As our companion post today shows, many eyes are on the increasingly desperate energy situation in Europe, as electricity prices keep marching higher with no relief in sight. And this is August, when energy demands will be more severe come the fall and winter. Yet despite Ukraine having no realistic chance of beating Russia and European societies paying enormous and rising costs, EU leaders are too arrogant and insulated to save the lives of their own and Ukraine citizens by trying to negotiate with Russia.1
With the Biden administration insistent on presenting the US economy as strong despite accelerating inflation and deteriorating fundamentals, many in wealthy Democratic party enclaves no doubt think things are still hunky dory, absent some decay in their securities portfolios and maybe their real estate value.2
The new Bloomberg story, A ‘Tsunami of Shutoffs’: 20 Million US Homes Are Behind on Energy Bills, paints a starkly different picture. Lower income and otherwise precarious households are already showing signs of severe stress due to big jumps in the costs in “must have” categories, namely food, energy, shelter. Winter in the US may not be as widespread a disaster as in the UK and Europe, but plenty of people will be having to decide how to get by with not enough food and heat.
From Bloomberg:
The Nice household is one of some 20 million across the country—about 1 in 6 American homes—that have fallen behind on their utility bills. It is, according to the National Energy Assistance Directors Association (Neada), the worst crisis the group has ever documented. Underpinning those numbers is a blistering surge in electricity prices, propelled by the soaring cost of natural gas.
The power bill crisis is even more acute in Europe, where the spike in natural gas prices has been far greater in the wake of Russia’s invasion of Ukraine. Policymakers there have sprung into action, throwing billions of euros in aid at struggling families to help them pay bills. There’s been no meaningful talk of doing anything on a similar scale in the US, where the hand-wringing has been dedicated, as always, to the gyrations of gasoline prices at the pump.
Utility shutoffs can have deadly consequences, though, a risk that’s becoming more palpable as summer heat shatters records. Already gut-punched by soaring prices for just about everything, more and more people are facing a choice among food, housing, and keeping the power on. “I expect a tsunami of shutoffs,” says Jean Su, a senior attorney at the Center for Biological Diversity, which tracks utility disconnections across the US.
Notice the mention of the EU providing energy relief. That’s not the sort of thing the US or US states customarily provide, but the specter of Dickensian level distress plus homes at risk of pipe bursts might jolt officials out of their usual stupor. Or will they instead go the punitive route of providing what amounts to heat shelters, warm places to go to at night….and catch Covid too?
More from Bloomberg:
California’s PG&E Corp. has seen a more than 40% jump since February 2020 in the number of residential customers behind on payments. For New Jersey’s Public Service Enterprise Group, the total is up more than 30% for customers at least 90 days late—and that’s just since March.
The average price consumers pay for electricity surged 15% in July from a year earlier, the biggest 12-month increase since 2006. Regulation of electricity rates makes it hard for providers to immediately pass on higher fuel costs, so the recent hikes may be just the start….
In the earlier days of the pandemic, some states and utilities halted power disconnections, shielding customers like Nice who’d fallen on hard times. But those measures wound down just as inflation gathered steam….
For investor-owned US utilities, the financial repercussions of accumulating debt from unpaid customer bills are typically limited. That’s because state regulators often allow utilities to recover their losses by adding a charge for customers who are paying their bills, or taxpayers help pick up the tab.
In Nice’s case, her power was out for only three days; the nonprofit Citizens Utility Board of Minnesota helped her negotiate a payment plan with Xcel. Her experience is common: Utilities shut off customers only as a last resort, according to Xcel. About 80% of US utility customers who experience a shutoff will have service restored in a few days, Wolfe says. The remaining 20%, though, may be close to eviction or on the verge of homelessness.
While this situation is ugly and set to get much worse, some officials are trying to get ahead of it. The Federal government’s Low Income Home Energy Assistance Program, or Liheap, has $4 billion allocated for 2023, clearly too small in light of this energy emergency. A bipartisan group of Senators and Representatives are seeking more funding.
The article finally points out that Federal and state energy payment assistance is usually conceived as helping families get through the winter. But with deadly summer heatwaves, energy relief may need to become a year-round affair.
