Pennsylvania Utility Shut-offs

Pennsylvania’s Unaffordable Utilities and the Media Blackout on Shut-Off Casualties

by Jacqueline S. Homan

 Author: Classism For Dimwits, Nothing You Can Possess, Eyes of a Monster, and Divine Right: The Truth is a Lie

In February 2009, the Erie Times News ran a biased article denying the severity and frequency of utility shut-offs and the full impact on northwestern Pennsylvania’s poor. The article only cited spokesmen for National Fuel, the gas utility monopoly that serves northwestern Pennsylvania — including Erie, half of whose population struggles to live on less than $20,000 a year. National Fuel’s PR spin doctors lied, claiming that National Fuel does not, and has not, shut off service to those unable to pay their bills in the winter. They also claimed there was “plenty of help for those who are unable to afford their bills”, citing LIHEAP and GECAC and National Fuel’s LIRA plan (a miserly discounted gas bill whose reduction amount is based on the discretion of LIRA administrators). This left readers with the false impression that there’s “all this help out there.” Winter house fires are reported as to being caused by kerosene heaters and lack of a smoke detector; not as a result of a lack of utility service.

The article reeked with an odor of mendacity. The Erie newspaper never investigated the thousands of residents in Erie, Crawford, Mercer, and Warren Counties who have had their gas or electric shut off in the winter and who have not been able to get service restored once terminated. The Erie Times News failed to include stories from the region’s poor who have suffered through Erie winters without heat, hot water, power, and cooking fuel.

        GECAC is the main Erie social agency charged with dispensing help with utility bills through the CAP program, the Neighbor-For-Neighbor Fund, and weatherization assistance for low-income homeowners. They always run out of funds, leaving many otherwise eligible applicants without any help. But no one is talking about those who are turned away, the ones who aren’t getting helped.

        Local news media whitewashes the reports of house fires that are directly related to utility shut-offs from unaffordable rates and a very real — not hypothetical — lack of adequate help. Poor adults without children rank lowest in priority of getting helped, including the disabled and elderly. Most are turned away. Many poor households with young children also don’t receive adequate help due to funding shortfalls. One woman, wishing to remain anonymous  said that she was offered three dollars from GECAC as help toward her electric bill. For many Pennsylvanians, the protection of final resort against either dying from the cold or in a house fire from unsafe alternative heating was Pennsylvania’s winter shut-off moratorium. That moratorium was law until November 2004.

        Act 201 Passed in November 2004, Removing Pennsylvania Winter Utility Shut-Off Moratorium

        Act 201 (also known as SB 677) was passed by Pennsylvania lawmakers and signed into law by Democrat governor Ed Rendell on November 14th 2004 without the public’s awareness. Act 201 removed the winter moratorium on utility shut-offs, leaving Pennsylvania’s poor and most vulnerable citizens without any safeguard against losing life-sustaining utility service in the winter.

        Two months before Hurricane Katrina, national Fuel raised its rates significantly. After Hurricane Katrina struck in 2005, the gas utility rates skyrocketed again by another 41%, pricing out Pennsylvanians on low fixed incomes — the disabled and senior citizens on social security. Since charities and social agencies always run out of money, more than half of those in dire need don’t get helped. Of those who do, the help is not enough to stave off shut-offs. The average LIHEAP grant for Pennsylvania’s poor seniors and disabled adults on SSI with no children was a mere $157; which doesn’t even cover one month’s worth of winter heating bills. People told the National Fuel executives all of this at the public hearing right before the 2005 rate hike went through. Worker after worker gave personal testimony on their incomes and how these rate hikes would impact them.

        National Fuel executives, members of the Public Utilities Commission (PUC), and members of Pennsylvania’s state legislature were present. They ignored Pennsylvania’s working class, saying “there’s help out there for those who can’t afford their utilities.” One utility executive quipped that people “can get a second job” to pay their bills; disregarding the fact that northwestern Pennsylvania has been hard hit by permanent job losses and many are lucky if they can get one minimum wage job, never mind a second one. He disregarded the disabled and seniors who are least likely to get hired in any job, especially in tough economic times. During the best of economic times, the unemployment rate for the disabled is 96% despite the passage of the Americans with Disabilities Act (more appropriately called the Americans Who Have Been Discarded Act) because employers won’t accommodate disabled workers.

