This harsh debt collection measure is but the tip of the iceberg threatening major disruption in the lives of many customers, who require utility service for the functions of everyday life.
In 2011, Central Hudson customers behind in their bill payments received 290,720 final termination notices threatening the shutoff of service. In response to these notices, and in desperation, many may be driven into destitution, forgoing other basic needs to pay the bills before service is terminated. Some customers turn to payday lenders who may charge $20 and up per hundred dollars borrowed. A recent study funded by the Ford Foundation found that the number one use by consumers of high interest "payday loans" is to pay utility bills. See
Borrowing at High Interest to Pay Unaffordable Utility Bills, October , 2012.
A lack of utility service when it is shut off not only can lead to destitution. Costs of service termination -- negative externalities not borne by the utility -- not only fall on the affected customers, they affect others. Household members, relatives, neighbors living in the same or nearby buildings, and the public at large are at greater risk of harm when the power is cut and customers resort to less safe energy sources that can result in fires or other dangers. These public costs can include emergency public assistance, increased homelessness, illness or death due to lack of heat or air conditioning needed by vulnerable household members, emergency medical care and ambulance trips to hospitals, and not infrequently, the cost of fire, police, and other first responders when fires occur due to use of less safe energy sources, such as candles or portable heaters. See Candle Fires: A Symptom of "Rolling Blackouts" Affecting Low-Income Households.
In the Home Energy Fair Practices Act (HEFPA) PSL Section 30, which recognized the societal costs of utility service interruptions, the legislature declared that continuous residential service is needed to protect the public welfare and is in the public interest.