As utility bills continue to rapidly rise across North Carolina, utility shutoffs for nonpayment (particularly for residential customers) are coming into the spotlight. While shut offs are a long-established means of past due bill collection in the water and electricity industries, we do not often talk about what they do to the households that experience them or whether they are a sufficient indicator of affordability challenges in the service area.
So, let’s talk about them. What are shut offs? How often do they happen in North Carolina? How do they intersect with affordability?
Shut offs, also called “Disconnects due to Nonpayment” (DNP), are a last resort method used by utilities to pressure customers to pay their bills. During a disconnect, a staff person from the utility physically visits the home or business that owes the utility money and stops service to the premise- making it impossible for those in the building to use the disconnected service (water, power, etc.). Before a disconnect is conducted, utilities are often required to provide several instances of notification to the customer, which may include options to avoid a disconnect, like signing up for a payment plan or calling assistance programs for financial help.
On the one hand, disconnects are effective at getting customers to pay and we need well-funded electrical grids and drinking water systems to support healthy and successful communities. As we saw during pandemic-era moratoriums, when utilities no longer had the option to disconnect, past-due balances ballooned. On the other hand, disconnects are incredibly disruptive and stressful for the residents and families that experience them. Waterway has spoken with many customers in the middle of a disconnection, and the panic and fear they express when they cannot pay their balance is difficult to describe. What is the best policy solution?
In New Hanover County, where Waterway NC is headquartered, most residential customers receive their electricity from Duke Energy Progress and water from Cape Fear Public Utility Authority (CFPUA). Both of these utilities conduct disconnects for nonpayment, and more information is beginning to surface on how often they do it.
Let’s start with Duke Energy Progress, which has been required by the North Carolina Utilities Commission to provide a large amount of information on bill affordability as part of its participation in the Low-Income Affordability Collaborative. According to the Collaborative's final report, between February 2020 and February 2021, Duke Energy disconnected approximately 7,300 residential accounts per month.
According to a presentation to the CFPUA Sustainability Committee in August 2023, CFPUA disconnected an average of 503 residential customers each month between March 2022 and June 2023. CFPUA is not regulated by the NC Utilities Commission (NCUC) and is not currently required to regularly update those numbers. However, other water utilities such as Aqua and Carolina Water Service are required to do so. According to data from the NCUC, Aqua also averages disconnections in the hundreds per month.
While it is easy to see these numbers as sanitized statistics, they actually represent thousands of people. People who came home from work or from running errands to find that they couldn’t clean, or cook, or make food for their kids because they couldn't pay their bill. And the bad news is–households that experience disconnects because they can’t afford the bill aren’t the only households struggling with affordability. They are just the households that couldn’t find assistance in time, and thousands more are in precarious positions as well.
Like other manifestations of our current housing crisis, such as homelessness or eviction, utility disconnections are an extreme of the spectrum of affordability, not the entirety of it. Before someone gets disconnected from water, they may: borrow money from a friend, take out a payday loan, enter into a payment plan they know they can’t afford, or let the electricity bill go into delinquency instead. And, if we are only looking at disconnections as a metric, we will never know they struggled at all or how many people truly need assistance.
The truth is: disconnections (particularly extended ones) can be traumatic, full of stigma, and a threat to public health. We can, and should, significantly reduce instances of them. However, to truly ensure households can afford critical water and sewer services without losing access to other services, we must begin to look upstream of disconnect events and proactively address utility burden before it comes to that.
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Wilmington, NC 28403 910-859-2811