Another bleak sign that consumers are slipping. I hope people are not going to face as bad of a 2009 as it is looking but the reality is, they might.
I’ve been talking about credit card companies closing down credit limits, consumers using their credit cards more to pay for routine expenses and holiday shopping being negatively impacted by credit card issuer concerns, but here is an even clearer sign that consumers are in trouble, no power.
In Pennsylvania, PPL Corp. increased shutoffs by 78% in the first three quarters of the year compared with the same period a year earlier. Shutoffs at electric utilities throughout the state increased by 20% in that period. George Lewis, a spokesman for PPL, based in Allentown, Pa., said the utility had been somewhat lax in the past but decided this year to “reverse the trend and prevent people from getting further in debt” by cutting them off sooner. About 3% of the company’s residential accounts have been disconnected for delinquency.
You know when you are getting your utilities switched off and you can’t afford to get them back on, you are in deep financial trouble.
Sure, some of the increase can be attributed to people losing homes to foreclosure, but not all of it can. If you are unable to pay for the roof over your head and the utilities to keep you safe and warm, that’s a clear sign of economic seams busting.
State regulators say they have noticed that power shutoffs have moved up the economic chain. “We’re seeing an uptick in middle-class people who have never been in this situation before,” said Eric Hartsfield, director of the customer-service division of the New Jersey Board of Public Utilities.
New Jersey’s biggest utility company, Public Service Enterprise Group Inc., said it saw a 10% increase compared with the year earlier in uncollectible natural-gas accounts, and slightly less on the electric side, in the third quarter. “We’ve been diligent in our shutoff activities,” said PSEG Chief Executive Ralph Izzo.
Rising delinquencies are occurring across the country. In New York, the amount of money utilities are owed on accounts at least 60 days past due jumped 22%, to $611.3 million in September compared with a year earlier, according to regulators.
Michigan has experienced a nearly 39% increase in electricity disconnections this year compared with last, according to statistics filed voluntarily by utilities with state regulators.
Utility companies say that the current manual process can take up to three months to get your gas, power or water switched off as a crew has to come out and flip a switch. But new digital meters would allow the utilities to cut you off on the push of a button or limit your power to a trickle until you pay the bill.
So when you are behind on bills, who do you pay first? If your choice was between the mortgage, car, utilities or food, what would you pay and let slide?
Don’t be surprised if we see smart meters installed where you have to go to the utility website and pay for your power in advance.
One company, Echelon, has been pushing these types of meters for a couple of years now.
The new meters also include an advanced set of features designed to enable utilities to offer prepaid tariff plans to their customers. Built-in prepayment features include an audible low-credit alarm, time-of-use reporting, and configurable emergency credit levels. Prepayment meters are ideal for consumers looking to manage their energy expenses. Traditionally, prepayment plans have required dedicated prepayment meters and dedicated prepayment infrastructure. With the NES system, any meter can be remotely converted into or out of acting as a prepayment meter, eliminating the need for dedicated infrastructure and meters, and the cost and consumer inconvenience associated with a service visit to change out the meter. This makes prepay features more available to consumers and lower cost and more flexible for utilities.
In addition, as with all NES meters, Echelon’s new meters enable a comprehensive set of energy services, including: two-way automated meter reading; multi-tiered billing; time-of-use and real-time pricing; remote electrical disconnect and reconnect; distribution system asset optimization; electricity outage detection and restoration management; blackout and brownout elimination; comprehensive revenue protection; real-time direct load control; power quality measurement; and extensive tamper detection features. Taken as a whole, this set of features yields significant installation, operational, and life-cycle cost savings—with a typical payback period of two to five years for most utilities.
The danger of these meters is that consumers may be charged higher rates if a prepaid meter needs to be installed. It already happens in the UK and has left those that can least afford higher utilities, paying more.
I could not find a picture of it but I’m sure there is or will be an electric meter that will allow you to swipe your card in it for service.