about 1 of every 6 homes, and the amount they owe has doubled since before the pandemic. 

With more people owing more money, utilities are getting more aggressive about cutting off delinquent customers. Many states imposed shutoff moratoriums during the pandemic, but those policies wound down just as record inflation made power – and almost everything else — more costly.

That’s going to trigger a “tsunami of shutoffs,” Jean Su, a senior attorney at the Center for Biological Diversity, told Bloomberg News for a story I co-wrote this week on the coming crisis. 

The basic problem is that electricity is more expensive, up 15% from a year ago, and there's no sign of relief. That’s because power prices are linked to the cost of natural gas, which has more than doubled in the past year and is expected to remain high at least into next year.

Meanwhile, climate change has triggered extreme heat around the world, driving up power consumption, and power bills, as people seek refuge in air-conditioning. And in many hot regions, cooling isn't just for comfort — people who lose power during a stifling heat wave can die. While 41 states have some kind of protection against winter shutoffs for exactly this reason, only 19 have similar policies for the sweltering summer months. New Orleans last month asked its local utility to halt summer shutoffs as temperatures climbed, and this is going to become more urgent amid the global climate crisis.

Government aid is helping avert some shutoffs, and Congress this month asked for additional emergency funding on top of the $4 billion already set aside for a federal assistance program this year. Many states also have assistance programs, and utilities are generally willing to work with struggling customers. Most will agree not to shut off power to people who have applied for assistance or signed up for some kind of payment plan.

But that help is just a band-aid that masks the underlying issue, according to Mark Wolfe, executive director of the National Energy Assistance Directors Association. Low-income families already face a high energy burden, with a greater portion of their income needed to cover utility bills than wealthier families. For some, electricity is becoming too expensive to afford at all. 

“The bills just aren’t affordable,” says Wolfe. “People on the bottom, they can’t pay this.” —Will Wade

https://www.bloomberg.com/news/newsletters/2022-08-25/more-americans-than-ever-can-t-afford-to-pay-their-electric-bill

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According to this, 1 in 6 american households have fallen behind on electricity payments. Installment payment plans and state assistance are some of the options available. But the situation doesn't look good.

It seems most are suffering in silence as there hasn't been much public discussion on the topic.

Is it possible that rising electricity costs could fuel a trend towards mass adoption of renewable energy for residential use? As people seek alternatives due to grid energy being priced outside their budget? Is there a silver lining and positive note to this doom and gloom?

As the cost of natural gas and petrol rise. Many have speculated it will create opportunities and accelerate adoption of alternatives to traditional fossil fuels which are superior. While much of europe is unsuitable for either wind or solar power. The same cannot be said of the united states. Maybe we have a chance for energy independence. Although, it doesn't seem as if many care about things like that.

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[Die_empty]

According to this, 1 in 6 american households have fallen behind on electricity payments. Installment payment plans and state assistance are some of the options available. But the situation doesn't look good.

One in six American is not a very bad condition. In my country it might be five out of six. The global economic crisis is biting the economy of both the great and small nation. The situation might not look good, but I trust America they would overcome this challenge. 

It seems most are suffering in silence as there hasn't been much public discussion on the topic.

Americans are well cultured and understanding people. They understand the global economic situation and they have confidence in their government. Protest breeds from misunderstanding and mistrust. And an average American is a nationalist, their love for this nation is boundless.
 

Is it possible that rising electricity costs could fuel a trend towards mass adoption of renewable energy for residential use? As people seek alternatives due to grid energy being priced outside their budget? Is there a silver lining and positive note to this doom and gloom?

As the cost of natural gas and petrol rise. Many have speculated it will create opportunities and accelerate adoption of alternatives to traditional fossil fuels which are superior. While much of europe is unsuitable for either wind or solar power. The same cannot be said of the united states. Maybe we have a chance for energy independence. Although, it doesn't seem as if many care about things like that.

Shifting to another source of power would be challenging and very expensive.  The phasing out of oil and gas would be gradual and time consuming.

[Gozie51]

I think the major issue regarding this is the effect of unemployment, underemployment or increase in inflation and tax. Since the fed made a statement of increase in tax rate, most economies have started feeling the heat. Regarding the generation of electricity by individuals or group, I don't know the American law on that but worse they can use solar energy to generate house hold electricity.

[so98nn]

USA always comes to me as big surprise. The continent is really wide and prospering, yet it has such problems which are seen by under developed or developing countries. The fact that they have less population as compared to other developing countries and yet they are able to fulfil the fuel/energy needs of their peeps is amusing. USA over the time has kept their reliance on the outsourcing a lot and thus they are more or less reducing in numbers of employment causing direct impact on what they earn per capita. Subsequently bills are looking bigger than bread and butter due to such situation.

