Tuesday, September 06, 2022

Europeans Won't Be Shivering In The Dark By Themselves

marketwatch  |  As European governments struggle to contain the fallout of soaring energy costs to their citizens, the U.S. may also be facing a brewing crisis with an estimated 20 million households struggling to pay their utility bills.

Representing one in six households, the eye-popping number comes from a study at the National Energy Assistance Directors Association (Neada) that was highlighted in a Bloomberg report earlier this week. The total amount in arrears amounted to $16 billion in June, just under the highest number so far this year — $16.5 billion in March.

“So before the pandemic, it was about $8 billion…and then the number doubled,” the author of that study, Neada’s executive director Mark Wolfe, told MarketWatch on Thursday.

Those 20 million households — largely low-income — can be anywhere from 30 to 90 days in arrears on utility payments, said Wolfe, who has been tracking the data for about 10 years.

Jean Su, a senior attorney at the Center for Biological Diversity, which tracks utility disconnections across the U.S. told Bloomberg that she expects a “tsunami of shutoffs.”

The rise in the cost of living was at a 40-year-high at 8.5% in July compared to the year before. Grocery prices continued to soar — the price increase was 13.1% compared to the same period last year. Many Americans reported they have already dipped into savings to pay for bills and bought smaller package sizes and cheaper alternatives to cut down on costs.

Because of the rising costs, lower-income Americans are already struggling to pay back credit-card loans and purchase big-ticket items like automobiles, Radha Seshagiri told MarketWatch previously. Seshagiri is the public policy and system change director at SaverLife, a nonprofit that helps families with low and moderate incomes to save money.

Residents living in rural areas were seeing even bigger impacts of inflation and the recent rise in energy costs, according to a report by Iowa State University professor Dave Peters, which studied the impact of inflation in small towns.

“The biggest inflationary impact on rural households has been the increased cost of transportation, which is essential in rural areas where residents have to drive longer distances to work, school, or to shop for daily needs.” Peters wrote in the report.

Rural people are paying $2,470 per year more for gasoline and diesel fuels than they did two years ago, while urban dwellers are paying $2,057 more, according to the report.

 

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