US utilities cut off power to millions, amassing profits
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Firms could use only a small portion of their investor and CEO spending to cancel debt for all households where electricity was lost, as per the new analysis.
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Utilities cut service 1.5m times during the first 10 months of 2022. (AFP)
A new analysis of industry data showed that some of the US's top utilities cut power to millions of struggling customers in recent years while spending billions of dollars on stock buybacks, dividend payments to shareholders, and executive compensation.
Firms could use only a minimal portion of their investor and CEO spending to cancel debt for all households where electricity is lost, according to the analysis.
The shut-offs disproportionately affect low-income and minority consumers, and the "harrowing" scenario is driven by corporate greed, according to Selah Goodson Bell, research co-author and energy justice campaigner with the Center For Biological Diversity.
Loss of power has a terrible effect on a home, including health and safety. "Shutdowns enable corporate utilities to penalize customers' economic insecurity while ensuring record profits and enormous payments for themselves and their investors," the report's authors stated.
It is enabled in collaboration with utility industry analyst Energy and Policy Institute and BailoutWatch.
During the first ten months of 2022, utilities cut service 1.5 million times in the 30 states where shut-off data was available and an estimated 4.2 million times nationwide.
The data also shows that the problem is worsening: between 2021 and the first ten months of 2022, the number of electric shut-offs increased by nearly one-third, while gas shut-offs increased by 76%.
With almost 500,000 shut-offs throughout that time span, Illinois led the way, followed by Pennsylvania, Georgia, Michigan, and Ohio.
Exelon Corp, the parent firm of utility behemoths such as ComEd in Illinois and Peco in Pennsylvania, reported 648,000 power outages. The Southern Company, DTE Energy, Ameren, and FirstEnergy followed.
The analysis emphasized how little utilities would have to reduce dividends, stock buybacks, and executive pay to forgive customer debt. It looked at financial reports from 12 significant utilities responsible for 86% of the power outages between January 2020 and October 2022.
Each paid roughly $4 billion on dividends on average, and consumer debt from their cumulative 4.9 million shut-offs accounted for about 1% of their dividend spending.
Rising gas and electricity prices are a factor, but so are regulatory decisions that allow businesses to pass on additional costs to customers.
Utilities also continue to invest in capital-intensive projects that, although beneficial to investors, are not always beneficial to consumers, who could profit from community solar, rooftop solar, or other distributed energy sources.
As climate change causes more intense heat and cold, low-income customers who can't afford the extra use of a furnace or air conditioner face increased pressure.
According to the authors, fixing the situation would necessitate standard federal record keeping, a halt to new fossil fuel investment, and the prohibition of punitive billing methods.
States could tax utility revenues to pay off customer debt, create more effective debt relief programs, erase consumer debt, and create a payment plan based on a proportion of income.
Read next: UK asks EU for emergency aid, extra power, to avoid blackouts
