Utilities took public money, turned off people’s lights during pandemic

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Image of article titled Utilities took public money, gave CEOs millions, then turned people's lights off during pandemic

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A new report reveals that some of the country’s most powerful utilities raked in millions of dollars in taxpayer bailout funds last year, while continuing to shut down service to households across the United States during the pandemic.

The report, released Thursday by the Center for Biological Diversity and BailoutWatch, examines states with publicly available data on utility cuts. In the 17 states where there was data on outages, the report found that the 16 utilities operating in those states cut electrical services for their customers almost a million times between February 2020 and June 2021. (For some background on cuts during a normal, pandemic-free year, the U.S. census found that 1.2 million households in 50 states reported experiencing blackouts within three months of participating in the survey in 2017, the latest Census Bureau data available on disconnections.)

Offenses here are not shared equally by the utility industry; there are mostly bad actors. The report highlights six utilities that were responsible for 94% of all shutdowns last year. NextEra, Duke Energy, Southern Company, Dominion Energy, Exelon and DTE Energy constitute what the authors call a “Hall of Shame.” NextEra alone, according to the report, accounted for more than half of all stops.

The scan also looked at financial documents, including proxies filed with the Securities and Exchange Commission before a company’s shareholders’ meeting, to calculate how much money these 16 utilities received from the government under relief efforts during the pandemic. The CARES law was originally designed to help struggling businesses pay workers, but utilities took advantage of loopholes in the law that changed the way large businesses could report their taxes. (The CARES Act has also disproportionately benefited oil and gas producers: BailoutWatch, one of the authors of this report, also used financial documents to show how oil companies laid off thousands of people and yet still gave raises to their CEOs during the pandemic, while taking handouts from the government.)

The Federal Reserve bought corporate bonds in the secondary market at the start of the pandemic, which utilities in this analysis were also able to take advantage of. “They did it primarily to support the debt market and facilitate lending, so that these companies can continue to access capital to deal with the pandemic, which they have done with great success,” said Christopher Kuveke, BailoutWatch researcher and co-author of the report.

The results are quite shocking. Nine of the 16 companies surveyed obtained a total of $ 1.25 billion in federal government tax bailouts; it would have cost only 8.5% of that, according to the report, to avoid cuts for all customers who experienced it last year. All utilities except NextEra could have paid for all of their customers’ downtime with the money they got. In some cases, the analysis revealed that they could have done it “hundreds of times”.

Duke Energy, for example, disconnected nearly 183,000 homes during the timeline of the analysis. The prevention of these closures would have totaled approximately $ 19.4 million. It’s not much of a small change if you’re sensitive to utilities’ bottom line, but Duke’s report shows the company got $ 633.5 million in CARES Act benefits. CEO of public service received compensation in 2020 valued at $ 14.5 million even as residents lacked electricity amid the economically overwhelming pandemic.

Southern Company, another Temple of Shame member, cut power to more than 187,000 homes. Failure to do so would have cost almost $ 19.9 million to prevent. The company earned $ 35 million in benefits under the CARES Act, but still found the money to pay its CEO compensation valued at $ 22.4 million Last year.

Utility cuts can be ruthless and extreme, hitting low-income families suddenly and without warning, even if they are pennies behind. A lawyer Earther spoke recently said he had heard of a family whose electricity was cut off in the middle of winter for a 37-cent delay on their bill. The cuts can also have real ramifications for public health, especially during a pandemic where staying indoors was the order of the day. Research of the nonprofit National Bureau for Economic Research estimated that if a nationwide ban on utility cuts had been enacted at the start of the pandemic, covid-19 infections would have been reduced by 8.7%, while deaths would have been reduced by a shocking 14.7% over the next nine months.

“The most heartbreaking part of this data is that [the utilities] could have saved so many households from the terror of closures during covid, if they had directed a tiny fraction of their dividends and CEO payments to families and saved them during this pandemic, ”said Jean Su, senior lawyer at the Center for Biological Diversity and co-author of the report.

Some governments have attempted to expand aid to vulnerable people: At the onset of the pandemic, 32 states and Washington, DC, enacted forms of moratorium that would prevent cuts to public services during the pandemic. However, state governments eventually let these withholdings expire. Since September, New York is the only state to have a moratorium still in effect. To their (minimal) credit, many large utilities have come together to implement voluntary shutdowns at the start of the pandemic. However, the major pressure groups in the public services Successfully convince the Congress not to enact a national ban on closures, which has exempted them from any federal action.

It’s all maddening, but it’s even more maddening when you think about the data we not have on utility shutdowns. Even though they provide vital services to Americans – many of whom are captive customers who, due to the operation of utilities in this country, often have no other choice of supplier – utilities’ reporting requirements are obscure. As the report notes, there is no federal mandate for utility companies to provide information about the outages.

The information in this analysis excludes 23 states that do not require the release of stop information (it also excludes 10 states that had in place stop moratoria and had no stopping data to report). This report adds to the growing pile of evidence that the way we deliver electricity in this country and the way utilities are overseen need a serious overhaul – and quickly as the country and the world rush to electrify everything.

“Public services are fundamentally a public service,” Su said. “They got taxpayer money, and they didn’t even use it for public purposes.”


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