Utility companies raked in bailout money and shut people's lights off anyway

Yaorusheng/Moment/Getty Images
Originally Published: 

As the coronavirus pandemic raged (well, first raged, since it continues to do so), utility companies across the country got a bailout. Through the CARES Act, the federal government distributed a collective $1.25 billion of taxpayer money to a handful of gas and electric companies to help them keep the lights on through a challenging time. Those companies did not extend the same generosity to their customers. According to a new report from the Center for Biological Diversity and BailoutWatch, utility companies cut the lights on more than 1 million households in the midst of the pandemic, despite receiving more than enough bailout money to forgive late payments many times over.

The report looked at data from 16 utility companies operating in 17 states and found that 990,234 households had their power cut off between February 2020 and June 2021 — and odds are the figures are much higher than that nationwide. Forgiving late payments from customers who were ordered to shelter in place and left unable to work would have cost just 8.5% of the total bailout funding made available to these firms. While some states mandated that utility companies suspend shutdowns for a period and some companies even took it upon themselves to offer extensions to customers who were unable to pay, the forgiveness ended long before the pandemic did. By summer 2020, gas and electric firms started switching off the power for people who were behind on payments.

Now, if you were being particularly generous to utility companies, you might argue, "Sure, the bailout money could easily cover the costs of unpaid bills in the middle of a global health crisis, but that's not what it was for. It was made available so that these companies could continue to pay their workers." You would be right. Of course, you know that's not actually what these companies did with all that money either, right? The analysis found that utility firms that received bailout money took advantage of corporate loopholes and allowed the industry to "[break] records for executive compensation."

That's right: Instead of keeping the lights on for millions of struggling Americans, these companies funneled more money into the pockets of their already wealthy executives.

America is in the midst of a utility debt crisis. According to the National Energy Assistance Directors' Association, there is a projected $28 billion in unpaid utility bills across the country. That figure represents a 42% increase over pre-pandemic levels. As many as 15-20% of U.S. households are at least 60 days behind on their gas or electric bills. People are struggling to cover the cost of essentials, and even the American Rescue Plan, passed earlier this year, has come up woefully short in providing necessary relief. The bill set aside $4.5 billion through the Low-Income Home Energy Assistance Program to cover utility bills, but that doesn't come close to addressing the number of households that are currently behind on payments.

One simple solution to this problem would be for utility companies to forgive some of the outstanding bills and keep the power running for people as they continue to get back on their feet — an act that would barely put a dent in the bailout packages extended to the utility industry. Instead, they lined their pockets, bolstered their bottom lines, and left Americans in the dark.