If companies make investments in old and dangerous technology, jeopardize public safety, jack up prices, pay executives outrageous salaries, pass all those costs on to customers and then deny some folks their product, you would think those companies go out of business. Not so with corporate utilities, who deal in the life-and-death provision of electricity and essentially hold consumers hostage to dirty power and high rates.
A recent report we authored, “Powerless in the United States,” exposes the utility industry profiteering that we found has deprived households of power more than 5.7 million times since 2020 while returning billions of dollars to shareholders and executives.
Utilities’ dangerous, short-sighted overinvestments in fossil-fuel infrastructure are driving fossil fuel price volatility and perpetuating the shutoffs crisis. And it’s all happening in the midst of catastrophic climate change that’s upending communities across the country with deadly blizzards, floods, fires and heatwaves.
The true scale of the shutoffs crisis is hidden: 20 states don’t require corporate utilities to provide any disconnections data.
It doesn’t have to be this way.
Federal and state regulators and lawmakers can address the roots of the disconnections epidemic and prevent needless suffering. Access to electricity is a human right. Families rely on it for their physical safety, food security, medicine and communication. Power shutoffs and mounting utility bills and costs of falling behind can trap households in a vicious cycle of poverty. This energy insecurity makes it harder to keep a job, keep kids in school, put food on the table and get loans or a mortgage.
Communities of color bear the brunt of energy insecurity. Decades of discrimination, including racist redlining, have left these families in structurally deficient housing that costs more to heat and cool. Last year, more than 20 percent of families couldn’t afford to pay at least one energy bill. The rate was 50 percent higher for households of color. In 2022, when inflation was soaring and Americans were struggling to afford basic necessities, electricity disconnections jumped nearly 30 percent compared to the year before, we found.
Our report documents that 12 utility companies were responsible for five out of six of those shutoffs. Astoundingly, just 1 percent of their dividends to shareholders could have prevented all the disconnections. Those same companies paid top executives an average of $5.9 million a year since 2020.
The current utility business model is broken, racist and incompatible with the climate emergency. Utilities have apparently guaranteed short-term windfalls for their shareholders at the expense of customer safety, affordable bills and the reliability and resilience of the system we depend on for live-saving heat, cooling and refrigeration.
Here are some key federal and local policy opportunities to begin improving the corporate utility system driving this chronic problem.
- Require utilities to disclose disconnections data. The U.S. Energy Information Administration should create a federal disconnections database. State utility regulators should require monthly utility reporting on disconnections, including demographic data.
- Ban utility shutoffs. Congress should enact a nationwide ban on the barbaric practice of utility disconnections for nonpayment. Governors, state legislatures and state regulators can enact permanent state moratoriums for customers who meet poverty criteria and can’t pay their bills.
- Invest in debt relief measures. Utility debt has doubled since 2019 to a staggering $20 billion. Congress can forgive unpaid debt by taxing utility profits. State regulators should create income-based payment plans to prevent the buildup of cost from falling behind on utility bills.
- Ditch the fossil fuel era for resilient clean energy and stop the utility profit grab. To rapidly transition to a resilient and just clean energy future, we need to stop fossil fuels at the spigot. Instead of expanding fossil fuel production faster than former President Trump, the Biden administration should stop all fossil fuel production. State utility commissions should also oppose utility efforts to block distributed solar and require utilities to shoulder the cost of fossil fuel price volatility. State legislatures should establish distributed rooftop and community solar programs, prioritizing environmental justice communities that suffer the brunt of the racist fossil fuel-energy system.
The preventable practice of disconnections keeps millions of Americans in poverty and narrows their avenues of escape. Our government and regulators must confront this fossil fuel-soaked energy system that shackles millions of families to a lifetime of debt while blocking access to desperately needed renewable energy solutions like rooftop solar.
Until then, they’re allowing utility executives and shareholders to profit from a system that’s worsening the climate emergency, subjecting more Americans to deadly climate extremes and punishing people for being poor.
Selah Goodson Bell is a campaigner at the Center for Biological Diversity.
Shelby Green is a research fellow at Energy and Policy Institute.
Christopher Kuveke is a data analyst at BailoutWatch.
They are co-authors of the report, “Powerless in the United States.”