____
1 At this point, many commentators think Russia will not negotiate, at least on the war front. The West’s repeated bad faith behavior and the ugly and widespread show of Russia hatred means Russia does not trust the West to live up to any deal. But Russia and the West are still intertwined economically, so Russia might be more willing to talk turkey on the trade and energy front.
2 Homes in districts with top schools are the last to decline in housing bear markets.
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An excellent, if alarming, post. It is important to keep pointing up the failure of the elites here–in not even providing the basics for the citizenry. Talk about a crisis of legitimacy.
I don’t want the wisdom of the first footnote to get buried:
“At this point, many commentators think Russia will not negotiate, at least on the war front. The West’s repeated bad faith behavior and the ugly and widespread show of Russia hatred means Russia does not trust the West to live up to any deal. But Russia and the West are still intertwined economically, so Russia might be more willing to talk turkey on the trade and energy front.”
Exactly. If we in the West[tm] had diplomats instead of marketing managers in charge of foreign policy, it would become clear that the death of civilians is a stunningly important matter and that negotiations should begin, formal negotiations that continue and that aren’t undermined by Ukraine’s recent fantasies of reincorporating Crimea and Vicki “Cookies for Mass Murder” Nuland’s fantasies of breaking up Russia. Then we lock them in a hotel till they come up with something.
It isn’t as if this kind of conference hasn’t been done before. Congress of Vienna, anyone? Memories of Potsdam?
I am skeptical about Russian ambitions as counting on separatist forces to go on an offensive is a bit daft. Moscow woukd have to change their process. With the meat grinder winding down, eventually Kiev will run out of forces which they are intent on feeding, but leaving a state of war is problematic. The recent bombing is likely an attempt to wake Kiev up. We know Russia can and will hit targets in the West of Ukraine with high profile Western elites across the border. Ending the war with Ukraine keeping Odessa and it’s infrastructure and the remnants of its army in exchange for the republics and a land bridge makes too much sense.
Winning countries in those cases were fought out, and I suspect the British noticed the size and growth of the US and colonial opportunities. Europe and the US just needed not be a foe. Burning the evacuated Washington was retaliation for war crimes, but the British were trying to reduce tensions by not retaliating in kind.
Denis Pushilin, head of the DPR, has said the Donetsk militias will continue to prosecute the war outside Donbass. He basically said the Nazis have to be routed. And since Donetsk is being shelled from territory outside Donbass, Donbass will not be safe until the SMO objectives are achieved.
Plus Donbass will vote on joining Russia once Donetsk is cleared, I would guess a month later so they can properly organize polls. So if that’s mid-Sept, say referenda mid-Oct.
A few weeks ago the topic of high fuel costs came up in a discussion with a gentleman who is the Fire Chief of the local volunteer FD/ Emergency services in a small town here. You can just see the writing on the wall coming up this winter with increased calls due to more freeze ups or fires as thermostats are turned down to save energy, and with people flat out running out of propane or fuel oil (Home heating oil $ 4.34 cash price when looking around the other day, how the hell are the poor supposed to afford that?) .Then there being the increased chances of fires from people using electric heaters or even their electric cookstoves to supplement or substitute for fuel oil. Placing an increased load/overloading on old wiring and circuit panels found in so much of the old housing stock up here in the Green Mountain and Granite States And you can’t blame them them, starting in November around here the power companies cannot turn off the electricity because of nonpayment so it’s survival mode for so many. It’s a pretty disheartening picture. The United States of YOYO ( Your on Your Own)
Pretty amazing that one can feel so grateful for just having a solid roof over their head at the place one lays his head at night, food on the plate, good health.Of course I’m reminded of this daily as my better half works every day with folks facing housing crisis. Horrible now, a complete disaster coming over the horizon in about 10 weeks
‘EU leaders are too arrogant and insulated to save the lives of their own and Ukraine citizens by trying to negotiate with Russia.’
Yeah, speaking of which-
https://twitter.com/disclosetv/status/1562485186193145861
Thank you, Rev.
Johnson said similar in Kiev yesterday. He was there to collect a gong from Zelensky and celebrate independence day*.
*The Guards played Ukrainian music at Horse Guards, Westminster, yesterday.
