Democrats unveil $30bn bill to cancel water debts and bail out utility firms

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Contributed date

May 31, 2021 - 12:35pm

Critical Commentary

Jeff Merkley, a Democratic senator from Oregon, proposed a 30 billion dollar low-interest loans program for electric, water and sewage and broadband providers as part of the Maintaining Access to Essential Services During the Covid Emergency Act of 2021.The loans would allow utilities to recoup money in order to stay afloat without resorting to fines and shutoffs. Utilities have long justified using disconnections as a way to force people to keep up with bills.

In Merkley’s bill, the loans would be conditional on utilities canceling debts for low-income households. Two years after the end the pandemic, public and small utilities could see the loans forgiven for the amount of outstanding arrears, as long as they had not reverted to using punitive measures. Utilities that disconnect or fine customers would be obliged to immediately repay the loan in full.

Even before the pandemic, the cost of water and sewage was a growing problem. A landmark investigation by the Guardian last year found millions of Americans were at risk of being disconnected or losing their homes due to increasingly unaffordable water bills. People of color have been disproportionately affected by rising bills and punitive measures. Affordability is just one part of America’s Water Crisis. Federal investment in water systems peaked in 1977, since when local utilities have been mostly forced to raise money through higher bills and commercial loans to pay for infrastructure upgrades and environmental cleanups. Last month, the Senate passed the Drinking Water and Wastewater Infrastructure Act 2021 which would invest $35bn over five years to improve access to clean, affordable drinking water and sanitation.Both bills have been welcomed by advocates and trade groups as important first steps: an estimated $35bn a year over the next 20 years is needed to ensure universal access to water and sanitation.

This proposed program signals a shift in the federal government's willingness to intervene in utility operations, and specifically shows a renewed (if not totally new) interest in prioritizing constant and reliable access to energy for all utility customers, even if those customers are experiencing financial hardships. Although the administration change undoubtedly was a catalyst for this shift in federal priorities, COVID-19 proved the essentiality of energy access and how severely disrupted one's life can be without access to necessities such as water, electricity, and internet. This program, along with the 35 billion dollar federal investment in water and sanitation infrastructure maintenance, indicates that federal government may be acknowledging that utility affordability and consistent access to quality energy go hand in hand, as utility rate are often increased to pay for infrastructure maintenance. A question that I have regarding this program is does the loan forgiveness element only apply to public and small utility companies or all utility companies? I think it'll be interesting, if this program does get put into law, to see which utilities choose to receive the loan from this program and what justifications they have for not receiving a loan, such as the loan not being large enough to cover their deficit.

Cite as

Nina Lakhani, "Democrats unveil $30bn bill to cancel water debts and bail out utility firms", contributed by Morgan Sarao, The Energy Rights Project, Platform for Experimental Collaborative Ethnography, last modified 31 May 2021, accessed 10 December 2023.