N.J.’s looming utility moratorium nightmare

Carla, a single mother of two school-age children, living in Newark, came to NJ SHARES before the COVID-19 pandemic looking for help with her utility bill. At that time, her arrearage was $300. Now, staring at a utility warning letter and a $4,000 bill, she has no idea how she’s going to get out from under this tremendous financial burden.

If you are a New Jersey resident who has benefited from Gov. Phil Murphy’s executive orders and the resulting moratorium on utility shutoffs, your household financial situation will soon be facing an imminent crisis. As was appropriate due to the COVID crisis facing New Jersey, the Murphy administration put emergency orders in place, including but not limited to sending most of us home from work and school to “shelter in place.” By curtailing utility shutoffs, the administration acknowledged the significant need for lights, heat and water — all essentials for the health and well-being of the population forced indoors by the pandemic.

The annual utility moratorium on shutoffs began in November 2019. Through successive executive orders, it has been extended through June 30 of this year. And, while this has been a significant assurance for many struggling residents, it also means almost 20 months of accumulating bills. The problem for tens of thousands of New Jersey households is that some have chosen not to pay their bills in order to meet other family debts during this period of record-breaking unemployment in the state. The decisions, while dire, were made easier with the utility protections in place.

Now, underlying bills have been accumulating throughout the executive orders to the point where, according to data analyzed by the New Jersey Division of Rate Counsel, overdue utility bills amounted to more than $700 million as of Jan. 1. More than 1.2 million electric, natural gas and water customers were in arrears. Of residential electric and gas customers in New Jersey, 926,960 were behind in their utility bills as of Jan. 1, with an amount totaling nearly $453 million. Of those, 489,382 are pending disconnections. And these are “old” numbers — with the shutoff moratorium extended to June 30, the “nightmare” scenario is real.

What’s the solution? New Jersey is set to receive $6.4 billion in federal assistance funds through the American Rescue Plan Act. It must be spent by 2024. New Jersey must look at its own resources and address these problems comprehensively. These same residents also will be facing evictions. The looming crisis will be so broad that the state must develop a solution and approach that will help families address all their imminent needs. Finally, the utility companies need to reexamine how they can help — thinking outside traditional assistance boxes, getting creative with deferred payment agreements, being more flexible and allowing greater time periods for customers to address arrearages.

Back in 2009, during the “Great Recession” — when we all thought 6.9% unemployment was a huge number — NJ SHARES received $10 million from the state to distribute to at-risk utility customers. We were able to commit those important funds in 10 weeks. In May, at the height of the current pandemic, unemployment hit almost 17%. We know that translates into overdue bills, unpaid rent or mortgage and desperation. We need to act now to start to chip away at the existing burdens. Waiting any longer to address the massive arrearages is a recipe for disaster during an already disastrous moment in history.

We must be prepared for what will happen to this great state when the lights finally get turned off.

Cheryl Stowell is the CEO of NJ SHARES.