Unpaid utility bills owed by 680,000 residential electric and gas customers in Pennsylvania totaled $315 million in 2014, according to the state Public Utility Commission (PUC).
The debts accounted for an average of 3.4% to 4.3% of total revenue at the utilities, which wrote off an additional $216 million as bad debt and directed those accounts to collection agencies, according to the PUC report. The report analyzed debt collection and customer assistance programs at seven electric utilities and eight natural gas utilities.
Collecting unpaid utility bills is traditionally a challenge because heating and power is a basic need and state-regulated companies allow customers several months to sign up for a payment plan or to enroll in programs for low-income customers. Utility companies tend to be more willing to take on debt since energy and utility services are essential, said an official at Peoples Natural Gas in Pennsylvania.
Still, statewide, service terminations have risen steeply as more customers slid into debt. In December, the PUC found at least 24,000 Pennsylvania households began the winter without heat-related utility service - up 22% from the four-year average from 2010 to 2013.
Nearly 47,000 households serviced by Peoples - approximately 8% of its residential customers - are more than 30 days behind and owe on average $380 to $412. Total debt in 2014 reached $18.4 million, of which the utility succeeded in putting $11 million - or 61% - on a payment plan.
Duquesne Light Co. had a lower percentage of its households in debt but a higher debt load per customer. More than 22,000 customers, or 4% of the customer base, owed a combined $12.7 million to the Pittsburgh electric utility. That’s approximately $563 for each late customer.
The utility mails a letter showing the amount due when an account balance becomes overdue. The letter also includes contact information and options for payment assistance, according to spokeswoman Ashlee Yingling. The letter warns that service could be shut off within 10 business days.
According to the PUC's report, aside from debt, utilities statewide spend $460 million annually to help households pay utility bills.
"The most recent PUC data shows that 83% of the households participating in customer assistance programs were able to preserve their heat and other vital services," the commission said in a press release.