Lisa Simpson
Feb 8,2010
In: Finance

The Recession is Causing Many to Falter in Meeting their Utility Bills

It is not surprising that the recession is causing many problems.

It is not surprising that the recession is causing many to falter in meeting their utility bills. The electricity and the gas supply of the Cardente family have been cut off since last September. The family has been going through a bad spell – illnesses, the husband suffering an injury in his place of work, structural damage to the house because of a burst pipe and finally a job loss has turned their lives upside down. Out of the mess have emerged unpaid utility bills and mortgage dues.

Debra Cardente said that one always cleared mortgage dues to keep the roof over the head intact. After that there are the other priorities – electric or gas? Telephone or food?

The challenge has been growing for sometime – the recession has only aggravated it. About 31,000 families on Rhode Island would have their essential supplies cut off. Energy bills are nudging some into foreclosures said the Director of George Wiley Center Henry Shelton. He said that as in other states the poor many not have their utilities disconnected. But in general oil fuel heating expenses have doubled; electricity heating costs have also gone up – all in the middle of raging unemployment.
In 2008 the applications for federal energy help swelled. Congress doubled the assistance given to Low Income Home Energy Assistance Program to touch $5.1 billion. 2009 saw a record breaking 8.1 families receiving one-time grants. In 2008 it was 6.1 million. It averages to $500. For the coming year the financing by the Congress has been kept at $5.1 billion. This year fresh applications for help have increased by 20%. It means grant will contract and a good number of people would have to be turned away.

The Cardentes were lucky to get their power back by paying $3,500 towards total dues that had amounted to $10,000. They have however defaulted on a plan of $723 per month and now are applying for LIHEAP assistance.

Some of those who are unable to pay shift and open fresh accounts taking different names said John Howatt of National Consumer Law Center of Boston. There are enterprising ones who fix extension cords from the houses of their neighbours. Others warm themselves with kerosene stove that are dangerous. Howat said, “Households will do just anything to stay connected.”
New Jersey has won laurels for its programmes that give heating coverage to the maximum number of those from the low income.