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California Families Need More Utility Debt Relief

CALIFORNIA MATTERS - As we gear up for what will likely be another challenging summer, millions of families will have to make the unthinkable choice between keeping the lights on, paying their rent, buying groceries or paying for their prescriptions.

Californians, especially people of color and low-income people, are facing mounting utility debt, even as the state budget surplus reaches historic levels. 

While some progress has been made in Sacramento, it hasn’t kept up with the reality that utility debt is an increasingly drastic emergency for millions of families. 

On Jan. 10, Gov. Gavin Newsom unveiled his $286.4 billion budget proposal. While the budget is impressive in its forward-looking commitments, particularly for climate change, it fails to address the economic fallout of the continuing COVID-19 pandemic by not providing any additional utility debt relief for California families. 

Energy customers face close to $3 billion in statewide energy utility debt, but have only been guaranteed $1 billion in relief. That’s not nearly enough. 

By rushing into future programs without addressing the pressing present needs of Californians, this budget proposal leaves communities behind to recover from devastating economic effects of the pandemic without help.

The most recent data from September 2021 reported by utilities show that energy customers accumulated $2 billion in statewide utility debt during the pandemic relief period from March 4, 2020, through June 15, 2021. That means the true sum of energy utility debt across the state is closer to $3 billion, and growing. 

As recent surges in cases and hospitalizations caused by the Delta and Omicron variants of COVID-19 have shown us, the pandemic did not end June 15, 2021. In fact, COVID cases are the highest they have been at any point during the pandemic. A positive test can have devastating effects, from the risk of severe illness and hospitalization and the associated costs, to the risk of losing pay or jobs altogether. We know this crisis is going to continue to deepen for many already vulnerable families. 

As is the case in almost all disasters, Black communities, Indigenous communities, other communities of color and low-income communities experience these impacts first and hardest, and recover slowest.

With extended federal unemployment programs and the shut-off moratorium having expired in September and a new wave of COVID sweeping through the state, energy utility debt across the state has only grown. While the Legislature appropriated $1 billion for energy debt relief last year through the state budget, this allocation only patches a third of a still growing gap.

The latest information from the California Department of Community Services and Development predicts customers will not see relief funds until April 2022, meaning many customers will take on more dangerous long-term debt to pay off short-term utility bills. 

Not only do we have to triage our response to this mounting crisis, we must also implement long-term protections to ensure even more families aren’t at risk of having their power shut off. 

This pandemic is not over – its impacts continue to pile on to families across the state. As those impacts grow, we cannot afford to go back to business as usual. Without additional action, vulnerable Californians who already face an insurmountable racial wealth gap will be saddled with growing utility debt and the risk of disconnection even as California is sure to face more dangerous weather extremes. 

We urge the Legislature and the governor to extend the statewide energy shut-off moratorium while the pandemic is ongoing, ensure that relief is available to all Californians regardless of their utility, prioritize relief for those with the greatest need and educate customers on forthcoming assistance. Most importantly, the Legislature must pass a budget that includes at least another $2 billion for energy utility debt relief. Californians cannot afford any less.

(Amulya Yerrapotu is the Greenlining Institute’s Energy Equity Fellow and a contributor to Cal Matters.)