Arizona Republic, June 28, 2008: Electricity shutoffs up 40% in hard times, intense heat

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The Arizona Republic

More Arizonans are paying their electricity bills late and having their power cut off, a problem that could worsen for families with the approach of summer’s most intense heat – and highest bills.

Nearly 56,000 households in Arizona Public Service Co. and Salt River Project territory fell far enough behind on their bills to be cut off from power from January to May, a 40 percent jump from a year earlier, according to the utilities.

Most of the increase came from SRP territory, where the number of disconnects is up 64 percent for the year. APS hasn’t cut as many people off but has seen double-digit increases in the number of those getting a final 24-hour notice and seeking payment extensions, officials said.

Utility officials blame the trend on the bad economy.

“You’re going to seen an increase in a downturn,” said Michael Lowe, SRP customer-service manager. “The fact that we have more people (being disconnected) is a little more indicative of some of the pain that customers are feeling.”

Most people pay their bill and are reconnected within a day of weathering 100-degree or higher temperatures without air-conditioning or even a ceiling fan. But utility statistics reveal some startling trends linked to the region’s poor economy.

• SRP officials estimate that one-third of disconnected properties are empty. That could represent several scenarios, including people who moved and didn’t pay their bills, risking credit damage, or owners who abandoned the homes.

• APS reports a 36 percent increase in the number of people seeking payment extensions or other special arrangements to keep the lights on.

• Arizonans getting help paying their bills from the federal Low-Income Home Energy Assistance Program on average need $336 to catch up on electric bills. That is $97 more, or 40 percent above what the average participant needed a year ago.

“We are getting calls every day from families who are in various states of crisis and looking for support,” said Cynthia Zwick, executive director of the Arizona Community Action Association. The non-profit agency’s offices help distribute low-income assistance funds from utilities and the Department of Economic Security.

“Just about every utility in the state has gone for a rate increase in the past year,” Zwick said. “So, while utility rates are going up, wages are not keeping pace with the rising costs of food, utilities, gas and transportation.”

Despite the health risks of shutting off electricity for people when excessive-heat warnings go into effect, the Arizona Corporation Commission, which oversees public utilities, does not track utility disconnections, spokeswoman Rebecca Wilder said.

Officials from both utilities serving the Phoenix area said they encourage customers to call and work out payment arrangements before falling so far behind that their power is cut off.

“It benefits customers and us to keep the lights on and meter spinning,” APS spokesman Alan Bunnell said. “Sometimes, with customers, they won’t have the money for a few more days and ask if we can work something out. In a lot of cases, yes we can.”

Some of the 56,000 people cut off this year could be the same customers being disconnected more than once. Considering the lagging economy and surging price of fuel and everything that moves by truck or depends on oil, utility officials said the increase in late payments is expected.

Asking for help

Carmen Melendez of Chandler realized last year that she needed help.

She had recently retired and was struggling to pay her $300 monthly SRP bills and for frequent air-conditioner repairs.

She was able to avoid having her service cut but only through coordinated efforts.

Her son assisted with her bills, SRP helped with a new prepayment plan for her electricity, and a local program kicked in $5,000 for a new air-conditioner, attic insulation and window-shade screens.

“I thank God for that because my house was so hot,” the 61-year-old said, adding that the energy bill for her three-bedroom, 1,700-square-foot house hasn’t broken $100 since the work done by FSL Home Improvements in April.

Before getting the new air-conditioner, she signed up for SRP’s M-Power plan, which lets her buy energy in advance and track how much she has left from a meter in her house. When it gets low, she can turn down the air-conditioning and recharge her account at one of the utility’s pay centers inside grocery stores.

“That’s working good for me,” she said. “The machine tells me when there is $10 left to use, and you go and you pay more money.”

The former apartment manager also qualified for $15 monthly discounts from the utility, she said.

Asking for help is difficult, but some struggling families are finding that assistance isn’t available even once they take that step.

Tara Blackwell, 32, of Phoenix, has repeatedly had to ask APS for payment extensions.

“We get shutoff notices every month,” she said.

When the stay-at-home mother of two finally called the Community Action Association, they were unable to help.

“I stood in line at 6 a.m. in the morning, and they said that with the amount of people needing funding and it being the end of the month, they are out of money,” she said.

When her youngest son starts kindergarten next year, she can return to work. But, for now, she and her husband will have to stretch his salary and cut other expenses, possibly by keeping most lights turned off and the thermostat set at 81 degrees, she said.

Zwick confirmed the demand for help from community groups outstrips what they can offer.

Utilities provide funding

Several agencies are involved in helping low-income households pay their utility bills.

The federal Low-Income Home Energy Assistance Program allocated $8 million to Arizona in 2008. But the state notoriously lags in funding from the program, which authorized $1.98 billion for the entire country and awards dinky states like New Hampshire nearly three times Arizona’s amount. Local utilities and charitable organizations also play a large role.

APS spends about $250,000 a year for low-income bill assistance through the Community Action Association and an additional $850,000 for its weatherization program.

APS also matches employee contributions to Project Share, a fund administered by the Salvation Army that helps people pay their bills. APS customers, employees and matched contributions for Project Share last year hit $566,000, spokeswoman Maria Arellano said.

SRP contributes $750,000 a year to the Community Action Association for weatherizing low-income homes, and SRP customers also can contribute to Project Share.

The utility matches those donations up to $275,000 a year, said Jennifer Collins, a customer-service analyst.

The utilities also have special payment programs for people who struggle with bills.

SRP offers $15 monthly discounts to customers who meet low-income guidelines. The utility also offers the prepayment program that Melendez signed up for so that those struggling to pay their bills can closely monitor energy use and spending, Collins said.

APS offers low-income customers discounts of up to 40 percent of their bill. Discounts increase based on conservation. It also offers a program for people with special medical equipment that needs more electricity, Arellano said.

To help smooth out seasonal shifts that bring much higher bills with summer’s heat, APS has an equalization plan that charges a flat monthly fee based on a home’s historical use.

APS customers also can sign up for a “safety net” program that will notify close relatives when someone is late on payments. Officials said that it is useful for forgetful customers and that the people who get the notification are not obligated to pay the bill.

“For the past 2 1/2 years, we have gotten a lot more active in the communities trying to get to this segment of our customer base,” Arellano said.

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