The Beginning of a Deep Recession
Remember stagflation? Prices go up, money is inflated but wages are stagnant.
Bureaucracy : An administrative system in which the need or inclination to follow rigid or complex procedures impedes effective action: innovative ideas that get bogged down in red tape and bureaucracy.
We need leadership in Trenton, not bureaucracy!
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With the economy in a tailspin, more people are finding they must choose among necessities. For many, that means going without electricity.
The number of utility shutoffs in New Jersey due to lack of payment rose by 15 percent last year, jumping to 175,581 from 143,300 in 2006, according to the state Board of Public Utilities. An additional 20,316 households had gas service terminated in 2007, about the same number as the year before.
“Electric bills have shot through the roof,” said Jim Dierterle, state director for AARP, the senior-advocacy group. “The double-digit increases for the past three years has pushed lower-income folks to the point where they can no longer pay their bill in full.”
And with customers facing yet another sharp increase in electric bills next month, consumer advocates said it is likely the volume of shutoffs will jump once again.
“The crisis is going to worsen as some folks will have to make difficult choices between keeping their lights on and buying food,” said Jim Jacob, executive director of NJ Shares, an organization that helps people in need pay their heating and electric bills.
Theresa Bell, a 40-year-old part-time consultant who lives in Hasbrouck Heights, said she struggles to pay her electric bill, which ranges between $100 and $200 per month, even though she lives in a small studio apartment.
“It’s extremely hard,” she said. “I try to shut things off when I’m not home, but it still adds up.”
Bell was able to avoid having her power shut off only by taking advantage of a state program that provides one-time assistance to customers who previously had a good payment record.
The rise in utility shutoffs comes at a time when energy costs have been on a record run, leading to historic gasoline prices, increasing food prices because of higher transportation and production costs and spikes in the cost of heating and powering homes and apartments.
Since 2002, the cost of electric power in the state has more than doubled for residential customers, going from 5.06 cents per kilowatt hour to 11.3 cents, effective June 1.
Under state law, customers who fail to pay their electric bill must be given a written notice of termination 10 days before shutoff. Certain elderly and low-income customers cannot have their service shut off during the winter months, from Nov. 15 to March 15, and that provision also applies during extreme heat waves.
Beyond that, utilities vary in how quickly they shut off power to delinquent customers. Public Service Electric & Gas, the state’s largest utility, typically does not shut off service unless payments are more than two months late.
Most utility customers who have their power shut off manage to get it turned back on within days. About eight out of 10 PSE&G customers have their power restored within five days, according to PSE&G.
Others may be financially unable to restore service, or choose to live in the dark rather than go without food and other necessities.
“We’re seeing more and more cases where someone owes more than $1,000″ in electric bills, said Dierterle of AARP. “There’s more of that than ever before.”
AID PROGRAMS STRESSED
The financial stress felt by many families is straining resources of the few programs designed to help the needy keep the lights on, advocates and state officials said.NJ Shares is a nonprofit that provides one-time grants of up to $1,000 — $700 for gas, $300 for electric — to customers who need temporary help and who previously demonstrated good faith in paying their monthly bills. Last year, the program helped more than 8,100 families, said Jacob, the group’s executive director.
But, he added, “We believe we turned away about 10,000 families.”
The statewide group is funded by tax-deductible contributions, utility donations and unclaimed utility deposits. Its funding in 2007 was $4.7 million, down from the $7.9 million it had available the previous year, largely due to a one-time legislative appropriation, Jacob said.
This year is shaping up to be the heaviest for applications since NJ Shares was founded in 1998, he said. In the first three months, the group received 4,400 applications. The agency expects to help about 8,000 households this year, but that still leaves up to 18,000 households in need, he said.
“We’re a safety net, but with energy prices rising, the problem is only going to become worse for folks without a safety net,” Jacob said.
New Jersey also has an assistance program for utility customers. This year, the state expects to spend $174 million helping low-income people pay their electric and gas bills under its universal service fund. For households that make less than 175 percent of the federal poverty level, the program ensures they spend no more than 3 percent of their income on electric bills and 3 percent on natural gas.
It typically provides assistance to between 132,000 and 140,000 households each year, said Kristi Izzo, secretary of the state Board of Public Utilities, although with rising energy bills, the state is now spending more. This year’s budget is projected at $30 million more than the previous year, according to the agency.
PSE&G also has seen a jump in the need for energy assistance, said Eileen Leahey, manager of payment assistance for the utility. She cited the Low Income Home Energy Assistance Program, a federally funded, state-administered program that helps poor and low-income customers pay utility bills.
“More people are qualifying for emergency LIHEAP (Low Income Home Energy Assistance Program) assistance,” Leahey said, noting a 35 percent increase in applications during the first quarter of the year.
Tom Johnson may be reached at tjohnson@starledger.com or (973) 392-5972.
