ST. LOUIS — A “tidal wave” of utility shut-offs is about to hit Americans, local and national experts say.
Power, gas, and water utilities here and across the country have begun to shut off service to residents, or are on the cusp of doing so, after suspending such penalties during the country’s initial response to the coronavirus pandemic.
Spire, the St. Louis-based natural gas utility, lifted its disconnection ban on July 6. Ameren, the region’s electric monopoly, will do so on Aug. 3. Missouri American Water, which serves customers across suburban St. Louis and the state, will restart its normal process for payment collection on Aug. 1 and, if needed, will cut off service for delinquent accounts in September.
Advocates say the volume of affected customers could be significant.
“I’m extremely concerned about impending disconnects and what those numbers might be,” said Geoff Marke, chief economist for the Missouri Office of Public Counsel, which argues on behalf of consumers on utility regulation issues before the state.
Bans are scheduled to expire in 21 states between now and mid-November, most by early September, according to the National Consumer Law Center. “NCLC is expecting a potential tidal wave in disconnections,” said Charlie Harak, managing attorney for the energy unit at the center.
Americans generally seemed to scrape by in April and May, Harak said. “And then by June, it just started to unravel,” he said.
‘Worst time ... ever’
And now, with coronavirus cases climbing, personal savings accounts quickly emptying, and the federal government’s $600 weekly unemployment payment ending this month — unless it gets extended — advocates worry the situation will get worse.
“This is the worst time for us, ever,” said Gentry Trotter, founder of Cool Down St. Louis, a regional energy assistance program formed in 2000. “COVID has become not just a medical issue — it’s a financial one.”
In June 2019, Cool Down processed about 13,000 applications for utility assistance across its 44-county footprint in Missouri and Illinois, Trotter said. This June, the volume tripled — and he expects things will be even worse in July, thanks to the hotter weather.
Overall, Trotter said, at least 150,000 customers in the program’s service region are behind on utility payments. And Cool Down, he said, has now expanded to include tiers of the middle class, reaching customers in ZIP codes that the program doesn’t typically serve.
Rae Stringfellow, of St. Louis, worked as a teachers aide before school operations were upended. Five people live in her house, including her daughter and grandchildren. Outside of rent, the monthly Ameren bill has been their largest expense. Cool Down helped them pay a $675 debt.
But she worries about the future.
“It’s really scary. All of it is scary,” Stringfellow said. “My anxiety is way up.”
Utilities like Spire, Ameren and Missouri American Water are publicly owned and declined to release the number of customers in arrears. The scope of the problem and predicted revenue losses may come to light in upcoming earnings reports.
Some utilities, though, are affected more than others. Summer is when natural gas usage is at its lowest, which experts said has helped minimize the impact to gas companies like Spire. But even they are feeling the pinch. A Spire customer service representative at an out-of-state call center for the company — speaking on the condition of anonymity to avoid retribution at work — said that, compared to last summer, he is handling at least double the number of daily calls, with the vast majority concerning nonpayment and disconnections.
Electric utilities are facing the biggest crunch: Electricity use peaks in the summer, and bills are highest.
But with commercial and industrial demand for energy slowed by the pandemic, analysts say Ameren and other power companies are hurt more by a slump in consumption than by nonpayment from customers.
“That’s the bigger impact, just loss of load,” said Mike Doyle, a utilities analyst at St. Louis-based Edward Jones.
Utilities offer financial assistance and flexible repayment plans to customers in trouble. But they will eventually disconnect services if enough overdue bills are not paid or payment dates are not met.
The state and federal governments also offer help.
“We have money … we just need to get it out,” Marke said. “You probably have some families that have never had to apply for stuff like this before. So this is kind of new terrain.”
‘Funding ... insufficient’
But Harak, of the National Consumer Law Center, said federal cash set aside for financial assistance, even including $900 million from Congress’ Coronavirus Aid, Relief and Economic Security Act, won’t be enough.
“The money is going to run out,” he said. “Funding has chronically been insufficient.”
Trotter is also nervous, “praying” energy assistance resources can keep pace with the soaring demand in the St. Louis area. He’s bracing for payment struggles to continue through the winter.
“There are no smooth days ahead for anybody who’s providing utility assistance,” Trotter said. “The new normal is overworked, pushed to the limit, and trying to help people as much as we can, considering that things are not as good as they should be.”
Regulators at the Missouri Public Service Commission are weighing how to handle the delinquencies. Should the utilities shoulder the costs? Or can they turn around and charge ratepayers to recover such losses?
Some analysts, however, think that utilities will be one of the least affected industries in the economy. They provide a necessary, not discretionary, service. And they can work with the public service commission to get repaid.
Marke said there are also chances to make up for revenue deficits through other means — such as reducing company travel budgets and taking advantage of low fuel costs and attractive financial borrowing options now available.
Similar conversations are playing out around the country.
“This is a really contentious issue across the U.S. right now,” Marke said. “We’re really one of the few states that hasn’t taken a position one way or another.”