Michigan activists are calling for a federal bailout of utility customers as a starting point for helping people who have been unable to pay bills during the pandemic and now face mounting debt and service cut-offs.
The Michigan Environmental Justice Coalition, which represents 50 organizations statewide, is rallying support for the Maintaining Access to Essential Services Act of 2021. The legislation would offer forgivable, low-interest loans to utilities that eliminate customer debt and agree to suspend service disconnections.
The need is particularly dire in Michigan, supporters say. State regulators reported in May that over 1 million utility customers held about $325 million in past-due debt.
“It’s nothing short of a scandal that in the richest country in the world, in the middle of a deadly pandemic, American families are having to worry about whether they’ll lose the utility access they need to survive,” said U.S. Rep. Rashida Tlaib of Michigan, who plans to introduce a House version of the bill Thursday, in a statement to the Energy News Network.
In Michigan, those struggling families can be found everywhere from the remote, rural Upper Peninsula to the metro area of Detroit — the lowest-income large city in the country. A recent poll by the Michigan Environmental Justice Coalition and We Want Green Too found that almost a third of the 650 residents surveyed in those regions said they were worried about being able to pay their utility bills.
Many of those who had experienced electricity shutoffs before reported having to temporarily leave their homes, which can disrupt access to childcare and the ability to work. And reconnection fees added to unsustainable financial challenges.
“The impact of an unaffordable power system is that we punish people for being poor over and over again,” said Bridget Vial, the environmental justice coalition’s energy democracy organizer.
Highland Park resident Kiara Marie said her situation illustrates how the utility system economically oppresses low-income people by demanding unreasonably high payments and cutting power for non-payment. The underemployed mother works in the service industry and the pandemic has significantly reduced her income.
She said she is finally in a spot where she’s turning a corner, but she still owes DTE Energy around $3,000. Every time she starts to chip away at the total, she hits another pitfall.
“I’m at a stage where I’m fixing my credit, fixing my finances, but I keep hitting these roadblocks,” Marie said. “This system was designed for me to be right where I’m at. It’s designed for us to pay more, not for us to have sustainable access” to electric and gas.
DTE recently shut off her power as she was attempting to make a payment, she said. She’s received assistance via DTE’s low-income programs and nonprofits like Soulardarity, but she still can’t seem to get a handle on her debt.
Detroit resident Nicole Conner, a single mother of two, has faced regular shut-offs. When it happens, she lights candles and usually loses a bit of food in the fridge. She’s currently living off of about $400 per month, and DTE wants $200 monthly payments to keep her lights on, she said. The math doesn’t work out.
“Everybody I know is struggling with their DTE bill, because paying it off is a very long, drawn out, expensive process,” Conner said. “A lot of time they don’t pay it because it becomes too much, and a lot of people I know have it shut off.”
DTE Energy spokesperson Peter Ternes said the utility it has three programs available to assist low-income customers, has forgiven $4 million in debt during the pandemic and donated around $10 million to agencies that assist low income customers.
“We have been determined to help those in need throughout the COVID-19 crisis and beyond,” Ternes said.
Most utility customers nationwide received a reprieve last year, but utility shut-off moratoriums have expired in all but five states. Michigan never ordered utilities to stop cutting service during the pandemic, but utilities reduced the number of shut-offs by about 75%. Meanwhile, the state is also home to some of the highest and fastest-rising electric rates in the country. Federal data shows that the state saw the nation’s second-highest jump in electric bill costs in 2020.
DTE this year attempted to change one of its low-income customer programs to make it easier for the company to cut power and impose reconnection fees, but the Michigan Public Service Commission rejected the proposal. The company also came under fire last week when campaign finance records revealed it was the largest funder of a campaign against a sweeping anti-poverty measure that Detroit voters will consider on Aug. 3.
The Maintaining Access to Essential Services Act was introduced in May by U.S. Sen. Jeff Merkley of Oregon.
Just as the moratoriums didn’t solve the root causes of utility debt, the new legislation would represent a one-time fix, and activist groups like the Michigan Environmental Justice Coalition are pushing for a payment system based on a percentage of income for low-income residents. Several states have such structures in place, and Vial said that it would reduce debt while relieving stress on struggling residents. More broadly, she said the nation needs to make a push toward publicly owned utilities, which the coalition views as a more responsive model.
“The system needs to change and that is the political imagination that we need to have in order to address problems like this,” she said. “But taking this action right now when you have loads of families facing looming shut-offs for energy and water, and on the brink of losing housing — it’s so critical to stop the bleeding.”