It was odd to hear the BBC report how the UK has given more support to Ukraine than any other European country. It made me wonder if us poor, bloody infantry in Blighty could have some of that largesse.
Some of the families who host Ukrainian refos are complaining that they did not appreciate the scale and cost of the commitment and anticipate the cost of living crisis, so they want the government subsidy doubled.
One elderly couple nearby, mid-Buckinghamshire, own a large period cottage and out buildings, a few acres and a swimming pool. Their children are grown up, so the spare capacity is used for AirBnB. They took in a Ukrainian family. They are screaming for more money.
“Johnson said similar in Kiev yesterday. He was there to collect a gong from Zelensky”
So there’s a TV revival in here that would be a stoner’s delight. BoJo as the host of the new “Gong Show,” and put a bag over Zelensky’s head, and he can be the Unknown Comic.
BoJo’s hairdoo rivals Chuck Barris’.
Thank you, Colonel. It seems that another purpose of his trip was to also sink any possibility of a negotiated peace between the Ukraine and Russia. He urged the Ukrainian leader not to ‘advance some flimsy plan for negotiation’ with Russia and said ‘The United Kingdom is with you and will be with you for the days and months ahead, and you can and will win.’
https://www.rt.com/russia/561478-boris-johnson-visit-kiev-ukraine/
I think that it was on the Military Summary channel that I heard that the Ukrainian military have now lost as in killed alone more people that the actual total strength of the British Army. That is a remarkable fact that.
Am I the only one who thinks having the notorious serial liar that is Bojo showing up in Kiev to give assurances of (perfidious) Albion’s undying support is, erm, less than assuring?
Their Ukrainian guests could turn those few acres into a few acres of dacha gardens. That way, this elderly couple could have so much food that they wouldn’t need more money. One of the outbuilding could be remade into a chicken coop so the elderly couple can have eggs and occasional chicken. Another of the outbuildings could be remade into a goatshed so they elderly couple can have goat milk and goat butter and occasional goat meat.
Unfortunately, from what I’ve been reading, most of the “refugees” ending up in foreign countries to the west of the Ukraine are from the middle class, so, no actual farmers. that lot will expect their ‘hosts’ to do all the grubby work while the ‘refugees’ suffer the pangs and torments of being displaced by the Russian Hordes.
“A gentleman does not get his hands dirty.” “The Admirable Crichton” is just a flimsy entertainment. Etc.
Thuto, in a linked post from The Automatic Earth, cites a quote from Jordan Peterson. I watched the Lex Fridman podcast with Peterson the other night, where Peterson refers to a Deloitte report on the future out to 2100 (I haven’t found the report.) According to Peterson Deloitte writes that we’re going to see a great drop in living standards, with famine die-offs, misery, but after that things look rosy. Apparently this period of misery is willed, policy. Hope my memory hasn’t failed me here.
I can’t find that Deloitte report either but it checks with predictions from peer companies like Accenture pre-pandemic.
I would have to imagine that the supply issues, plus the additional health costs, plus energy disruptions, will accelerate the trends they were looking at in 2014. In which case this is another example of what multiple posts on NC have been discussing for years, that the trends we are all lamenting and that our leaders are trying to pin on Putin/Pandemic/Trump were with us years before and have only become worse.
“According to Peterson Deloitte writes that we’re going to see a great drop in living standards, with famine die-offs, misery, but after that things look rosy….”
One reason people make that assumptions is because of living standards in Europe after the Plague.
But no reason to think that NOW a big die-off is going to lead to a “rosy future” for the survivors.
There would be survivors. But no guarantee about what we would think of their “standard of living.”
It’s about how well people can adapt to change. Not so much about how many people there are.
Major changes in the ideology of leadership is what is needed for a “rosy future.”
I put this right up there with other forms of “magical thinking.”
Found it:
Around 30 minutes in. Downloaded and searched subtitles, no time stamp on them unfortunately.
https://www.youtube.com/watch?v=sY8aFSY2zv4
“estimates of starvation this coming year
150 million people will suffer food
insecurity
food insecurity
yeah food insecurity that’s the bloody
buzzword
famine”
Living life in a cold dwelling is a brutalizing experience– it physically breaks you down and wears you out; it is painful and tiring. And it doesn’t need to be this way: no one in the West should be cold and hungry, but here we are.
