Delawareans struggle to heat their homes

With monster utility bills, many are falling behind on Delmarva payments
By AARON NATHANS, The News Journal

Posted Sunday, March 2, 2008

Leslie Lee, management analyst for the Delaware Department of Health and Social Services, will administer energy assistance to 14,000 families -- 1,000 fewer than last year. (Buy photo)

The News Journal/SUCHAT PEDERSON
Nicole Chandler of Wilmington is about $2,000 behind on her Delmarva bill. The power company last week threatened to shut her off completely if she didn't pay $535 right away. She was able to hold them off with $250 and a payment plan.

Chandler asked for federal assistance to pay her electricity and heating bill, but the government said no. Chandler, a single mother with three children, makes too much money as a phlebotomist at a local hospital.

"The heat bill is out of control," she said.

Lewanda Jackson of New Castle said that she, too, was almost $2,000 behind on her Delmarva bill, but has been able to catch up and is now $300 behind. She was getting severance money from a job on which she'd been laid off, but it was too much for her to qualify for assistance, so she couldn't put money away in case she didn't find a job after the checks stopped coming.

"I have had to sacrifice other things and put my electric bill first," Jackson said. "Everyone I know has the same problem."

Chandler and Jackson are examples of a growing number of lower-to-middle-income customers who are falling behind on their heating and electric bills. Making matters worse, as energy prices rise, the amount reserved for federal assistance is shrinking.

About 35,500, or 13 percent, of Delmarva Power's 269,000 residential customers in Delaware have fallen behind on their payments, said Delmarva spokeswoman Bridget Shelton. That's up from about 30,000 at this time last year.

And the average delinquent amount of $462 is up about $30 from last winter, Shelton said. A person is considered delinquent on a payment if they fail to pay a monthly bill in full, Shelton said.

Of the homes that have past-due accounts, 429 have been disconnected, Shelton said. That's up from 371 at this time last year, but Shelton said Delmarva will generally keep the lights and heat on as long as customers show a good-faith effort.

"We encourage our customers to call us," Shelton said. "If you're falling behind, we'll set up a flexible payment plan. Buy yourself some time."

While a national trend, the problem is pronounced in Delaware as Delmarva's electricity rates increased 59 percent in May 2006 in the wake of rate caps coming off. Amid higher coal prices and volatile natural-gas prices, Delmarva and the Public Service Commission announced earlier this month that rates would increase another 1.9 percent starting June 1.

Despite the challenging market trends, Delmarva was able to lock in prices for natural-gas heating customers that were lower than last winter. The average monthly heating bill is estimated at $170.37, down from $177.38 last winter.

Many who get heating oil from independent dealers, however, are paying more. Heating oil is selling to residential customers for about 55 cents a gallon more this winter than last, said Pete Horrigan, president of the Mid-Atlantic Petroleum Distributors Association.

Chesapeake Utilities, which sells natural-gas heating, reported that 3 percent of its customers are behind on their payments, close to the same rate as last winter, said Jeff Tietbohl, spokesman. The number of disconnects is about 1 percent of its customers, he said.

People who buy heating oil from independent dealers are trying to find ways to deal with the price increases.

"People are attempting to conserve," said Horrigan, of the Mid-Atlantic Petroleum Distributors Association. The industry has made a big push for people to get their heating equipment checked, tuned up, and when necessary, replaced. Modern equipment can pay for itself in fuel savings, he said.

"It doesn't take many years to get your investment back," Horrigan said.

Leslie Lee, management analyst for the Delaware Department of Health and Social Services, said the number of homes with electricity disconnected is a sizable number, but small enough that a little more government assistance could make a big difference.

Mark Wolfe, executive director of the Washington, D.C.-based National Energy Assistance Directors' Association said lower-income people are paying for energy out of the little discretionary income they might have.

People's incomes are not keeping up with the price of electricity, he said.

"The issue is that energy's becoming less and less affordable, and government programs have not caught up with the increase in energy prices," Wolfe said. "The price increases have been relentless and getting worse."

Last winter, Delaware was allocated enough Low Income Home Energy Assistance Program (LIHEAP) money to serve 15,000 households. This winter, it's looking like there will only be enough to cover just 14,000, Lee said. There's a waiting list for assistance of about 200, in case more funding comes in, she said.

But it's not just the poor that are having trouble keeping up with their heating and electric bills. An increasing number of people living above the poverty line, who are not eligible for heating assistance, are struggling to keep up with their bills.

"We're seeing more inquiries from people who wouldn't normally ask for help," Lee said. A number of people came to "energy fairs" held throughout the state to advertise the assistance programs, but many realized they were not income-eligible, she said.

For instance, a four-person household cannot make more than $41,300 to be eligible for heating assistance, she said.

Not only is the number of families receiving federal assistance declining, the amount they are receiving is also dwindling.

In 1985, the federal government allocated Delaware about $6 million for LIHEAP, Lee said. Today, it's $6.8 million. In '85, federal energy assistance helped with about 45 percent of someone's bill, she said. Today's, it's more like 15 percent, she said.

Additional LIHEAP funding for crisis situations is at its lowest point since 1999, Lee said.