Wolf’s Finance World

Thousands more Missourians have had their natural-gas service shut off for nonpayment this year than in previous years, another sign of a faltering economy that’s left hundreds of thousands across the state without jobs and cost some residents their homes.

Statewide, more than 200,000 natural-gas customers were disconnected for nonpayment through October, according to data provided by utilities to the Missouri Public Service Commission. The number is up 4 percent from the same period last year, and 40 percent higher than in 2005.

Illinois doesn’t provide specific figures for natural gas disconnections.

Laclede Gas Co., which serves the city of St. Louis and surrounding Missouri counties, shut off 66,000 customers through October, up 18 percent from a year ago, according to the PSC figures. That represents more than one in 10 of the utility’s 631,000 customers, though it’s probable that some customers were shut off more than once.

The PSC doesn’t keep tabs on how many customers are heading into winter without heat, but the trend of rising gas disconnections worries regulators, consumer advocates and social service agencies, particularly because the economy hasn’t shown signs of a rebound, and frigid weather is sure to translate into steeper heating bills in the months ahead.

"We’ve got more people needing energy assistance than ever before," said PSC Chairman Jeff Davis. "Even in a good year, we don’t even have enough money to fund 50 percent of the consumers who qualify for low-income energy assistance."

The Jefferson Franklin Community Action Corp., a social service agency based in Hillsboro, has seen 1,200 to 1,500 more requests for assistance this year compared with the same time last year, said Margaret Davis, the group’s energy program director. She’s also seeing more first-time applicants who have lost their jobs or been unable to keep up with rising fuel and food prices.

"Usually, we have enough funding to carry us through." Davis said. "This year might be a little bit different."

It’s a similar story elsewhere. Nationwide, about 3 million natural-gas customers, roughly one in 20, were shut off for nonpayment last year, according to a report published Wednesday by the National Association of Regulatory Utility Commissioners. Of those, more than half were not able to have service restored, the report said.

The study, which includes data from 41 states (not including Missouri), said that almost 40 million utility customers were behind on their gas and electric bills as of May 1 and that collectively they owed $8.7 billion.

"The economy is getting worse and we are in an environment where rates are going up, and that’s true in deregulated states and traditional rate-regulated states and its becoming harder and harder for consumers to pay the bills," said Rob Thormeyer, a spokesman for the group, based in Washington.

In Illinois, Ameren utilities AmerenIP, Cips and Cilco recorded about 12 percent more net shutoffs — involuntary disconnections less reconnections — in the first nine months of the year than in the comparable period in 2006, according to data from the Illinois Commerce Commission. The figures include both gas and electric customers, because the ICC doesn’t require utilities to report them separately.

Statewide, though, the number of disconnections are similar to 2006 individual health insurance plans. Few Illinois utility customers, even natural-gas customers, were shut off in 2007 while the Legislature debated an electric-rate relief package.

MORE FEDERAL HELP

There are a couple of bright spots heading into winter: a steep decline in the price of natural gas from record highs this summer and an increase in federal energy assistance available to low-income Americans.

Congress approved $5.1 billion in federal Low Income Home Energy Assistance Program funds for the 2009 fiscal year. That’s almost double the previous year’s funding.

Missouri received about $115 million in block grants and contingency funds, and Illinois received about $265 million. In both, funds are administered by the state and distributed by local social service agencies. The funds are specifically targeted to help the elderly, disabled and families with small children.

Heat-Up St. Louis, a St. Louis-based charity that provides heating assistance, has received hundreds of calls a week from residents who have had their gas shut off or are facing disconnection, said Gentry Trotter, the group’s founder and executive director. The group has provided $300,000 in aid since Oct. 1, and Trotter estimates it will be out of cash by the end of the year without additional resources.

The organization gives priority to those most vulnerable to the cold: the elderly, the disabled and the poor who have small children. The need has been so great this year that the group has had to turn away many others, some of whom recently have lost their jobs or are seeking help for the first time, Trotter said.

"There’s a whole new group of people in desperate need of energy assistance," he said.

Among those who have received assistance from Heat-Up St. Louis is Pearley Day, 61, a part-time grocery cashier in St. Louis. Her gas service was shut off in late October, just before Missouri’s Cold Weather Rule went into effect. The rule prohibits utilities from disconnecting heat-related service on days when the temperature is forecast to fall below freezing.

Like many others across the area, Day struggles to keep up with utility bills that have risen in recent years, forcing hard choices about how to spend her paycheck. During the summer, keeping the electricity on and air conditioner running are priorities, even if it means falling behind on her gas bill.

By the end of October, she was almost $1,000 behind on her gas bill — too steep to prevent a disconnection.

"I knew it was coming, but there was nothing I could do about it," she said.

Laclede Gas and Ameren say they’re doing more than ever to encourage customers to keep bills as low as possible. They also urge customers to take advantage of energy assistance plans and area charities, such as Heat-Up St. Louis, Dollar-Help and Dollar More.

"We’ve been trying to step up our efforts to help customers use natural gas more efficiently," said Laclede spokesman George Csolak. They include reaching customers through bill inserts, Laclede’s website and a radio campaign that began earlier this month.

But energy assistance and rules prohibiting shutoffs on the coldest winter days are only temporary. Ultimately, customers have to pay their bills, or not — a reason there’s frequently a spike in utility shut-offs in the spring.

The inability of customers to pay their bills also is putting pressure on utilities.

Laclede Gas and Ameren must borrow hundreds of millions of dollars a year to buy the natural gas they sell to customers. Much of the bad debt from uncollectible bills ultimately is passed on to customers.

jtomich@post-dispatch.com | 314-340-8320

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Filed under: legal by Wolf