Utility Bills For Over 20 Million American Households Are Overdue

As 40-year-record inflation continues to hammer the economy, a new report shows that more than 20 million U.S. households are currently behind on their utility bills. As energy prices are expected to continue to surge, concerns are growing that widespread power shut-offs will be coming soon.

National Energy Assistance Directors Association (NEADA) executive director Mark Wolfe told Fox Business this week that he believes the current level of delinquency is “historic.”

Wolfe added that the total amount of overdue utility bills has skyrocketed recently, sitting currently at around $16 billion. At the end of 2019 the total amount overdue sat at $8.1 billion. Over the same period, the average amount of a delinquent bill rose from $403 to $792.

Wholesale energy cost increases are the primary driving force behind the rise in overdue bills. For example, the wholesale cost of natural gas used for summer cooling and winter heating was up by 30.5% in July over the same month a year ago.

Energy industry experts say that heating bills this winter will lead to even greater cost increases above those seen during this summer’s high demand.

Lipow Oil Associates president Andrew Lipow is a leading energy consultant and wrote this week that no matter whether homeowners use natural gas, heating oil, or electricity for heating this winter, “most will have sticker shock.” He pointed to the futures market for natural gas which is “now more than double what they were a year ago.”

While the consumer price index eased somewhat on an annual basis last month to 8.5% year-over-year, the leading inflation metric still remains close to a 40-year high. Even though wages are generally rising, they are not going up fast enough to keep up with inflation, especially in core items like energy and food.

More and more Americans are now faced with making choices about prioritizing spending between utilities, groceries, gasoline, rent, mortgages, and other typically essential expenses. As a result, energy industry experts warn that an unprecedented number of homes could be facing power shut-offs in the near future because of the inability to pay overdue bills.

As COVID-19 measures like moratoriums on some expenses expiring and prices surging, Wolfe said that there is no doubt that arrearages will continue to grow in the near future.