        Another National Fuel spokesman said that the utility company does not shut off utilities for low-income people with medical problems if they provide the company with a letter from a doctor. But the reality is that the region’s few doctors who accept patients on Medicaid are unwilling to provide such letters. All of this was ignored by mainstream news media.

Doctors in the St. Vincent Physicians Group, affiliated with Erie’s Catholic “non-profit” hospital — St. Vincent Health Center — have a policy of refusing to sign letters of medical emergency except where the patient is a child with a respiratory ailment. Poor older adults who are disabled, who have heart disease, or a history of pneumonia are left facing a death sentence.  Hospital admissions from existing health problems exacerbated by utility shut-offs makes them more money: such patients will need more aftercare, routine blood work and check-ups. The working class is apparently good enough to provide St. Vincent’s doctors with a bourgeoisie lifestyle in our for-profit health care system, but if you fall into poverty from job loss, disability, pregnancy and childbirth, or age discrimination, your right to life is null and void.

March 21 2006 Testimony From Sonny Popowski, Pennsylvania Office of Consumer Advocate

According to the head of the Pennsylvania Consumer Advocate Office, Sonny Popwski, a survey of LIHEAP recipients by the National Energy Assistance Directors’ Association issued in September 2005 (a few weeks after the post-Katrina rate hikes) revealed that:

·    73% of the respondents reported that they had reduced expenses for household necessities because they did not have enough money to pay their utility bills.

·    19% reported that they kept their homes at temperatures that were unsafe or unhealthy due to unaffordable utility bills.

·     24% reported that they used their stove or oven to provide heat.

·     20% reported that they went without food for at least one day per month to try and meet utility bills and avoid shut-offs.

A February 2006 report from America’s Second Harvest, the nation’s food bank network, found that 45% of their clients reported that they had to choose between paying for food and paying for utilities.

        Sonny Popowski also gave testimony before the Pennsylvania senate regarding Chapter 14 of Act 201, which replaced a large number of provisions regarding utility service rules; namely, terminations and reconnections that had previously been the subject of PUC regulations contained in Chapter 56 of the PUC Title in the Pennsylvania Code. With respect to terminations, the PUC statistics show that there was a dramatic jump in the number of terminations by Pennsylvania’s electric, natural gas, and water utilities — from 152,000 in 2004 to 242,885 in 2005.

        According to the PUC winter survey, the number of Pennsylvania households that were without heat due to loss of electric and/or natural gas service rose from 15,005 in 2004 to 17,057 in 2005; while the number of households who either had no heat or were using unsafe alternative heating methods increased from 17,654 in 2004 to 21,063 in 2005. As of February 1 2006, there were 14,533 households that were not restored and that had no heat.

        Chapter 14 modified a number of provisions from the PUC regulations regarding grounds for termination, notice, and timing of terminations — this contributed to the increase of terminations in 2005.  “Indeed, it is otherwise hard to explain how or why a company like American Water Company increased its terminations by 211% from 7,502 in 2004 to 23,302 in 2005,” Popowski said, objecting to the manner in which Chapter 14 removes the discretion over utility service rules from the PUC and gives that discretion instead to the utilities themselves. Chapter 14 put the fox in charge of the chicken coop.

        After the run-up in wholesale natural gas prices before Hurricane Katrina and subsequently thereafter, utility bills more than doubled. Governor Ed Rendell initiated the Stay Warm PA program which helped instigate the appropriation of Pennsylvania’s first state supplement to LIHEAP and called on regulators to take steps to protect customers. In October 2005, Governor Rendell announced, “We need to set reasonable standards for customers who are terminated. I will ask the utilities to agree not to charge more than $50 upfront for a reconnect fee and no more than $100 for a deposit for those being reconnected for any family under 250% of the federal poverty level. If utilities don’t agree to voluntarily establish such reasonable levels for this winter, I will look to the PUC to use its powers to make this happen.”

        It is five years later and Pennsylvanians still don’t have this “reasonable protection.” This is directly due to Chapter 14 of Act 201. Under Chapter 14, the PUC has no “powers to make this happen” unless the utilities agree to it.