Fear of what could happen helps to keep the peasants managable.
This article, albeit relating to the UK (our 51st state), should stick with the theme of Yves’ post, and yes, as a possible solution to this particular bane in the USA too:
Nationalizing UK Energy Companies
August 22, 2022
Many people will say this can’t be done, but of course it has been done before, writes Andrew Fisher, a former Labour policy chief.
https://consortiumnews.com/2022/08/22/nationalizing-uk-energy-companies/
It is a good example of how far from it’s origins todays Labour Party has shifted that this option has not been trotted out by the Shadow Cabinet.
Bring on the tankies!
From personal experience, I can definitely say that being cold or hungry or both can certainly mess up a person. From my gas powered heating bills in the past year, I can say that Pacific Gas & Electric is making bank especially with the gas. Funny how when my health is good I don’t need the heat, but when I am sick or just in poor health, I really, really do. That is the problem, isn’t? If you are in good health, a few days of little food or a week of being cold is not a problem, really. But what if you do get sick? And the longer you are cold or hungry then the more likely that you will get ill.
I live in the San Francisco Bay Area with its fairly mild climate, live in a decent place, and can afford my utilities and food. So, for now, I am fine, but about those who live inland where the temperatures are more extreme? And it is the poor who are forced to live where the housing is “cheaper” and who often have a hard time affording food?
In October, when the temperature can reach down into the 30s or whatever the drought breaks and we get three solid months of rain in winter and the food banks are already a joke, and PG&E starts asking for another increase because somehow they never make enough profit.
I do not think that it is anywhere as bad as it is in the UK or will get anywhere as bad as it could get in the rest of Europe, but I really do wonder how bad it will get in the next six months here. Nice world.
When I lived in the Bay Area back in the day, I always wrote my checks to Pacific Graft and Extortion. The label seems more appropriate today, and the state blew it by letting PG&E continue to rip off their customers instead of taking it over for the benefit of the population. Chickens now coming home to roost?
In Massachusetts, the super-majority just passed their always-late-end-of-year-budget. In it, includes a new tax for natural gas users (me). So not only will those of us with no other options pay even more, but they passed their own mini version Green New Deal where no gas powered cars will be allowed by 2035.
My personal close friend is #3 at NGrid here, a power engineer, who is pro-alternative energy (more so nuclear) and is incensed. The infrastructure here is so bad he said, that two generations will be dead before it’s even half of it is built if we started today. No you say? Take a look at our MBTA. He said that at upper-level meetings over the years, legislators, including both AG Healey and former AG Coakley appear to not even listen what they say.
Will not be retiring here. They don’t care. They dodged a bullet with the 2020 Census, but they’re right back on track to losing yet another congressional seat due to flight. MA can enjoy the well-off academic driveway wine drinking liberals and Big Hospitals and the completely disparate lower-classes they created here, and all the problems that come with it that are plaguing the other states.
No gas powered cars will be allowed to exist at all? Or no new gas powered cars will be allowed to be sold?
I just recently saw an article saying that after 2035, no gas powered ICengine cars would be permitted to be sold. But the ones already there would still be permitted to exist in use.
I can see millions of Californians going to other states to buy their ICengine cars to bring back to California. Especially if some low-price-end carmakers make ICengine cars with the least feasible digital lampreys and leaches and cooties spread throughout the cars. And most especially if the dashboard controls are the good old manual type not forcing distracted driving to understand a touch screen.
In NYS we get the chance to periodically choose our gas and electric supplier. You get the option of choosing either a fixed or variable rate. I always choose a fixed rate because I know what I will be paying for this amount of time. I have never been burned because the variable rate has always gone up to equal or be more than the fixed rate.
do not choose a third party supplier unless one absolutely knows what one is doing, the terms of the contract (reference price index) and local market conditions.
almost always stick with your local regulated utility
those 3rd party suppliers’ contracts are almost always tilted way in favor of the supplier.
the only third part supplier option worth it are the real-time pricing that is offered by the local utility—and only then in certain discrete circumstancez.
