Thursday, February 12, 2009

Unemployment, Utility Terminations Rising

Currently, more than 420,000 New Yorkers are receiving unemployment benefits, up from 175,000 a year ago, which represents a 140 percent increase. New State unemployment claims more than doubled to an average of 25,000 per week in January and February 2009, compared to an average of 12,000 to 13,000 during the previous two years. See Governor Paterson, Majority Leader Smith, Speaker Silver, Minority Leader Skelos, and Minority Leader Tedisco Announce Agreement to Address Dramatic Surge in Unemployment Insurance Benefit Claims. Additional data from the state labor department reveal an increasingly bleak situation.

When workers become unemployed they typically suffer a significant reduction in household income because the benefit levels do not come close to replacing their lost income. According to The Times, "[t]he maximum weekly unemployment check of $405 in New York is lower than in neighboring states like New Jersey ($584), Connecticut ($576) and Massachusetts ($628)." New York Allots Another $2 Billion for Unemployment Benefits.

For those who were barely getting by before they lost their jobs, and who lack savings, loss of a job can quickly cause them to fall behind in paying their bills -- including bills for essential utility service.

Increasingly, utilities are cutting off service to their customers in order to collect their bills, and in some instances take customers to court to get orders for entry into customer premises to remove meters or seal lines off. See In Court With Con Ed, a Glimpse of Life During a Downturn. In 2007 about a quarter million New York customers lost their electric or gas service when they did not pay the utility. See NARUC Collections Report. The 2008 statistics are likely to show a 20% increase in service interruptions for collection purposes.

The state's official policy, stated in the public service law, section 30, is that continuous electric and natural gas service is necessary for health, general welfare, and is in the public interest. This sound public policy is obviously being compromised. See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households.

There are many protections to prevent termination of electric and gas service in the Home Energy Fair Practices Act, including the opportunity to get through economic tough times by paying arrears over time under a deferred payment agreement, along with payments for current service. For those who cannot afford that, there are programs of emergency utility assistance and HEAP that may help defray energy costs for those who cannot afford to pay their current bills.

No comments: