Soaring electricity prices amid the global energy crunch have led to 20 million American households falling behind on their utility bills

  • Soaring electricity prices are beginning to take a toll on US households as they fall behind their utility bill payments.
  • 20 million US households have fallen behind their utility payments, according to the National Energy Assistance Directors Association.
  • The problem has been exacerbated by both Russia's war against Ukraine and summer heat waves.

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Russia's war against Ukraine is starting to hit home as surging energy prices lead to higher electricity bills for Americans across the country, and some are unable to keep up.

According to the National Energy Assistance Directors Association, 20 million US households have fallen behind on their utility bills, creating the worst crisis the group has ever seen. And those past due payments have led some to getting their electricity shut off amid summer heat waves.

The surging utility bills are in part due to higher natural gas prices. In the US, the price of natural gas has soared more than 150% year-to-date amid increased demand for the fuel from both overseas markets and at home. 

"Electricity prices are expected to increase significantly this summer as result of rapidly rising natural gas prices, a primary feeder fuel for electricity and a warmer summer creating additional demand for electricity," NEADA said in its summer electricity outlook.

The association projects summer cooling costs are up about 20% year-over-year to $540, representing the biggest jump in more than a decade. And there's no signs that electricity prices will fall anytime soon as natural gas prices remain at elevated levels.

Higher electricity prices has hit low-income households the most, with nearly 40% of them falling behind a monthly energy bill payment in the last year. Meanwhile, nearly one-third of US households said they reduced spending on basic household necessities, like medicine or food, in order to pay an energy bill.

Ultimately, the growth in late payments of utility bills has and will lead to more power shutoffs to homes that are behind payment.

"I expect a tsunami of shutoffs," Jean Su of the Center for Biological Diversity told Bloomberg. That could spell disaster for the well-being of millions of American if extreme heat or cold temperatures hit the US.

Some US-based utility companies have already reported a sharp jump in the number of its customers behind on payments, including PGE of California, which has seen a 40% jump since early 2020, and Public Service Enterprise Group of New Jersey, which has a 30% jump since March of this year.

While Americans have seen relief at the gas pump due to a long streak of falling gas prices from their early summer records, that relief has yet to be felt in natural gas prices, and by extension, consumers' electricity bills.

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