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Frigid Apartment or Crushing Debt? Many New Yorkers Must Choose

For many, utility bills never get a second thought, because they’re taken care of by automatic payments. But for millions of New Yorkers, the impact of rising energy costs looms large.

The number of customers with utility debt hit a record high this past summer, with more than 1.3 million households collectively owing nearly $2 billion to the state’s utility companies, according to an analysis by RentWire, which compiled hundreds of debt collections reports from the New York Department of Public Service. The new record surpassed the previous one from November 2021 by ten thousand customers. Customers owed Con Edison, the company that serves New York City and Westchester County, an average of $2,180.

Now, New Yorkers are bracing for an unusually expensive heating season without having a chance to recover from the record-breaking cooling costs from the summer. Con Edison warned its customers in September that residential energy bills could go up by another 22% this winter, citing the rising cost of natural gas and “disruptions in the global supply chain.”

This affects close to 60 percent of all New York State households that use natural gas for heating, and another 15 percent that use electricity to heat their homes. “Higher natural gas prices also affect the cost of electricity, since power generation plants in the Greater New York City region run mainly on natural gas,” the company said.

New York is not alone in reeling from the shock of surging energy prices. The world’s recovery from the pandemic, coupled with Russia’s invasion of Ukraine, fueled a global energy crisis that prompted gas prices to double in some European countries.

While America is arguably in better shape than other countries, this offers little comfort to those concerned about keeping their heat on this winter. In fact, New York City residents pay higher energy prices than the majority of other metropolitan areas in the country. The city’s dependence on out-of-state energy imports and the lack of electricity transmission capacity contributes to the hefty price tag.

Briana Carbajal, a state legislative manager for the advocacy group “We Act for Environmental Justice,” has been helping low-income New Yorkers struggling with energy bills apply for various assistance programs.

One of the people Carbajal’s group assisted was a single mother with more than $2,000 of utility debt. Also behind on rent, she did not want to use an electric space heater due to the fear of higher electricity costs and possible fire hazards. Whenever the building’s heating system malfunctioned, she and her daughter were left in the cold.

She observed that compounding problems of poor infrastructure and housing add greater burdens to those with utility debt. “It impacts everything that you could possibly think of,” she said.

Aging infrastructure and low energy efficiency in older buildings often result in higher energy costs, making it harder for residents to pay their energy bills. Poorly insulated walls, drafty windows, and inefficient heat pipes may keep the house much colder than otherwise would be, forcing residents to rely on other measures to heat their apartments.

Another community member Carbajal helped was “a pregnant mother with a 10-month-old,” who was paying bills that are over $400 or $500 every month. She owed $5,000 of debt to Con Edison.

Because utility debt makes it harder for residents to move, she, like many other debt holders, was stuck in a poorly maintained building with no heat. Many utility companies prevent customers with outstanding debt from opening new accounts when they move to a new place.

“Her boiler broke and she asked her manager to fix it, but nothing was resolved,” Carbajal said. “She was using her oven for heating.”

Desperate efforts to keep the home warm are often futile, even dangerous at times. “It was freezing in her entire building,” Carbajal said. “Using the gas stove for heating alone has tons of horrible health implications.”

Numerous studies suggest that prolonged use of gas stoves produces harmful chemicals such as nitrogen dioxide and carbon monoxide, which can cause various respiratory and cardiovascular illnesses and even increase the risk of breast cancer.

According to a recent survey by Consumer Reports, more than 20% of Americans “with annual household income under $30,000” who owned a gas stove said they have used the appliance to heat their homes in the past year.

Keeping a home cold is not a viable option either. A 2019 report by Columbia University's Mailman School of Public Health showed that cold homes worsen the symptoms of many pre-existing health problems, ranging from heart disease to stroke, arthritis, pneumonia, asthma, and Alzheimer's.

Accruing debt also has financial consequences that go beyond just the energy bills. “Having that much debt means you most likely don't have the greatest credit,” Carbajal said. “Unfortunately, it has horrible implications for keeping housing secure.”

During the pandemic, New Yorkers were protected from having their power cut off thanks to a state moratorium on utility shutoffs. However, that protection ended in June 2022, exposing thousands of customers to the risk of service disconnection.

“We're starting to see people getting shut off for the first time since before the pandemic,” said Laurie Wheelock, an executive director at Public Utilities Law Project (PULP), which provides free legal assistance to low-income households at risk of power shutoffs.

Under the law, customers have 20 days from the first missed payment until utility companies can act on the case. “On that twentieth day, the utility company can send a final termination notice,” explained Alicia Landis, a staff attorney at PULP. “From there, it's 15 days. So customers, once they don't pay the bill, typically have 35 days until they may be legally shut off.”

Fearing massive utility shutoffs, New York Gov. Kathy Hochul announced in July 2022 a $567 million debt relief program designed to help low-income families with their utility bills. The program provides one-time credit to qualified households that eliminate utility debt they accrued up until May 1, 2022.

“It's been tremendous,” Wheelock said, of the program. “We've seen people with more than $4,000 or $7,000 in balances from the pandemic. The program looks at people’s bills from May 1st, 2022, and wipes away everything from that point backward. That’s big.”

The data collected by the Public Commissions Service reflects the impact of the measure. The amount of debt dipped significantly in July when the program took effect.

While the one-time relief provides help to the most vulnerable, advocates and experts agree that a long-term solution is needed for alleviating the energy burden. Steve Cohen, director of the Earth Institute at Columbia University, said that while energy relief programs are much needed, it is a stop-gap measure to an ongoing problem.

“In the longer term, we need to lower the cost of energy,” Cohen said. “We need to use the newer technology for renewable energy and energy efficiency to help lower the cost.”

Wheelock echoed the need for investment in clean energy, emphasizing that relieving energy burden and achieving energy transition can go hand in hand. “The financial assistance is great,” she said. “It's there. But it's like a band-aid.

“We have a lot of people who want to make sure that their electricity isn't being generated by dirty fossil fuels. Now it's about making sure that they're not left behind,” Wheelock said.

About the author(s)

June Kim is a data journalist covering climate and energy. She is an M.S. Data Journalism student at Columbia Journalism School.