Changing source of energy is not a problem. They should reduce the consumptions with day light savings or some other measures which can save up back ups on the substations and bring down the prices by using Demand-Supply formula. Works in most of the asian countries with highly dense population.

[Gyfts]

Is it possible that rising electricity costs could fuel a trend towards mass adoption of renewable energy for residential use? As people seek alternatives due to grid energy being priced outside their budget? Is there a silver lining and positive note to this doom and gloom?

Correct - this is because the U.S. is limiting their oil/gas production and outsourcing their energy needs. Germany is facing a similar problem having relied on Russia to expand renewables instead of developing their own infrastructure.

There is no silver lining. The U.S. is spending trillions on green climate change initiatives that are going to have no sizeable effect on global temperatures. Meanwhile, the price of energy, food, housing, will continue to rise with the solution being "go buy an electric car."

Doesn't sound too reasonable for the government to burn money on climate change and then except the citizens to foot the bill for their radical ideology and utopian dream.

[hugeblack]

The only positive aspect is that the market for alternative solutions is mature and there is enough investment and global demand if there is any improvement, so all that is required is more research that makes energy cheaper.

As for the rise in energy prices, I did not think that the United States would be affected in this way. In my country, prices did not increase much, perhaps 5%, and therefore it is a cost that everyone can afford, and then an average of 200 dollars is enough to cover all energy and gas expenses.

I heard that the number reached one thousand in France.

[cabron]

Why should American's suffer all these when they have Canada who has a mining operation and there is also Venezuela that they can trade with?
There is also report that more Americans are migrating to Mexico because the gas over in Mexico and the rent is cheaper. Its an option but if budget are really tight I guess the family will really experience the cold days, its a bad situation all the more for families with kids.

Solar and wind is not sufficient really. What is needed if we want renewable to work is the cascading hydro power plant. It will cause flood to riverbanks but it could be planed ahead.

The only positive aspect is that the market for alternative solutions is mature and there is enough investment and global demand if there is any improvement, so all that is required is more research that makes energy cheaper.

As for the rise in energy prices, I did not think that the United States would be affected in this way. In my country, prices did not increase much, perhaps 5%, and therefore it is a cost that everyone can afford, and then an average of 200 dollars is enough to cover all energy and gas expenses.

I heard that the number reached one thousand in France.

The news was that there are already blackouts, the lights in roundabout of cities are dimmed. Challenging times I think its about time to develop the bushcraft skills and gather some logs.

[justdimin]

Is it possible that rising electricity costs could fuel a trend towards mass adoption of renewable energy for residential use? As people seek alternatives due to grid energy being priced outside their budget? Is there a silver lining and positive note to this doom and gloom?

Correct - this is because the U.S. is limiting their oil/gas production and outsourcing their energy needs. Germany is facing a similar problem having relied on Russia to expand renewables instead of developing their own infrastructure. Difference being, the U.S.'s demise is self inflicted but nto

There is no silver lining. The U.S. is spending trillions on green climate change initiatives that are going to have no sizeable effect on global temperatures. Meanwhile, the price of energy, food, housing, will continue to rise with the solution being "go buy an electric car."

Doesn't sound too reasonable for the government to burn money on climate change and then except the citizens to foot the bill for their radical ideology and utopian dream.

There "is" a silver lining because USA is not spending trillions on renewable, that is a wrong number and I do not know why you wanted to say that. Right now Solar is getting 3% of what oil/gas is getting, literally subs and not just tax breaks as well.

So, we are talking about a situation where oil is still seen as the most important thing and government is helping those companies. You know how much solar panel is needed to light entire USA up? Just one quarter of Utah (number was given by Elon, but this stat seems a lot more fun) so all in all, there isn't enough investment to USA because if we ever did then we would have it already by this time, there wouldn't be any problems like this.

[LoyceV]

Is it possible that rising electricity costs could fuel a trend towards mass adoption of renewable energy for residential use? As people seek alternatives due to grid energy being priced outside their budget? Is there a silver lining and positive note to this doom and gloom?

If I compare things to Europe, I don't think it's very likely. Energy has always been much cheaper in the US than in Europe, and that's why Americans consume more of it. The average American household consumes 10,715 kWh of electricity per year. In the Netherlands, that's 2,479 kWh. I expect similar numbers when it comes to fuel, cars here are much smaller (although they're getting bigger lately).
So the best thing to do, is reduce energy consumption. Insulate those houses. Solar panels are nice if you have space for it, but as long as grid energy is cheap, it won't be a viable option for the people who currently can't afford their bills.

As the cost of natural gas and petrol rise. Many have speculated it will create opportunities and accelerate adoption of alternatives to traditional fossil fuels which are superior. While much of europe is unsuitable for either wind or solar power. The same cannot be said of the united states. Maybe we have a chance for energy independence. Although, it doesn't seem as if many care about things like that.

