In Debt and Darkness - Poor Families in Raleigh Paying Extreme Electricity Cost

Image source: NewsObserver.com

A recent report in the News Observer delivered some disturbing news. They reported that “The poorest citizens in the poorest communities often pay the highest rates for electricity.” The news outlet further suggests that the poorest of our people are subsidizing wealthier consumers’ utilities and that this practice is handicapping economic development in the regions that need it most. How is it possible that those in most need would be asked to pay the highest electricity cost?

Last year, the NAACP organized the Truth and Hope Tour of Poverty that took media and other organizations to the six poorest areas of North Carolina one of the most resounding concerns for citizens in these at-risk areas was “unreasonably high electric bills.” Most residents in these areas are hit with electric bills of over $300 per month and some as high as $1,300. These are also areas riddled with bankruptcy and foreclosure and it seems only logical that this is a contributing factor in already poor households losing their financial footing.

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Consider the case of one single mother living in a $175 per month rent subsidized one bedroom apartment whose electric bill is a staggering $330 per month on average. With a fixed income of just $600 per month, this electric bill could have her on the road to insolvency, bankruptcy or just sitting in the dark very quickly. For many people in debt in our state, electric bills are a main source of anxiety.

In fact, the NAACP study found that these onerous electric bills were often more than residents’ mortgage or rent payments and frequently led to “stunning hardship, power shut-offs, home abandonments, failed businesses and foreclosures.”

The poor in these areas often pay in excess of 40% more in electric cost than more prosperous areas of the state. So who’s responsible for these outrageous bills that are, quite literally, bankrupting our neighbors? The answer: N.C. Eastern Municipal Power Agency (NCEMPA) is the energy provider for all of the areas where the bills are drastically out of line with the rest of the state. Considering all the things you use electricity for, it's not a luxury - it's a necessity few can live without.

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A legislative study prepared last year found that the reason NCEMPA customers are paying so much more for their electricity is that NCEMPA is $2.3 billion in debt! This debt is then passed down to each customer. This is debt originating from the 1970s when NCEMPA bought electric generation facilities. The Legislative Research Committee said “Thirty-eight percent (38%) of the wholesale rate for electricity paid by members of NCEMPA is used to pay this debt.”

This means that in order for NCEMPA to stay profitable, they are forcing their customers to service their debt. But when their customers are already deep enough in their own debt and living in impoverished areas, how is this reasonable? The legislative study produced no recommendations that would lower the electric cost for these residents. This means that, for now at least, decreased household budgets, foreclosures and bankruptcy will continue to plague this area in 2013 and beyond. NCEMPA is slated to continue with this debt load until at least 2026!

If you are one of the residents in this hard hit area that is struggling with debt, a Chapter 7 or Chapter 13 bankruptcy may help your financial situation. Contact a reputable North Carolina bankruptcy attorney for more information.

Dedicated to helping residents of North Carolina find the best solutions to their debt problems. Don’t waste another day worrying about your debt. Call +1-833-627-0115 today to schedule a free initial consultation to discuss your bankruptcy options.