Unpaid electric bills are mounting for Tucson Electric Power customers due to the coronavirus pandemic and the recent extreme heat.
Various nonprofit social service agencies and Pima Countyβs Community Action Agency say theyβre getting unusually large requests from many lower-income ratepayers for help paying bills.
Some requests reach $2,000 to $3,000, representing several months of unpaid bills.
βIβm doing one right now who owes $2,400. The majority are between $500 and $1,000. We get some people in the $1,800 to $1,900 range,β said Nicole Cruz, a caseworker for the Salvation Army Tucson, which serves the immediate Tucson metro area.
Three factors are ratcheting up the requests:
- Because of the pandemic, TEP has had a moratorium on disconnecting customers from electric service since March. Until Oct. 31, the moratorium was required by the Arizona Corporation Commission. TEP extended the moratorium voluntarily through Dec. 31.
Because of that, many customers, beset by other economic problems, have held off paying electric bills, causing them to mount.
- The pandemic has put many people out of work. Many still employed are working at home, and use more electricity, driving bills higher.
- The extreme heat that struck from May into early November significantly drove up home electricity use and bills. May, July, August and September had their hottest monthly average temperatures on record in Tucson . October was the fifth warmest on record.
TEPβs electricity sales rose 9% from April through June 2020 and 5% from July through September 2020, compared to the same periods in 2019.
βTidal waveβ of families expected to reach out
Once the moratorium eventually ends, βI predict that there will be some shutoffs. But I think the problem is going to be so large there will have to be a relief fund set up for these families, whether at the local level or federal level, due to the sheer number of people needing help,β said Tim Kromer, outreach director for Interfaith Community Services, a nonprofit, nondenominational agency that tries to help people in need with housing, job and health-care issues.
βThere needs to be some safety net set up. There will be a tidal wave of families who need help,β Kromer said.
TEP officials say theyβre aware of the concern about growing utility bills and that theyβre trying to get customers to contact them in advance if theyβre having trouble paying.
βItβs one thing weβve tried to talk to customers about: Do what you can,β TEP spokesman Joe Barrios said. βIf you can only pay a little bit, fine. Weβre more than happy to work with you.β
On Friday, Nov. 13, the stateβs Corporation Commission will consider a proposed policy to require TEP, Arizona Public Service Co. in Phoenix and other state-regulated utilities to give delinquent customers plans to pay bills over an extended period.
The commission will face different choices as to how far to carry this idea.
Commissioner Sandra Kennedy, a Democrat, proposes allowing residents to pay off bills in 24 monthly installments, with no down payment. If customers pay the first 12-month installments on time, their remaining debt would be forgiven, under Kennedyβs proposal.
The commissionβs Utilities Division staff recommends only an eight-month repayment plan program, and opposes bill forgiveness.
βMore in a panic stageβ
More than 60,000 TEP residential customers ran behind in paying bills from April through June, the utility says. Around 35,000 were far enough behind that they could have faced shutoffs had there not been a moratorium, the utility says.
Those figures arenβt running dramatically ahead of those from earlier years, utility records show. But the total amount people owe is much higher because people are holding back paying bills much longer, social agency officials say.
Nicole Cruz
Anxiety and fear are rampant, says caseworker for Salvation Army Tucson
βThe majority of people that we see have not paid their bills since May,β the Salvation Armyβs Cruz said.
Workers install a steel frame atop the University of Arizona's Environment and Natural Resources 2 (ENR2) Building located at 1064 E Lowell St…
βThat creates all these people who know they can go months and months without paying the bill. Then, all of a sudden they get on a payment plan with TEP.β
Those seeking assistance from the agency now are split about 50-50 between those who have had assistance in the past and donβt appear desperate. First-time requesters βare more in a panic stage,β Cruz said.
βThey donβt know how itβs going to happen. When you are not using this year after year, and are living paycheck to paycheck, you are scared when your bill is late,β Cruz said. βYou can go a couple of months without paying your TEP bill and be OK and you wonβt be turned off.
βBut a lot of new people say, βMy bill is due the 10th and now itβs the 15th and Iβm going to be turned off. They are very scared, very desperate, very anxious,β Cruz said.