One of the problems with the European "Green Deal" is that it focusses on the ideological side, and not on availability of energy. Here, we have a minister of "Energy and Climate". The combination of the 2 says it already, he studied Public Management and he's more of a minister of "Energy Reduction" than "Energy Security". Needless to say, that backfired big time with gas prices up 20-fold and electricity prices up 10-fold since he came to office. It's not even his fault, but I doubt he even understands where energy comes from, so he's not going to resolve it.

So from what I've seen: energy policies should be based on technology, not on ideology and especially not on "required innovation".

[Gyfts]

...

There "is" a silver lining because USA is not spending trillions on renewable, that is a wrong number and I do not know why you wanted to say that. Right now Solar is getting 3% of what oil/gas is getting, literally subs and not just tax breaks as well.

So, we are talking about a situation where oil is still seen as the most important thing and government is helping those companies. You know how much solar panel is needed to light entire USA up? Just one quarter of Utah (number was given by Elon, but this stat seems a lot more fun) so all in all, there isn't enough investment to USA because if we ever did then we would have it already by this time, there wouldn't be any problems like this.

I should clarify that I'm talking about all expenditures related climate change, not just money spent on renewables, over the last 2 decades at least. Spending has been ramped up over the last decade, but it was going on for much past that. How many subsidies, defaulted loans, tax credits and such, have gone out to "green" enterprises that haven't posed a positive ROI? Climate change expenditures are not only the funds associated with building more wind turbines. The opportunity cost isn't factored in either (as in taking the billions spent on climate change initiatives that have accomplished nothing, and factoring what those funds might have returned had they been invested properly)

I've tried looking for accurate figures of total climate change expenditures and can't seem to find it. If you have a figure that's more accurate, I'd be informed of a more reliable estimate.

[Poker Player]

I don't think it's just the Americans. In Europe a lot of families are going to have trouble paying for electricity.

I googled and the first thing I see is this:

Factbox: Europe's efforts to shield households from soaring energy costs

But I think about it from a more global perspective: what else will an increasing number of families not be able to afford as energy prices affect everything and produce inflation.

It is clear that they are not going to stop eating, even if they are looking to save more on groceries. I understand that the leisure sector and other non-essential sectors will be the most affected.

[LoyceV]

I don't think it's just the Americans. In Europe a lot of families are going to have trouble paying for electricity.

I'm pretty sure it's going to be far worse for Europeans than it is for Americans.

Factbox: Europe's efforts to shield households from soaring energy costs

Many countries have either lowered energy taxes, or are now subsidizing energy. My country is now even subsidizing large industries to keep them compatitive.
There's a fundamental problem with that: it doesn't solve the shortage! If everyone would consume (say) 20% less energy, there wouldn't be a shortage, prices would be back to normal (90-95% lower than the current prices), and we'd all spend 20% less.
If, on the other hand, everyone pays 10 times more (with or without subsidy), and uses the same amount of energy, we still have a shortage that won't be solved in the short term, and drain money out of our economy towards other countries. Part of that money comes from increasing government debt, made possible by the low interest, and all it does is fuel inflation.

But I think about it from a more global perspective: what else will an increasing number of families not be able to afford as energy prices affect everything and produce inflation.

I just checked: at our current household energy consumption, the cheapest new contract would be €550 per month. That's an energy supplier I've never heard of. There are a few other offers around €700 per month. It's crazy, especially since this country is sitting on large natural gas reserves. We used to be a large exporter of natural gas (when it was very cheap), but now gas production will shut down in October (that's a political decision).

It is clear that they are not going to stop eating, even if they are looking to save more on groceries. I understand that the leisure sector and other non-essential sectors will be the most affected.

Here, supermarkets increased their revenue while they sold less products. We don't stop eating, but we're either eating less or cheaper products.

[pooya87]

And I just paid my electric bill for the past 2 months and it was $0.32. A bag of chips is 10x more expensive than that which always makes me wonder why the hell our hashrate isn't higher than 10% yet. There is some regulations involved and some taxes but it is not that bad to discourage major investment in big mining farms.

[LoyceV]

And I just paid my electric bill for the past 2 months and it was $0.32.

Which country is this? Can you share how much energy you used for this price, and how it gets that low?

Here, we have (for both gas and electricity) a fixed cost per day for the connection and consumption rate. Both are subdivided into several parts including taxes, but that's not relevant for the total. We also get a fixed tax reduction, which is higher than the fixed cost per day. So if you don't use much in summer, you can get very low or even negative costs. But, we pay an average amount per month so people can still afford it in winter.

A bag of chips is 10x more expensive than that which always makes me wonder why the hell our hashrate isn't higher than 10% yet. There is some regulations involved and some taxes but it is not that bad to discourage major investment in big mining farms.

