Utility costs are increasing, why aren't we talking about it?

introducing the long-term water bill assistance program 

​This week, Waterway NC will begin receiving applications for our long-term water bill assistance pilot program. The program, a limited, six-month program for residents of New Hanover County, will make partial payments on water bills to proactively reduce household water burden and instances of water disconnection. This program changes the way we think about assistance. It moves us from the band-aid approach- where we are constantly reacting to disconnection notices- to a proactive approach that predicts bill affordability issues and seeks to address them before they snowball into a stress event. 

Why is this program necessary? Because utility costs are rapidly rising, putting more residents at risk of losing access to water and power, and increasing the odds that they will experience major stress events like eviction or foreclosure. When we think about housing costs, we typically think only of the cost of renting an apartment or paying the mortgage on a home. But when you think of a home, you probably do not think of a place without running water or electricity.

Utility costs are housing costs. We know this because safe and dignified living cannot be sustained without access to water or power. Yet, most studies still do not include the cost of utilities when they think about affordable housing. Why? 

In short, utility costs used to be a much, much smaller percentage of household take-home pay. Why rates are rising, and why financial assistance is difficult to find, will be the topic of several upcoming blog posts. The take away is: rates have been rising for years and there is now little excuse to ignore the trends. Let's look at our local numbers. 

​In New Hanover County, for example, most households buy water from Cape Fear Public Utility Authority (CFPUA) and electricity from Duke Energy Progress. Duke Energy Progress just received approval from the North Carolina Utilities Commission to increase its rates by 10.1% this year, followed by a 3.1% increase in 2024 and a 3.2% increase in 2025- bringing a typical bill to around $162 per month. This approval follows years of rate increases and additional fuel cost fees. 

Cape Fear Public Utility Authority increased sewer rates this year and drinking water rates last year. In addition, the storm water and trash fees they collect on behalf of the City of Wilmington also increased this year. For a Wilmington resident, a typical water bill (assuming normal use) could be $117 per month now. 

Combined, these numbers show that folks can expect to spend at least $280 per month on utilities, an amount that can easily mean they are spending 50%-75% of their income on housing when added to the cost of rent or their mortgage. And this number does not consider the hard truth that low-income households spend more on utilities, since their homes tend to be less insulated and are often served by older infrastructure and less-efficient appliances. Unfortunately, the corresponding truth is that utilities must prepare for the impacts of climate change and address decades of infrastructure degradation, which means rates will only continue to go up. 

As these numbers rise rapidly, there is no corresponding rise in federal or state assistance for utility bills. If you are behind on your electricity bill, you may qualify for the Low Income Energy Assistance Program (LIEAP), a one-time assistance payment to help out with high bills in the winter. But only the lowest-income Americans are eligible. Most of the pandemic-era programs, such as those for rent, power, and water assistance, are now closed.

When someone is lucky, they may find help from their local Department of Health and Human Services, or from a nongovernmental organization like Catholic Charities or HelpHub in Wilmington. When someone isn't lucky, and their kids don't have water to take a bath or power to stay warm, they may resort to payday loans or other exploitative options that make the problem worse. 

That's why, thanks to funding from the United Way of the Cape Fear Area and generous individual donors to Waterway NC, we are excited to start this small but powerful program that will study how we can do social assistance better. If you know someone that could benefit, please pass along the application. If you are able to donate to expand this pilot to more households, please consider doing so. Either way, we cannot wait to report on the results as they come in!