Many people who seek assistance these days had previously worked in hotels, restaurants or other service-type facilities that had to close or cut back dramatically because of the pandemic, Cruz said.
At first, they didnβt need help because they got $600 extra monthly unemployment payments from the federal government, she said.
Since the payments ran out July 31, βweβve had a massive amount of people coming to look for help. Theyβre looking for jobs but not getting them,β Cruz said.
Some βtake advantageβ
Cruz said the Salvation Army isnβt seeing more requests for help this year than in the past, roughly about 12 callers a day. But when she started her caseworker job 12 years ago the requests were typically only for $200 to $300, she said.
Interfaith Community Services gave utility assistance to 404 families from July through September this year, compared to 128 in the same period in 2019, the agencyβs Kromer said.
The Salvation Army office in Green Valley has also βdefinitelyβ been getting more utility requests this year than in the past since about August, said Yuni Domerofski, a social-service administrative assistant at the armyβs Green Valley Service Center.
βSome clients, I think they take advantage of the pandemic. Because the electric company canβt disconnect them, some people accumulate payments due in May and June and now they are up to $1,000,β Domerofski said.
βNot all of them. I donβt want to criticize all my clients. I see a handful of people bringing in $1,000 bills.β
Sheβs had so many requests for help β 70 in October β that on Oct. 21, she had to tell callers to call back in November, she said. She now tells callers to contact Pima County or St. Vincent De Paul Tucson, which also offers utility aid.
The Pima County Community Action Agency had a decline in requests for assistance this summer and fall, said agency director Manira Cervantes. From July to September 2020, the agency got 2,078 requests, compared to 2,915 in the same period of 2019.
As the end of 2020 approaches, she expects the number of clients seeking help to increase, assuming the moratorium expires for 2021, she said.
βKicking the bucket down the roadβ
Pima County and many social-service agencies get money to help people pay utility bills from the federally financed Low Income Home Energy Assistance Program, commonly called LIHEAP. The county funnels that money through seven nonprofit agencies, including the Salvation Army, Chicanos Por La Causa, Interfaith Community Services and Project PPEP.
Typically, the energy assistance funds run far short of whatβs needed. Statewide, the Arizona Department of Economic Security estimates that in a given year, the program supplies 5% of what low-income families need to pay their utility bills.
This year, the federal CARES Act, which provided economic stimulus money because of COVID-19, brought an extra $16 million for this program to Arizona, including $1.8 million more to Pima County. Thatβs on top of the countyβs usual share of about $3 million.
This year, that extra money should keep the county from running out of money for this program, she said. But statewide, DES spokesman Brett Bezio estimates this yearβs funding serves only 8% of those who need it, compared to 5% in past years.
The increased utility bill obligations show the moratorium on shutoffs is βis literally kicking the bucket down the roadβ and doesnβt really address the problem of too much money owed by too many people, said Mark Kear, a University of Arizona researcher and economic geography professor.
βSome sort of forgiveness has to be possibleβ
Shall unpaid utility bills be forgiven? That question is at the heart of the debate over utility disconnections that will take place Friday at the Corporation Commission meeting in Phoenix.
Researcher Kear says βfundamentally, some sort of forgiveness has to be possibleβ for unpaid rent or utility bills.
βThere is an assumption that the impact must be borne by the end user. I donβt think thatβs fair,β he said. βThere will be losses all around that should be shared by individual, the utility company and the state, the government in general.β
The commissionβs utilities division argued in a recent memo that a forgiveness policy leads to bad debt for utilities. It raised concerns that a 24-month payment deferral plan may cause unpaid balances to pile up further and make it impossible for customers to ever pay their debts.
βUnpaid balances, if and when forgiven ... may be collected from other ratepayers,β the utilities division said.
Since this yearβs shutoff moratorium kicked in, TEP has already put customers with large unpaid balances on payment plans stretching six months β two months more than the commission required of utilities last year, TEP added in a written statement to the commission. It and its sister company UNS also have donated $1 million to bill payment assistance and related programs across Southern Arizona.
Also, TEP has repeatedly distributed messages to customers via bill inserts, website updates, customer newsletters and social-media posts about bill assistance programs it offers.
But the Sierra Clubβs Sandy Bahr said todayβs unprecedented times should call for longer payback periods and some debt forgiveness.
