Americans Face 25% Jump in Power Bills, Adding to Summer Woe
(Bloomberg) -- As the U.S. faces a blisteringly hot summer, millions of people already reeling from the coronavirus’s economic fallout are about to face sharp increases in electric bills that may drive some to the brink of financial ruin.
With soaring temperatures expected in July and August, people stuck at home because they’re unemployed or working remotely will depend on air conditioners more than ever. That’s going to drive up power bills by as much as 25% in parts of the U.S. at a time when they were already a significant hardship for about 50 million people, according to analyst estimates and the U.S. Department of Energy.
Those increases, which will amount to as much as $50 more per month, may be manageable for most middle- and upper-income families. But they’ll be a heavy burden for those near the poverty line who spend a disproportionate amount of their income on utility bills. In many cases, they’ll be families whose lives have already been upended by the pandemic.
“There will be people faced with figuring out whether to pay their bill or put food on the table,” said Sindy Benavides, chief executive officer of the League of United Latin American Citizens, a Washington-based civil rights group. “It’s a storm waiting to happen.”
Low-income families on average spend almost 9% of their budgets on energy bills -- triple that of middle- and upper-income households, according to the Energy Department. The problem is particularly acute among Black and Hispanic families, who are nearly twice as likely to live in poverty as the national average, according to the American Council for an Energy-Efficient Economy and the U.S. Census Bureau.
The struggle to pay utility bills will only get worse as temperatures rise, outbreaks continue and unemployment persists. About 20 million Americans are out of work. Many of those job losses were at restaurants, hotels, factories and retail stores that will remain closed or partially staffed for months to come.
“People will start to make very tough choices,” Jacqui Patterson, director of the NAACP’s environmental and climate justice program, said in an interview. “It’s another situation where people are paying the price of poverty with their lives.”
Almost the entire contiguous U.S. has a high chance of having a long, hot summer, according to the U.S. Climate Prediction Center. California has already suffered two heat waves, while New York, Boston and Philadelphia have all reached or exceeded 90 degrees Fahrenheit (32 Celsius), according to the National Weather Service.
“We have made the turn into what is going to become a long summer of heat,” said Jim Rouiller, lead forecaster at the Energy Weather Group.
Europeans will probably face higher bills, too. Households in Britain are estimated to be using 17% more gas and 25% more electricity as people plug in electronic devices, cook more at home and now start to switch on fans to keep cool, according to Uswitch, a website that helps consumers compare utilities’ prices.
In the U.S., working from home has already increased residential demand for electricity by as much as 15% in some regions during work hours, according to Innowatts, which consults for utilities and monitors 34 million electric meters.
But the first few months of the pandemic were during the spring. As air conditioners kick into high gear, those figures will be much higher. The majority of cities expected to see major increases in bills are on the East Coast, including Philadelphia, New York, Boston, and Washington, according to an analysis by residential energy provider Arcadia Power Inc.
In New York, Consolidated Edison Inc. has already warned customers that bills will go up about 10% this summer to a monthly average of $110. In California’s baking-hot Central Valley, the average bill may exceed $200, up about 25% from normal, according to Edward Randolph, head of the energy division at the state’s Public Utilities Commission.
On average, U.S. power bills could rise by as much as 25%, according to an analysis by the Union of Concerned Scientists that assumes usage climbs by up to 30%. That will amount to as much as $50 more per month in parts of the U.S. South, including Arizona, Texas, Florida and other new hot spots for the virus.
Higher utility bills may force some people to seek shelter in government-run cooling centers or other public buildings, said Jeremiah Bohr, an assistant professor of sociology at the University of Wisconsin, Oshkosh. That will put them at a greater risk of being exposed to the virus.
“It highlights the larger issue of how difficult it is to make ends meet,” Bohr said.
Many states including New York and New Jersey have issued orders preventing utilities from cutting off power to people who can’t pay their bills. California has even instituted a debt forgiveness program. But in many places, orders presenting shutoffs are expiring soon. Arrears, meanwhile, are piling up.
“In the best of times, millions of people get disconnected from the grid, and that skews heavily to low-income households,” said Charlie Harak, senior attorney for energy and utilities issues at the National Consumer Law Center. “It’s about to get very hot.”
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