About 185,000 Iowans end a turbulent 2020 owing $36 million in overdue gas, electric bills

Donnelle Eller
Des Moines Register

Like thousands of Iowans, Matt Brummett lost a job he loved during the COVID-19 pandemic and has teetered for weeks on the edge of losing his home and being cut off from utilities.

Last year ended with nearly 185,000 Iowans, many struggling with lost jobs and reduced hours from the coronavirus crisis, owing $36 million in past-due gas and electric bills, 25% more than in 2019, state records show.

A national housing report shows that as many as 106,000 Iowans also owe a combined total of about $114 million on their rent. Despite an Iowa unemployment rate that’s fallen recently to near pre-COVID-19 levels, expert say the struggle to cover the cost of basic necessities shows many low-income Iowans haven’t yet escaped the pandemic-driven recession.

By spring, the amount Iowans owe will likely grow, given high energy consumption during the current extreme cold wave gripping the state.

“Our families truly live paycheck to paycheck, and anything that disrupts that can be fairly catastrophic,” said Anne Bacon, executive director at IMPACT Community Action Partnership, which provides assistance in Polk, Boone, Jasper, Warren and Marion counties.

Help could be coming: Iowa families that have lost income because of the coronavirus pandemic should be in line for $195 million in federal aid to help pay rent and utility costs. The state has received the money, but a federal review has stopped it from being distributed yet.

In the meantime, the need continues to grow. The Iowa Finance Authority has been flooded with rental assistance requests, said Ashley Jared, the agency’s spokeswoman. “It’s heart-wrenching to hear from Iowans who need rental assistance, knowing we have the funds in our account,” she said.

Bacon and others say they’re seeing Iowans at their agencies who have never before asked for assistance. That includes Brummett, who also got help from a Polk County Housing Trust Fund program that paid about $4,200 he owed in back rent, saving him from being evicted from his downtown apartment.

He said he was fired from his job at a Habitat for Humanity ReStore after getting into a disagreement with his boss over enforcing a COVID-19 rule. Brummett sought unemployment benefits, but ReStore challenged his claim and he lost. He’s appealing the decision, with a hearing set next month.

Brummett hopes if he’s successful with the appeal, he will get enough money to fix his car’s worn-out brakes. Then he can resume delivering food through DoorDash or pick up Uber trips, work that’s helped bring in money since he lost his job.

A moratorium on some people’s utility bills, for now

The amount of money Iowans owed on their utilities last year is likely greater than the $35.9 million reported to the Iowa Utilities Board, said Bill Brand, the Iowa Department of Human Rights division director who oversees the state’s energy assistance program.

The state receives past-due bill reports only from utilities it regulates, which serve about 70% of Iowans, Brand said. Among them are Iowa’s largest investor-owned utilities: MidAmerican Energy and Interstate Power and Light Co., Alliant Energy’s Iowa operating unit.

Iowans who get service from municipal and rural electric cooperatives likely account for the other 30%, Brand said, which could push the total to about $47 million.

A seasonal moratorium prevents utilities from disconnecting electricity for low-income residents during Iowa’s coldest months. And last year, the moratorium was extended during the coronavirus public health crisis at the direction of Gov. Kim Reynolds and the Iowa Utilities Board.

MidAmerican, Alliant and other utilities also waived late fees during the pandemic and set up additional service support to help establish payment plans for customers.

Iowa social service leaders are concerned about the size of bills that low-income families will get when the winter moratorium ends, especially given the sub-zero cold that’s blasted the state in recent days.

Iowa utilities are urging customers to conserve energy this week for several reasons: Northwest and central Iowa rural electric cooperatives that get power from a 14-state grid have instituted rolling blackouts to help keep electricity flowing in Texas and other southern states that have lost power due to extreme cold. MidAmerican Energy and Alliant Energy are asking Iowans to conserve gas, anticipating reduced supplies from the southern U.S.

But the utilities also are cautioning Iowans that if they turn down their thermostats and add extra layers of sweaters, socks and blankets, they may spare themselves outsized bills.

“The bills that people face when they come out of the moratorium can be astounding,” said Jane Drapeaux, CEO of the Hawkeye Area Community Action Program, an agency that serves residents in nine counties in eastern Iowa.

In recent years, the state has distributed more than $50 million each year to help people through its Low-Income Home Energy Assistance Program, referred to as LiHeap. But Brand said he’s unsure the money the state can provide — averaging about $450 per family — will be enough to cover their outstanding debts this season.

Nearly 185,000 Iowans owed an average of $194, based on the past-due accounts last year. It’s $58 more on average than Iowans owed in 2019, state data shows. Iowans owed a total of $28.7 million in 2019.

Brummett said the IMPACT community action agency was able to help him pay $440 in overdue utility bills, giving him a chance to get back on his feet. The agency’s assistance has been “a huge relief,” he said. “A weight’s been lifted from my shoulders.”

More help on the way from federal government

The $195 million in pending federal rental and utility assistance for Iowans provides some hope of bridging the gap. The money will be available to Iowans who lost jobs or income or were otherwise financially impacted by coronavirus-related shutdowns.

They can begin the process this week to qualify for the aid, said Jared, the Iowa Finance Authority spokeswoman.

Polk County, working with IMPACT community action agency, will have $14 million available for Des Moines and county residents. Both the county and state anticipate residents will begin receiving aid by March 1.

The reason the money isn’t already available is that the Biden administration is reviewing the eligibility requirements for the program, which was part of the $900 billion that Congress and then-President Donald Trump approved in December.

Housing advocates are pushing the administration to cut the documentation required to qualify for assistance, since low-income families often have limited access to computers and the internet, Jared said. And the state is marshaling added customer service to help residents complete file applications.

In addition to the public health emergency, Drapeaux said many families her agency works with also were hit with losses from the hurricane-force derecho that swept through a third of Iowa last August, damaging cities, homes, businesses and farms.

Matt Brummett poses for a photo at his apartment in Des Moines. Brummett is among nearly 185,000 Iowans who owed money for utility bills at the end of 2020.