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Greater Lowell utilities see bills go unpaid as more customers struggle

By Alexandra Mayer-Hohdahl,
Updated: 01/02/2009

"It's more of a struggle now that we get these cases of people losing their jobs," says Savas Danos, general manager of the Littleton Electric Light and Water Department
After successfully battling the avalanche of power outages that followed a devastating ice storm this month, electric companies throughout Greater Lowell ended 2008 on a high note.

Their customers, however, are not faring as well.

Many of them have been struggling to pay their electricity bills -- in most cases, more so than last year.

"Without questions, it's a result of the economy," said Savas Danos, general manager of the Littleton Electric Light and Water Department. "We work diligently with customers who are having trouble, but it's more of a struggle now that we get these cases of people losing their jobs."

As arrears continue to pile up, some electric companies have been left with no choice but to cut off power.

National Grid saw its electricity shutoff rate in Massachusetts jump by 8.6 percent in one year, from 39,317 shutoffs in 2007 to 42,697 in 2008.

"That certainly is a pretty substantial jump," said Tim Shevlin, the executive director of the Massachusetts Department of Public Utilities. "But I'm not surprised by it. I believe it is the economy and cutbacks in fuel assistance that are at play."

The National Grid shutoffs were amassed from April to November, as the state annually implements a moratorium during the winter that prevents gas and electric companies from shutting off residents who can't afford heating.

During that time period, National Grid also restored power back to 75 percent or 32,046 of the disconnected homes. The company does so as soon as payments start being made on overdue bills, spokesman David Graves said.

Those unpaid electricity bills amounted to $159 million this November -- more than double the $61 million in unpaid bills the company had a year ago.

But at the same time, Graves noted, National Grid had fewer accounts that were 60 to 90 days past due. In November, there were 55,832 electric accounts in that category, while there had been 58,096 in November 2007.

"Some of the numbers are peculiar, but overall they are unfortunately growing," Graves said. "We do know that some customers have a problem and we encourage them to call us about their options. But it's hard to say what exactly is going on out there. We don't ask them why they stop paying."

George Gantz, senior vice president of Unitil Corp., said it is something he has witnessed before during economic slowdowns.

"Given what we've heard and seen about the economy, I don't know that this is a big surprise or alarming in any sense," Gantz said. "There have been a lot of stresses on our customers. I think where gasoline prices were in the course of this summer and fall was a key factor. Hopefully, with the overall drop of energy prices, some of that pressure will ease a bit."

Unitil, which serves Townsend and other Central Massachusetts towns, has had a different experience than National Grid when it comes to arrears.

The New Hampshire-based company saw the total amount owed by its late customers increase by 6 percent from 2007 to 2008, but at the same time its shutoff rate dropped by about 40 percent.

"That decrease is mainly because of an arrears management program that was adopted statewide," Gantz said. "That program has been helpful in stopping our customers from getting to the point were they just give up. That's been an important tool for us."

The Massachusetts Department of Public Utilities had issued an order to electric and gas companies in September that took steps to expand consumer participation in such management programs. The order also mandated that the companies increase discounts for low-income customers.

The order was in response to what the state said were "significant" price hikes for electricity and natural gas. National Grid customers alone have seen their electricity cost go from 10.9 cents cents per kilowatt-hour to 12.7 cents over the last year.

The price hikes and slowing economy have not affected all customers equally. Tammi Lemire, an executive assistant at the Groton Electric Light Department, said her utility company has seen no significant increase in overdue bills or shutoffs.

However, the company has been bombarded with questions about energy conservation and request for energy audits.

"Everybody wants to know how to conserve, even if they are among the richest people in town," Lemire said. "I would say that's driven by the economy. It brings down their cost and our cost."

Lemire believes that Groton has been shielded from the electric malaise mainly because of its affluence, the availability of an early-payment discount for electric customers and her company's diligence in avoiding shutoffs.

"Municipal light departments are different from large electric companies," she noted. "We're smaller and we're more personalized."

Danos, of the Littleton Electric Light and Water Departments, agrees.

"The people in this office have fewer customers per capita, so they can offer higher TLC," he said. "No customer is just a name and number for us. It's very difficult in our service area to have your service shut off, unless you just don't call us."

However, Danos has seen a 10 to 12 percent spike in overdue bills for his utility, which serves about 8,200 customers in Littleton and Boxboro. He believes a large part of that is driven by the nationwide phenomenon of rampant foreclosures.

Yet Danos remains optimistic that his customers will be less affected by the economic downturn than other Greater Lowell residents.

"We have a lot of companies coming here and there are some pretty good core companies here already," he said. "That will hopefully help this area weather the downturn in the economy better than others. Only time will tell."