Endorsed. My children were often taken aback at the ruthlessness with which I would send packing these grifters from my door were they so foolish to come around — especially the one time that my wife innocently let one across the threshold thinking that he was actually a representative of the local utility …
It’s the best of times, it’s the worst of times. This may not go well at all if we get surprises yet again at the gas pump or paying for a tank of propane. Let’s see if it’s a toss up on the heating and energy bills, the drug care bills, the best healthcare evah bills.
I may finally break down and visit a local Costco and buy a few key staples in bulk. Buying in bulk for a single individual just seems a stretch!
got the August natgas bill, 1 therm > $1.20, 4x pre-covid price in my neck of the woods
Majority of people who depend on heating have no idea what will hit them this winter.
it will be a train wreck.
That “train wreck” will be like good old train engineer Cookie Monster hitting the avalanche with the train full of cookies and milk. As Sesame Street showed, the Establishment attitude will be “Let them eat snow.”
See: https://www.youtube.com/watch?v=xLHXwC7lkas
The Jim Henson Sesame Street muppets were so subversive. After his death, the credentialed “educators” got the upper hand on that show and it has never been as good as it was then.
Yeah, my electric bill is $45 higher this month compared to last year because…? Fortunately that bill is small for us overall. Now my grocery bill with several hungry teenagers to feed? That is enormously different from last year. I’d be happy if it was only $45 more expensive to feed my brood. But energy costs are food costs so even if my electric bill didn’t increase much im still paying for everyone else’s increasing energy costs.
Just looked ours up. 83 cents per therm for baseline, and $1.23 per therm over baseline.
The utility commission in Pennsylvania recently approved a 45% increase in the cost of electricity.
Forty five percent in a single year? Good grief.
The US will probably avoid widespread utility shutoffs because the federal government will implement a “No shutoff” rule and try to sort out the “Who pays for this?” later.
This works for electric and gas systems that are regulated utilities. The big disaster will be in rural areas with propane, which is an unregulated market. Numerous sellers buy wholesale and deliver by truck to single family homes and businesses for cash. If the government orders the sellers to buy propane and deliver to desperate people who can’t pay they will simply say “Sorry, I can’t do it.” And I can think of no mechanism other than a federal pay guarantee than can make them do it. And that will require some form of price controls and rationing.
The propane market is already under stress; look at the weird stock price and profits profile of Suburban Propane (SPH) over the past few years for an example. A second fail point is when marginal real estate owners stop providing services because no one will extend credit. This is the “NYC in the 1970s” problem.
The most likely outcome is a “Heat the high school gym and set up cots” system, which will work in the more cohesive rural areas but will be divisive if poor people in, for example, MA start showing up in the rich towns out on the Boston beltway. The next step will be national guard armories.
Ever since Russia decided about two months ago to call off the “Shell them and advance a mile” offensive in Donetsk and reverted to the traditional Russian attrition strategy (discussed in the recent Journal of Military History article), I’ve assumed that the goal was to impose unacceptable costs on European NATO and the Ukraine this winter via the natural gas weapon. All indications are that this strategy is being followed and the Europeans are trying to deal with it. How will the NATO public view the war after a cold, expensive winter… with many of their ruling class vacationing in the Caribbean and Thailand?
In the autumn of 1941 German officers on the Eastern Front were ordering copies of a book by the Armand de Caulaincourt about Napoleon in Russia (see the Wikipedia entry and read some passages from the free on-line version). I’d read a fair amount as a kid about the Battle of the Bulge and the first winter of the Korean War. So when I was faced on graduation with Vietnam in 1966 my first though was relief; at least I wouldn’t have to face winter in a Korean foxhole.
Enjoy the beauty and relative summer quiet in the Ukraine; it probably will not last.
The Journal of Military History article is way way way offbase. Go look at Military Summary. It shows daily advances, these days normally on at least three of the four main fronts: opposite Donetsk city, near Bahmut, Kherson, and Kharkiv. Russians forces captured over 300 square KM in Kherson district alone in the last week. They have advanced to well within shelling distance of Nikolayev, but appear to have paused to get their logistical tail in place before they advance to take or encircle Nikolayev, the last big stop on the way to Odessa.
