Powerless: Low-Income Households Facing Termination of Service with No Remedies

With New York's low-income home energy assistance program closed since mid-May, service to low-income natural gas and electric customers is being terminated for arrears they cannot afford to pay. The safety nets created by HEAP, the Emergency Utility Assistance Program, and HEFPA have become so frayed under the watch of OTDA and the PSC that many customers facing shut off now have no realistic remedies.

The federally funded HEAP program has been closed since mid-May. The OTDA vendor agreements with utilities and the New York State HEAP Plan, however, stipulate that when they receive HEAP crisis assistance - intended by federal law to "resolve" a customer's energy - they need only provide service for another 30 days. So the crisis in many situations is not really resolved, and it is punted forward into the next month. In recent years second Emergency HEAP payments have been available when the next termination notice comes in, while the HEAP season is still open. But when HEAP closed in mid-May, the remedies quickly began to evaporate. As reported by the Syracuse Post Standard,

Shut-off season is here.

After six months of cold weather, during which National Grid held off terminating service at that vast majority of households with unpaid bills, technicians hit the road in droves last month to shut off gas and electric service for nonpaying customers.

Click on graphic for a larger image.

The utility pulled the plug on 9,915 residences during May, according to the latest report filed with the state Public Service Commission.

Tim Knauss, National Grid Turns out the Lights for Central New York Nonpayers, Syracuse Post Standard, June 23, 2009.

Utilities balk at providing new payment agreements to customers in arrears. Termination notices are issued and backed up by the PSC when customers call its Office of Consumer Services Hotline (1-800-342-3377). Utilities insist on very large down payments or full payment, which the customer simply does not have.

With no effective remedy at the PSC, customers lacking the means to pay what is demanded are referred by the utilities (as required by HEFPA) to county social services departments or, in New York City, to HRA. The state-and-local funded Emergency Utility Assistance Program (EUAP), created by Section 131-s of the Social Services Law, requires local welfare officials to make a payment of up to four months' bills to maintain or restore service to a utility customer who cannot make alternative payment arrangements.

HEFPA and EUAP were enacted together in 1981 to create a utility service safety net that would keep service on through affordable payment plans with the utilities for people with temporary crises, and with public assistance when utility payment plans did not meet the need. Since then, however, OTDA has adopted administrative restrictions that result in denial of EUAP benefits.

So it is in summertime, when HEAP is no longer available, that the harsh consequences of the ill-considered OTDA restrictions are exposed.

Basically, upstate counties objecting to the "mandate" of EUAP won a legislative amendment to Social Services Law 131-s requiring applicants to repay it over 12 months, and allowing counties to sue to recover it as an ordinary debt, e.g., by using debt collectors, suing for judgments, garnishing wages, etc. Traditionally, New York law has always implied a contract to repay on the part of all public assistance recipients, when they are found to have property, so the Section 131-s amendment went a little further and more liberally allowed suits for recovery of assistance allowing court actions and judgments to be taken even if the former recipient didn't have property or wages immediately available for recovery. The provision probably created yet another deterrent so that the assistance would not be sought unless it was truly a last resort.

OTDA then went further, by adding a regulation with a restriction not contained in the statute. It provides that if an applicant had previously received assistance and had not repaid it, he could not get further assistance. The rule was lifted, at county option, last year, but only for the cold weather period. See

• OTDA Eases, but Continues, its Administrative Restriction on Assistance to Utility Customers with Incomes Above the Public Assistance Level;
• OTDA Must Relax Its Administrative Restriction on Utility Assistance Loans for Persons with Incomes Above the Public Assistance Level.
  

Bankruptcy, is an option that will wipe out indebtedness to the utility. Many cannot navigate the federal court system without a lawyer, who they cannot afford to pay, and the 2005 changes in the bankruptcy law have complicated matters further.

Unemployment is rising and more and more families are falling behind in their utility bills, and exhausting their resources. Many customers with utility shutoffs or shutoff notices are turning to charities, but charitable groups lack the resources to pay the large sums often demanded by the utilities as a condition of resuming service.

Due to the failures of the PSC and OTDA safety nets, an unacceptable number of New York households will be in the dark this summer, causing hardship, undermining the state's policy of continuous utility service, and increasing safety hazards. See

• No Electricity: Middletown Residents in Critical Condition from Lantern Fire;
• Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low Income Households.