USA Today, April 26, 2008: Unpaid utility bills soar as economy sags

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By Judy Keen, USA TODAY

CHICAGO Hundreds of thousands of utility customers are at risk of disconnections as the sagging economy drives up the number of past-due home heating bills and the amounts owed, utility companies in cold-weather states say.

Xcel Energy says 17%-19% of its 1.1 million Minnesota customers and its 280,000 Wisconsin customers are in arrears. That’s about the same as a year ago, but balances owed are up 10% in Minnesota and up 20% in Wisconsin, says Pat Boland, Xcel’s credit policy manager.

Xcel disconnects 600-650 customers daily, he says. “Obviously the economy is playing a very big role in the disposable income that folks have,” Boland says. Another factor: Cold weather added 7%-8% to this year’s bills.

The extent of the problem is becoming apparent now because most states in the Midwest and Northeast have moratoriums on disconnecting utilities in winter months. Those restrictions typically end March 31 or April 15. Companies try to work out payment plans before curtailing service, and aid is available for some low-income customers.

A record $40 million was owed by 226,670 delinquent customers of rate-regulated utilities statewide in March, says Jerry McKim of Iowa’s Bureau of Energy Assistance. “What we have is a crisis that never goes away,” and more federal and state assistance is needed, he says.

In March, 89,002 disconnect notices were issued, up from 86,035 in March 2007, McKim says. Iowa’s moratorium applies only to customers who qualify and apply for low-income energy aid.


• Central Maine Power Company says that as of March 31, 29,000 of its 537,000 residential customers had not paid anything on their accounts since December a 4% increase from 2007.

Northern Utilities, which supplies natural gas to 26,000 residential and business customers in Maine, says the amount owed by customers whose bills are 30-60 days past due is up 45% from the first quarter of 2007.

Northern’s customers in New Hampshire and accounts at sister company Bay State Gas in Massachusetts have similar arrearages, says spokeswoman Sheila Doiron.

• In River Falls, Wis., a city of 14,000, service to a dozen homes with overdue bills was discontinued by River Falls Municipal Utilities this month, says customer service supervisor Jan Lorenz. The utility has 5,800 customers. “In past years, nobody would be shut off,” she says.

Home foreclosures and high gasoline prices are part of the problem. “We see people that just move in the middle of the night and they’re gone,” Lorenz says. “We have people say, ‘I can’t afford gas to go to work, so how can I pay my bills?’ “

Forty-five customers of St. Croix Gas, which serves 7,000 customers in the River Falls area, haven’t paid after being cut off on April 15 a 10% increase from 2007, vice president Marti Piepgras says. Disconnect notices are up 50% this year.

• Wisconsin Public Service says 12%-15% of its 500,000 residential customers have past-due bills. That’s up 5% from 2007, says credit administrator Jim Ollmann. “Customers are struggling,” he says.

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