        §1407( c )(2) of Chapter 14 under Act 201 explicitly allows a utility to refrain from restoring service to low-income or payment troubled customers who defaulted on two prior payment agreements — even though these payment arrangements and monthly budget plans are more than what low-income customers can reasonably afford to pay — unless the customer pays the full reconnection fee and security deposit allowed under §1404, plus the full outstanding balance upfront in cash.

        Since this is embedded in statute and not in regulation or Commission Order, the PUC is powerless to change it; even in the face of emergency anticipated from skyrocketing rates and surges in wholesale prices. Pennsylvania senator Mary Jo White attempted to address this specific issue through the introduction of SB 1005, but that bill never advanced.

        §1404 of Chapter 14 states that “the PUC commission shall not prohibit a public utility from requiring a cash deposit equal to two months of estimated bills.” This deposit can be required from “any applicant or customer who is unable to establish creditworthiness to the satisfaction of the public utility through the use of a generally accepted credit scoring methodology.” Further curtailment of the PUC’s authority governing the business practices of utilities that contraindicate the public’s best interests in what the market (the people) can reasonably bear is listed throughout Chapter 14 of Act 201.

The PUC’s hands are also tied regarding the types of termination notices that were previously required of utilities. §1405 (b)(2) states: “The utility shall not be required by the Commission to take any additional actions prior to termination.”

The average back due gas bill of disconnected Pennsylvania’s poorest customers was between $800 and $1,000 as of 2004. In the spring of 2004, Philadelphia Gas Works (PGW) shut off the gas of 15,798 customers for non-payment. Some got help from the LIHEAP crisis grant in 2005. But there are new rules. Residential customers must pay 100% of their past due bill plus a $123 reconnection fee. Extremely poor people on very low fixed incomes couldn’t afford their bills after the rate 2005 hike to begin with. They certainly couldn’t afford to pay the full arrearage plus a $123 reconnection fee plus the $372 fee assessed by PGW for gas customers whose gas had to be shut off at the street. Community Services lawyer Jonathon Stein said, “Thousands of Philadelphia’s low-income residents are without heat. They can’t afford to pay their bills, let alone these fees.” Since utility rates have already priced out Pennsylvania’s poor, they cannot keep utility payment arrangement plans because they can’t afford it. The poor are the ones most heavily penalized with excessive rates and fees. Kensington Welfare Rights Union spokesman Galen Taylor said, “Safe housing and heat are human rights. Act 201 must be repealed.”   

Sonny Popowski testified before the Pennsylvania legislature on December 4th 2009, saying, “As many of you are no doubt aware, the rate caps that have protected many Pennsylvania customers from increased electricity rates for the last decade are coming off at the end of this year or at the end of 2010. For residential customers of PP&L, which serves much of central and northeastern Pennsylvania, we know that average bills for residential customers will be increasing by approximately 30% beginning on January 1st 2010.”

This in conjunction with the imposition of the global carbon fuel tax, which is a regressive tax (however cleverly cloaked with a cap and dividend shell game) that disproportionately hurts the working class, will slap a "death by destitution" sentence on America's poor: the disabled, elderly, unemployable jobless pregnant women, children, and the involuntarily jobless long-term unemployed middle-aged workers. This isn't just class warfare; it's class genocide. Make no mistake about it.

And it is not isolated to just the US. It is part of a global jihad against the world's have-nots with the imposition of "austerity programs" and the global carbon fuel tax.


As an aside, many gas and electric utility companies across the US collect billions of taxes from their customers for the utilities’ corporate taxes – which the utilities keep instead of sending in to the government. Surprisingly, this is legal in most states (including Pennsylvania). Minnesota Attorney General Mike Hatch explained, “Essentially, utility customers pay twice: once through the utility bill and again through the lost revenue to government. That means either higher taxes for them or less government services.” When desperate poor people do what they have to do to survive, they’re accused of utility service theft. But when rich utility monopolies extort tax money from customers that they don’t turn over to the government, and when they price gouge the public, it’s called “free market capitalism.” It’s time to fight the economic terrorism wielded by the criminal cabal of economic cannibals and it’s time to place human rights above the “rights” of social predators to make obscene profits from policies resulting in the deaths of the poor.