100,000-Plus Kansans Struggle To Pay Utility Bills And That Could Mean Higher Bills For Everyone
Utility companies are starting to collect information about how the pandemic cost them money — data they might use to argue for rate hikes.
WICHITA, Kansas — The blow the coronavirus dealt to the Kansas economy left tens of thousands of people in the state struggling to pay their utility bills.
That puts them at risk of losing electricity or natural gas — and raises the prospect that better-off Kansans weathering price hikes to make up the difference.
Utility companies say the number of households unable to keep up with payments looks likely to increase during the winter. Agencies that help the poor pay for utilities are braced for more requests than they can cover.
“I’m not going to lie. I’m a little nervous about this coming year,” said Lewis Kimsey, the manager of the Kansas Low Income Energy Assistance Program, or LIEAP.
That federally funded program offers financial assistance to utility customers based on income, household size and other factors. It’s available to Kansans between the months of December and March.
This year, Kansas got about $47.5 million dollars. About 10% goes to administration costs. Another 15% goes toward weatherization programs. The rest is used to help low-income households pay utility bills.
Kimsey said he’s actually seen a decline in the number of people applying for the program each of the past 5 years. Even this year, with an expanded deadline that went through May, Kimsey said the agency only approved about 34,000 applications, which is 600 fewer than last year.
He said some of the effects of coronavirus-related hardships will be delayed, and that we’re likely far from the peak of people needing assistance. That’s because earlier this year people got beefed-up federal unemployment checks and the state of Kansas declared a moratorium on all utility disconnects. Both of those have now gone away.
“Now that moratorium is done and they’re feeling pressure,” Kimsey said. “We’re planning that our application volume for 2021 is going to be significantly higher.”
100,000 Kansans struggle
To gauge the toll of the pandemic on the industry, several utilities asked state regulators to record their increased costs for things such as personal protective gear and laptops for employees to be able to work from home. That tally could give the companies ammunition the next time they ask regulators to raise rates to customers.
State regulators are also curious about how many customers are behind on their bills or being involuntarily disconnected from service. The reports give a fresh look at the scale of the problem.
In August, Evergy, the state’s largest electric utility, had 100,050 residential accounts that were either more than 30 days past due — or that had signed up for a 12-month payment plan that evens out outstanding utility costs across the year.
That’s more than one in 10en of all residential customers.
Evergy spokesperson Gina Penzig said the company started reaching out to customers on the brink of being disconnected in early June to offer them the 12-month payment plan.
“The payment plans are a valuable tool in order to give customers an opportunity to keep their account current, keep their service engaged,” Penzig said.
And it seems to have worked. In June, just 3,283 residential customers signed up for a 12-month payment plan. Two months later, that number rocketed six-fold to nearly 20,000.
Penzig says the increased adoption of the payment plan has kept involuntary disconnections about the same as they would be in a normal year.
And even though high winter heating bills have yet to hit, the state’s larger natural gas providers are already seeing evidence that customers are struggling to keep up.
In August, almost 75,000 Kansas Gas Service residential customers were more than 30 days past due or had signed up for a 12-month payment plan.
That’s about 13% of residential customers.
Kansas Gas Service spokesperson Lindsay Freeman said the company has also tried to help people apply for payment help and sign up for the 12-month payment plan.
“We can still work with them on payment options and arrangements, but they must reach out to us,” Freeman said.
While 12-month payment plans have helped remove customers from the bad-debt list and prevented involuntary disconnections, the relief may be temporary
“We hope that the 12-month payment plans are going to work out, that they’re not just pushing the problem out,” said David Nickel, consumer counsel with the , a government agency that represents consumers and small businesses before state regulators.
Jim Zakoura, president of the advocacy group Kansans For Lower Electric Rates, said he’s skeptical that unemployed people without the extra federal unemployment benefits offered earlier in the year will be able to keep up with the plans in the months ahead.
And Zakoura said other ratepayers may get stuck with higher bills.
“All of those expenses will be included in the next rate case and will be added to the bills of customers who can pay,” he said.
Kimsey, the Kansas LIEAP program manager, said looking at the tens of millions of dollars in unpaid bills out there is shocking. But, the program has money — he just needs more people to apply.
“I’d much rather have people apply and not qualify,” he said, “than have people not apply that qualify and are in desperate need of the help.”
Brian Grimmett reports on the environment, energy and natural resources for KMUW in Wichita and the Kansas News Service. You can follow him on Twitter @briangrimmett or email him at grimmett (at) kmuw (dot) org. The Kansas News Service is a collaboration of KCUR, Kansas Public Radio, KMUW and High Plains Public Radio focused on health, the social determinants of health and their connection to public policy.
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