Perfect Example of How Underwater the Debt Ridden Consumer Is.

Discussion in 'Wall St. News' started by Comanche, Jun 19, 2007.

  1. You can replicate this to 49 other states.

    Story from Platts Gas Daily

    Gas service cut to thousands of Minnesota homes

    A weakening Minnesota economy has caused a surge in the number of CenterPoint Energy's residential gas customers who can't pay their utility bills and prompted an unprecedented number of service shut-offs, CenterPoint officials said last week.

    "The reality is that utilities fall behind other priorities," company spokesman Rolf Lund said, noting that more residents are struggling to make rising home mortgage payments and buy expensive gasoline.

    Records on file with the Minnesota Public Service Commission show that at the end of March, 25% of CenterPoint's customers, or 184,000, were behind in their payments. Of those, about 19,000 have been sent disconnection notices — 20% higher than a year ago.

    Lund said the typical residential customer who received such a notice owes the company $1,500.

    According to Lund, low- and middle-income customers in CenterPoint's Minnesota service territory are facing a double-whammy: record-high gasoline and lofty gas and electric bills. The Energy Information Administration said the price of Midwest regular gasoline has increased 21% since May 2006 to $3.313/gallon, while retail natural gas prices in the region, while down more than 30% from a year earlier, are still hovering at a historically high $8.80/Mcf.

    Meanwhile, it has become more difficult for low-income customers to obtain federal financial assistance to pay their utility bills. Figures from the US Department of Health and Human Services show that the Low Income Home Energy Assistance Program funds allocated to Minnesota decreased from $110.848 million in fiscal year 2006 to $77.469 million in FY 2007.

    Statistics on the number of Minnesota residents applying for aid this year were not available, but the National Energy Assistance Directors Association reported earlier this year that the state expected to serve 30,000 fewer households than last year.

    Patrick Boland, supervisor of CenterPoint's personal accounts department, pointed out that the data filed with the PSC on customer arrearages was affected in part by changes in the company's record-keeping practices. Following the installation of a new billing system three years ago, CenterPoint was less assertive in taking action against people who had fallen behind in their payments, he explained.

    Shut-off moratorium period extended a month

    Boland also noted that the PSC amended its cold-weather rule, which prohibits utility shut-offs during the winter heating season, by extending the end date from April 15 to May 15. That change contributed to the increase in the number of people with past-due accounts, he said.

    Another large Minnesota gas utility, Xcel Energy, is not releasing its data regarding customer arrearages because it is against company policy, spokeswoman Patti Nystuen said. She did note that there has been a 20% increase in the number of disconnections among its 321,000 customers in the state.

    The state's other large gas utility, Minnesota Energy Resources, said that as of April, 4,374 of its 187,000 customers had been issued disconnection notices. Since March, the company has been urging customers with past-due bills to make arrangements quickly to true-up their accounts.

    Burl Haar, the PSC's executive secretary, said regulators are aware of the increases in arrearages and shut-offs but are not now planning to open a docket to investigate the matter.

    Meanwhile, representatives of the American Gas Association said the number of people who nationally have fallen behind in paying their gas bills is believed to have increased, although no recent statistics have been compiled.

    They noted that utilities are reluctant to shut off service to customers because of the cost involved in reconnecting them. Utilities would much prefer to work out a payment plan, AGA spokeswoman Tracey Lynn Shifflett said.
  2. gnome


    Can't everybody just pay with plastic, then default on the credit card company? That's the Amerikan way, isn't it.?
  3. Thats what happens when you live through a hyperinflation like now.
  4. gnome


    Unfortunately, we ain't seen nothin' yet... :(
  5. S2007S


    Doesnt matter how Debt ridden the consumer is they will still spend, spend, spend. It amazes me how far they can go until they just cant spend anymore, 2/3 of the GDP depends on the consumer. The savings rate in the US is NEGATIVE, how long this can go on for is anyones guess. You look at the markets and it seems that this economy is doing just fine, you then read an article like this and it makes you think twice where this economy is heading.
  6. Absolutely nothing to worry about, here. The US is ticking over fine...people have never had it so good.
  7. I hope your wrong.

    When your petrol provider calls to thank you for being a good customer and paying on time you know there are problems out there.
  8. Bob111


    if they can't pay for gas in middle of summer, how they going to survive upcoming winter in Minnesota?
  9. Agreed inflation is going to kill the little guy. And the wealthy guy gets richer.

    Isn't this how things work in the third world? Perhaps we get what we deserve for consuming all of those cheap textiles, electronics, and food all harvested/produced by those who we pay nothing.

    The Walmart consumer culture is having karma bite the little guy in the ass.
  10. gnome


    I don't think that's quite correct. True, the little guy gets killed... but most of the sort-of-rich and middle class get buried too.
    #10     Jun 19, 2007