How Corporate Greed Leads to Utility Shutoffs for Millions

Published Feb 7, 2023


Climate and EnergyClean Water

Utilities like water and power are human rights. But thanks to corporate greed and fossil fuels, millions in the U.S. are going without.

Utilities like water and power are human rights. But thanks to corporate greed and fossil fuels, millions in the U.S. are going without.

Water, electricity, broadband, and other utilities are basic human rights. Electricity, for example, not only keeps the lights on. Families need it to access essential water, food, medical care, education, work, and more.

Yet, investor-owned utilities continually deny this right to millions. They routinely cut off power, water, and other services for those already struggling. A new report from the Center for Biological Diversity, Energy & Policy Institute, and BailoutWatch underscores the extent of the crisis in the power sector — as well as the corporate greed that worsens it.

Our Shutoff Problem is Huge — but How Huge?

The COVID-19 pandemic emphasized just how vulnerable families are to soaring utility bills. Shutoff moratoriums stopped utilities from cutting off power and water for those behind on their bills. This allowed many families to stay safe in their homes, rather than moving in with friends or staying in homeless shelters. 

But many states and utilities chose not to issue moratoriums, with deadly consequences. Our 2021 study with Cornell researchers found that water shutoff protections helped prevent COVID-19 infections and deaths. Another study estimates that a national moratorium on all utility shutoffs would have reduced COVID deaths by 15%. 

As the U.S. opened up, moratoriums expired and shutoffs resumed at an alarming rate. Right now, tens of thousands of households are at risk of water shutoffs in Detroit and Atlanta alone. 

The situation is also dire in the profit-driven power sector. The Center for Biological Diversity estimates that U.S. utilities shut off power at least 4.2 million times from January to October 2022. 

But the exact numbers remain a mystery, because 40% of states don’t require utilities to disclose electricity shut-offs. That now includes Florida, which had the most power shutoffs of any state from January 2020 to September 2021. 

We have even worse data for water shutoffs. However, Food & Water Watch estimates that in a typical year, 15 million people in the U.S. experience a water shutoff for nonpayment. We don’t even have a ballpark figure for broadband. 

Without transparent data-sharing, we can’t fully address this problem. At the same time, companies will continue hiding the extent of their greed behind missing data.

These Terrible Twelve Choose Profits Over People

From the data available, the Center for Biological Diversity identified a dozen power companies with especially egregious track records. These utilities, including giants like NextEra, Duke Energy, and Exelon, were responsible for 86% of reported shutoffs. 

While their customers went without, executives at these companies raked in an average $5.9 million a year. Moreover, from 2019 to 2021, the terrible twelve spent an average $4.9 billion each on dividends to shareholders. 

This just shows how easily companies could have prevented harmful shutoffs. They could have forgiven all the debt that led to shutoffs, and it would have cost them just 1% of the cash they gave to shareholders.

Instead, these power companies made the rich richer and denied millions their basic human rights.

Shutoffs are Part of Our Utility Affordability Crisis

These shutoffs come alongside climbing utility prices. During 2022, the national average for electricity rates rose at more than double the rate of already-outsized inflation. As a result, one in six families have fallen behind on energy bills. 

Meanwhile, water rates are growing triple the rate of inflation, leaving one in ten households struggling to pay water bills. 

The utility affordability crisis has taken a bigger toll on communities of color, often due to the legacy of racist redlining. Because of these segregating policies, communities of color are more likely to live in older housing that costs more to heat and cool. This housing is also more likely to have aging water lines and infrastructure. 

As a result, water and energy burdens — the percentage of income that these bills make up — are higher in Black communities, as well as in other communities of color and low-income communities.

The Climate Connection Behind Higher Bills and Shutoffs

One major culprit for growing utility bills: rising energy prices across the board. We can trace much of these price spikes to the volatile fossil fuel market. Global shocks, like the invasion of Ukraine, have sent prices through the roof. 

Fossil fuel corporations are taking advantage, exporting gas to the highest bidder and raising domestic prices. That, in turn, affects how much families pay for power.

For example, New England power plants depend on liquefied natural gas. Families there will pay a projected 26.94 cents per kilowatt-hour in January 2023. Compare that to the national average of 14.47 cents. 

Utilities don’t pay for the rising energy costs — rather, they pass them directly to customers by raising rates. What’s more, utilities have hiked rates to prolong the life of aging, dirty, and expensive infrastructure.

To lower prices for families, utilities could transition to cheaper renewable energy. Instead, they’ve lobbied against pro-renewable policies and clung to fossil fuel assets, while customers foot the bill.

We Must Deliver the Right to Utilities for All

It is unconscionable that investors and executives pocket fortunes, while millions of families are left in the cold and dark. It is unacceptable that utilities can entrench polluting infrastructure, when renewables would lower prices and help address the climate crisis.

The United States can relieve this shutoff crisis and deliver life-sustaining utilities for all. But to do that, we need public control and oversight of utilities and a faster buildout of renewables. We need more support for families and a permanent ban on utility shutoffs.

Toward enacting this vision, Reps. Cori Bush, Rashida Tlaib, and Jamaal Bowman introduced the human right to utilities resolution last year.

Additionally, Food & Water Watch is working in the Utility Justice Coalition. This coalition calls on Congress to recognize water, sanitation, electricity, heating, cooling, broadband, and public transport as basic human rights. 

These are the first steps toward a world with utility justice; one in which such services are accessible, safe, justly sourced and sustainable, affordable, resilient, and reliable for everyone. 

Spread this message: We need utility justice and an end to shutoffs now.

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