A 9.6% hashrate would put you in Canada. I how no idea how power prices are build up there.

[jrrsparkles]

Obviously the rate will increase over the next years and using solar energy for power up the residents is good idea but definitely can't fit into the budget of the people who can't even afford to pay the bills because the power panels and all the grid system is very expensive but one time investment so if government help the people like subsidy for power panels,etc then people who can afford it will use that and consumption non renewable power energy also will decrease along with its price.

[crwth]

The energy problem is not just in America but all over the world. I think it's still best to consider not to replace fossil fuel immediately but to ease in or transition towards alternatives with any renewable energy resources. There needs to be this transition that would make it easily accessible by everyone and make things like electric bills not too much of a problem.

This needs to be addressed by the government to make everyone see that there is an energy crisis, especially with what's happening with the nation's fighting and logistics problems. The world should make a better place to accommodate everyone.

[LoyceV]

The energy problem is not just in America

This feels like Americans complaining about high gasoline prices, while they have no idea how lucky they are

What rates do you guys pay now, if you need a new contract? I just checked here: more than 1 euro per kWh, and more than 5 euro per m³ natural gas. That means €1500 to heat your house in January, and another $200 to turn on the lights.
Prices keep going up on a weekly or even daily basis.

I need to start looking for a winter house in Spain

[lumbanrang]

It's very funny to see that a developed country like America still has its citizens who can't pay for their own electricity. This could be evidence that the American government has failed to address the most basic problem, namely electricity. They are too focused on throwing billions of dollars into Ukraine, even though there are still many citizens who need subsidies for their needs.

[pooya87]

Which country is this?

Iran.

Can you share how much energy you used for this price, and how it gets that low?

My electric bill was extra low because I got a 50% discount on this bill since the amount of electricity I used was lower than same 2 months in previous year (this summer was a lot cooler so less air conditioner).

But generally speaking since my country has the most amount of fossil fuels in the world (among top 3 at least in oil+gas), fantastic geography for renewable energies (wind, sun, hydro, geothermal, etc), growing nuclear power plants, ... electricity has always been very cheap. Other energies have also been very cheap, I actually paid a bunch of bills today and my gas bill was about $1 and my water bill was a little less than a dollar.

I should point out that part of the low price in dollar is the terrible exchange rate Rial has which is why I intentionally used the "bag of chips" for comparison to clarify that generally speaking utility bills are indeed very low here, for example total of what I paid today (electric, gas, water and phone bill) would be barely 1% of the lowest salary in my country.

Here, we have (for both gas and electricity) a fixed cost per day for the connection and consumption rate. Both are subdivided into several parts including taxes, but that's not relevant for the total. We also get a fixed tax reduction, which is higher than the fixed cost per day. So if you don't use much in summer, you can get very low or even negative costs. But, we pay an average amount per month so people can still afford it in winter.

The rates here are fixed (may change every decade with inflation). And we always pay exactly for the amount we used and usually every 2 months. Some exceptions apply like for those who use a lot of electricity, where the rate goes up incrementally to prevent abuse (BTW this doesn't apply to licensed bitcoin miners, they get a slightly higher but fixed rate which is still lower than anywhere else).
Electricity prices also differ based on the city, for example in the south where it is a lot hotter than closer to north where I live, the electricity price is even lower since people naturally consume more electricity for air conditioners and such.

A 9.6% hashrate would put you in Canada. I how no idea how power prices are build up there.

My data may be a bit outdated since I computed the share last year (~6 months ago) and I basically reversed the amount of tax the government had claimed to have earned from miners to get the total hashrate percentage which put it a little less than 10%. However official statements have claimed it is about 5% at the time and the historical chart at Cambridge Bitcoin Mining Map approves it too but it puts the current percentage at 0.12%.
This makes even less when you consider that Iran has been using bitcoin as payment for international trades and considering trading bitcoin is not regulated, the only way they can receive bitcoin is if they take in form of tax from miners.

The Cambridge thing may be reporting based on news instead of actually computing the percentages. The 5% they reported before was a public announcement and the 0.12% is also related to another news 2 months ago where the government claimed they would be shutting down miners during summer to prevent power outages.
But considering that there has been no power outage until today (third month of summer) and on a Persian forum miners claimed they never received any new regulations telling them to shut down, raises some questions about validity of those stats by Cambridge (not saying they are for sure wrong though since I don't have enough information and the government doesn't really release any clear statistics!).

[Theones]

It's very funny to see that a developed country like America still has its citizens who can't pay for their own electricity. This could be evidence that the American government has failed to address the most basic problem, namely electricity. They are too focused on throwing billions of dollars into Ukraine, even though there are still many citizens who need subsidies for their needs.

The problem of electric bills is global - we are facing the same problem
Yet there is so much we are going through in the name of inflation that buying power elite has also dropped