The Los Angeles Department of Water and Electricity has made a drastic but logical decision: the utility will no longer shut off service when low-income residents and seniors can’t pay their bills. Instead, these customers will benefit from payment plans that can span multiple years, be offered incentives to help them reduce their water and electricity consumption, and, if eligible, will be enrolled. at federal programs to help poor households pay for public services.
This is a significant change, recognizing that water and electricity are essential services. It is cruel to interrupt people if they are behind on their bills due to financial difficulties.
Disconnecting service has been common utility practice when customers fail to pay their bills. That changed during the COVID-19 pandemic, when states ordered people to stay home and millions of Americans lost their jobs due to business closures. Governors in dozens of states, including California, have temporarily banned utilities from shutting off gas, water and electric customers for nonpayment. Many utilities have also voluntarily ceased cuts.
Logout moratoriums have expired, but the idea of ending shutdowns as a debt collection tactic has not gone away. In Los Angeles, defenders pushed the DWP to stop disconnections, arguing that they occur disproportionately in working-class neighborhoods, and households in majority Black and Latino communities were twice or more likely to experience closure than other groups.
Utility debt can be an effect of poverty. People who live in older homes may have less efficient heating and appliances, driving up energy bills. A broken pipe or a leak can quickly drive up water bills. DWP customers, who are billed every two months, may be shocked by surprisingly high fees that they cannot quickly repay. Moreover, customers may not even know that help is available.
Between January 2018 and January 2020, about 50,000 customers had their service disconnected, according to the DWP. Of these, only 4% had taken advantage of an energy efficiency program, and only a quarter or fewer had signed up for a payment plan or obtained federal utility assistance.
“We recognize that there are other customers who need more assistance and fewer threats,” said Board of Water and Power Commission chairwoman Cynthia McClain-Hill, who spearheaded the policy, which was adopted by the council earlier this month.
The city-owned utility planned to reinstate closings in May 2023 for customers without a discount and in September 2023 for low-income customers enrolled in discount plans. Southern California Edison, the investor-owned utility that serves much of Southern California outside of the city of Los Angeles, recently resumed disconnections.
DWP’s shutdown protection applies to about 236,000 low-income residential customers, but the utility is also considering ending disconnects for small businesses and landlords who rent to low-income tenants. Additionally, the DWP will no longer disconnect water and electric service for any customer during extreme weather events. This matters because climate change is fueling more dangerous and frequent heat waves, and the inability to operate a fan or air conditioner can be deadly.
The utility received $330 million in federal COVID-19 assistance and was able to erase debt accumulated during the pandemic for about 300,000 residential customers. There is still a need to help households that continue to struggle, but the DWP’s options are limited. As a municipal utility, the DWP cannot cancel debt. Changes to the utility’s rate structure, including its discounted rates for low-income customers, must be approved by voters. In 2012, California declared access to clean, affordable water a human right, but the state failed to provide funding to ensure that all households could afford the water.
Halting closures helps, but there’s a lot of work to make sure poorer customers can afford a service that’s getting more expensive as the utility adapts to drought, climate change and clean energy goals.