When Utility Bills are Unpaid We All Pay

December 18, 2009 by Jim Linn · Comments Off
Filed under: energy, people 

Did you ever consider what happens when some people are unable, unwilling, or simply don’t pay their utility bill?  Ultimately we all pay.  Utilities are companies that operate as businesses just like any other business, except that unlike many businesses they deliver their product first and then ask for payment later.  That makes it even harder to recover their costs.  Unpaid bills ultimately are just another cost of doing business.  And, these costs are passed on to all paying utility customers.

In today’s economy, with high unemployment, home foreclosures and many people simply unable to make ends meet we are experiencing significant levels of unpaid utility bills.  The industry refers to this as arrears, bad debt or uncollectible accounts.  Recently we estimated that industry-wide there are $3.5 billion in unpaid utility bills, affecting more than 10 million U.S. households.

Many factors play into the issue of uncollectible accounts.  In most cold weather localities utilities are required by law to provide electricity and natural gas from October through March, regardless of whether a customer pays his or her bill.  During this time many customers get so far behind on their bills that they simply never get caught up.  We also know that the utility bill is often the last bill to be paid monthly and if there isn’t enough money to pay all the bills it is the one that goes unpaid.

Utility companies work hard to identify those who should be able to pay their bills through data analysis known as “behavioral scoring.”  This methodology helps the utility work with specific customers in ways to encourage payment.  Additionally, some utilities report unpaid accounts to the credit bureaus, which can have an adverse affect on a customer’s credit.  Ultimately, the best solution is increased personal financial responsibility.  For example, discretionary spending on non-essentials should be curtailed so that bills for essential services, such as those utilities provide, can be paid.

LIHEAP Helps Customers Who Cannot Pay Their Utility Bill

For many people, paying their monthly bills is an ongoing challenge.  Fortunately our nation is full of people who are willing to share the burden of those who are unable to pay.  In many localities one way of helping those who cannot pay their energy bills is the local fuel fund.  For example, in the Washington, D.C. area there is the Washington Area Fuel Fund.  This fund is administered by the Salvation Army.  Contributions are made by local individuals and companies, and funds are distributed to needy customers of the local natural gas and electric utilities. You can also visit the National Fuel Funds Network for information on similar programs.

Weatherization is an additional method of assisting low-income households.  The recent federal stimulus provided $5 billion of low-income weatherization funds, which are used to increase insulation and in some cases provide higher efficiency furnaces and water heaters.  These methods decrease the energy burden for low-income families.

Ultimately the greatest contributor to households needing energy assistance is LIHEAP, the Low Income Home Energy Assistance Program.  In 2008, thanks in great part to AGA’s efforts on Capitol Hill, Congress appropriated a record $5.1 billion for LIHEAP, but even with that level of funding we still find $3.5 billion in unpaid utility bills, due in great part to our stalled economy.  It is clearly time to increase LIHEAP funding once again to ensure that needy households continue to have warm, safe homes.

Tags: liheap

Can Obama Satisfy The World And Congress?

December 17, 2009 by Dave Parker · Comments Off
Filed under: Natural Gas 

nationaljournalblog2 Can Obama Satisfy The World And Congress?My latest comment from the National Journal’s Energy and Environment Experts blog.

Creating a Practical, Doable Solution

As an issue, climate change – regardless of how people choose to define it – probably sits near the top of every major government’s to-do list.  In a perfect world, that fact alone should be enough to spur into action the world leaders currently gathering in Copenhagen.

We do not, however, live in a perfect world.  We live in a world where climate change, although a very important issue, is one of many facing policy makers with limited time, limited budgets and an expanding portfolio of pressing concerns.  What can President Obama do to satisfy the world and express in action America’s commitment to addressing the probable effects of climate change?  First and foremost he can look to his own country and its rich supply of innovation, creativity and domestic low-carbon resources.

The United States is home to many of the world’s leading alternative energy and carbon-neutral researchers, creative thinkers and entrepreneurs.  Some are academics seeking to develop low-impact resources for idealistic reasons while others are traditional energy companies looking to capitalize on the green energy market.  Both should be encouraged, because fundamentally shifting the very concepts of energy and energy supply will be an expensive and a long journey.

There is no “app” for clean energy, but there is a strategy and, given time, it will likely bear fruit:  (1) continue to invest in energy efficiency technologies; (2) support and encourage alternative power generation sources such as nuclear, solar, wind, bio fuels and hydro; and (3) intelligently develop existing, domestic low-carbon resources such as abundant, clean natural gas.

The practical task of changing how electricity is generated and used will not be achieved through some panacea, but through the intelligent coordination of multiple, scalable solutions which will take time and significant resources to reach.  Natural gas is a major part of the solution, but we need to be realistic about what it will take to get to that carbon-neutral future and what the real costs entail.

Tags: national journal

A Climate of Change

December 16, 2009 by Pam Lacey · 2 Comments
Filed under: Natural Gas 

Now that the die is cast for the talks in Copenhagen, and the Senate is focused on health care reform, we have a short time out on climate change legislation.  Let’s hope that gives everyone a chance to think about how to craft a climate program that can really work.

Among other things, I would like to see the energy and climate legislation include provisions to ensure that energy efficiency standards for appliances and homes will really improve energy efficiency and reduce greenhouse gas emissions – and not be counterproductive window dressing.

To be effective, we need to measure energy efficiency and carbon footprint on a life cycle “source energy” basis.  This is the approach recommended by the National Academy of Sciences report and supported by the National Resources Defense Council (NRDC) in its joint statement with AGA.

They agree that it makes no sense to burn natural gas at a power station to serve consumer needs that can be served more efficiently through “direct use” – i.e. by burning the natural gas directly in the home in efficient natural gas furnaces and water heaters.

You have to combust  two to three times more natural gas (!) – and emit two to three times more carbon dioxide – to deliver the same number of hot showers and warm homes in electric resistance appliances.  And that does not even take into account the emissions resulting from electric appliances served by coal-fired power plants.  Source energy is an idea whose time has come.

Want to know more?  See my article “A Climate of Change” in this month’s American Gas magazine.

Tags: environment

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