The proposed state budget fails to address the continued economic fallout of the pandemic by not providing additional utility debt relief to families.
By Amulya Yerrapotu, special for CalMatters
Amulya Yerrapotu is an Energy Equity Fellow at the Greenlining Institute.
As we prepare for what will likely be another tough summer, millions of families will have to make the unthinkable choice between keeping the lights on, paying their rent, getting groceries or paying for their prescriptions. Californians, especially people of color and low-income people, face mounting utility debt even as the state budget surplus reaches historic levels.
While some progress has been made in Sacramento, it has not kept pace with the reality that utility debt is an increasingly drastic emergency for millions of families.
On January 10, Governor Gavin Newsom unveiled his $286.4 billion budget proposal. While the budget is impressive in its forward-looking commitments, particularly to climate change, it fails to address the economic fallout from the continuing COVID-19 pandemic by providing no additional utility debt relief. to Californian families.
Energy customers are facing nearly $3 billion in energy service debt statewide, but have only received guaranteed relief of $1 billion. It is not enough.
By rushing into future programs without addressing the pressing current needs of Californians, this budget proposal leaves communities behind to recover from the devastating economic effects of the pandemic without help.
The most recent September 2021 data reported by utilities shows energy customers racked up $2 billion in statewide utility debt during the pandemic relief period of 4 March 2020 to June 15, 2021. That means the actual amount of energy utility debt across the state is closer to $3 billion, and growing.
As recent increases in cases and hospitalizations caused by the Delta and Omicron variants of COVID-19 have shown us, the pandemic did not end on June 15, 2021. In fact, COVID cases are the most high that they have been at any time during the pandemic. A positive test can have devastating effects, from the risk of serious illness and hospitalization and associated costs, to the risk of losing one’s salary or job. We know this crisis will continue to worsen for many already vulnerable families.
As with nearly all disasters, Black communities, Indigenous communities, other communities of color, and low-income communities experience these impacts first and hardest, and recover the slowest.
With extended federal unemployment programs and the shutdown moratorium having expired in September and a new wave of COVID sweeping the state, energy utility debt across the state has only increased. While the legislature earmarked $1 billion for energy debt relief last year through the state budget, that allocation only closes a third of an ever-widening gap.
The latest information from the California Department of Community Services and Development predicts customers won’t see relief funds until April 2022, meaning many customers will take on more dangerous long-term debt to pay utility bills in short term.
Not only do we need to sort out our response to this growing crisis, but we also need to put long-term protections in place to ensure that even more families are not at risk of having their electricity cut off.
This pandemic is not over – its impacts continue to accumulate on families across the state. As these impacts increase, we cannot afford to return to the status quo. Without further action, vulnerable Californians who already face an insurmountable racial wealth gap will grapple with growing utility debt and the risk of disconnection even as California is sure to face more dangerous extreme weather. .
We urge the Legislature and the Governor to extend the moratorium on statewide power cuts during the pandemic, to ensure that assistance is available to all Californians, regardless of utility, to give priority to those who need it most and to inform clients of the help to come. Most importantly, the legislature must pass a budget that includes at least an additional $2 billion for energy utility debt relief. Californians can’t afford less.