The reason Russia was shelling and advancing slowly is not doctrinal. It’s because the entire Donbass was very heavily bunkered, and this methodical approach minimizes Russian side deaths while maximizing Ukraine costs.
See also:
https://www.moonofalabama.org/2022/08/ukraine-wrong-assumptions-wrong-conclusions-and-a-lot-of-dead-soldiers.html
Similarly, in his latest show, in the opening minutes, Alexander Mercouris debunks the “latest Western media meme” of Russian fighting being stalled.
https://www.youtube.com/watch?v=n8_1bvwW3Uk
I’ll just add to YS comment that Russia is a completely different opponent that the West has faced since WWI&II&Korea&Veit&the so called terrorist nations needing cleansing. Cultural and at the same time logistically, nothing like the wars of the last 100+ years. Its positioned its self post Gorbi and the Putin administration to attempt inclusion on equal terms with West, but those have denied at every turn.
So here we are again where some fractured nation is on sale to the highest bidder after having it economy rooted and a political administration that seem more like a party for sale to the highest bidder in the global economy[tm].
The rub is this is on the Russian boarder and it can move and rotate its gear in a short time line e.g. there is no haste and they can put all the dramas on the opposite team in the here and now and long term and not just on the battlefield.
Ugh …. if I had to chose between the two in a fight as ex operator and wanted to achieve something whilst displaying my skill set it would be Russia, all politics aside. Ruthless grinding methodology with out going Fallujah just to gain territory and call it a win.
Gezz Russia is in this for the long haul and not some market driven outcome for investors …
A piece in the pink paper yesterday discussed an LNG terminal in Texas having to push back its schedule for coming on-line full time. It’s purpose of course, is to export LNG to Europe. According to the article, this news prompted a price decline in the domestic natural gas market. Like we used to say in New Mexico…water flows uphill to money.
I thought this thread would be filled with comments saying – my electric bill last month was the highest ever. 18 years in this house and it’s true for me. I’m wondering how a country full of people thinking they live in a democracy can allow gas to be exported without knowing we are going to be okay? And if utility companies are among those taking windfall profits, why are we letting them?
We weren’t asked about assisting Ukraine. We weren’t asked about making sacrifices due to sanctions. We weren’t given a time for any of this. Why would we the people be consulted when the government wants to export our resources to bribe their allies?
Electric rate in Hawaii (Oahu) is $0.42/kwh. Scheduled to increase on the 1st Sep as our coal generating plant closes due to renewable mandates. Fortunately can get by without heat, but push towards higher density residential housing has also increased use of AC.
I would really like some more context for that “1 in 6 American homes—that have fallen behind on their utility bills” quote. How many are usually behind just because they forget? What about in 2009? I’m trying to chase that statement down and everyone is just citing other media sources that repeated that statement or a generic link to NAEDA’s homepage.
As to the overdue utility charges graph, it would be nice to see other recessionary periods (and adjust for inflation). That is a large jump over 6 months, but speaks nothing to other troublesome times for consumers — which is the claim being made here
The Bloomberg story makes clear it a record, the worst ever, so worse than 2009.
I disagree. The only place worst ever is alluded to is in this statement “It is, according to the National Energy Assistance Directors Association (Neada), the worst crisis the group has ever documented” – but as I said, I cant track down that statement.
If we’re going to put weight on that claim I should be able to see how that metric is calculated and lookup the historical estimates. How far back do they even go? Do they go back to the depression?
I started digging just because I wanted context. Is it a little or a lot worse then ever? When was the worst ever? Is the data going back past the mid 20th century reliable (if it even exists) The answers to these questions have differing implications even if we take it as a fact “it’s the worst ever
Stealth-creating situation where numbers of people can be left to freeze to death in winter because they “couldn’t afford the bill” is one more tool in the Jackpot Design Engineer’s toolbox.
In America, they will still try to be stealthy about it and make it look like a series of unfortunate personal accidents and bad luck. Apparently in Britain the current upper class ( the spiritual and sometimes physical heirs and descendants of William the Conqueror’s friends and comrades who conquered Saxon Britain and divided it all up among themselves) have decided to make the mass democide by induced freezing-to-death open and obvious. They don’t even feel the need to make it look like an accident anymore.