Americans are facing power shutoffs and mounting debt as energy costs surge

Americans are feeling the pinch when it comes to their energy bills, with many struggling to keep up and facing the threat of power shutoffs. A recent joint report from The Century Foundation and Protect Borrowers revealed that nearly one in 20 households were either in collections or behind on their utility bills as of June. This issue was particularly prevalent in the South and Appalachia, where one in 12 households were already facing collections.

Over the last three years, the average overdue balance on utility bills has increased significantly, climbing from $597 to $789, a 32% jump. This rise in overdue balances can be attributed to a combination of factors, including rising energy prices and increased costs for essentials like child care and housing. Julie Margetta Morgan, president of The Century Foundation, expressed concern about the broader impact of families struggling to pay their utility bills, highlighting the overall financial strain many households are facing.

The increase in overdue balances is reflective of the overall rise in residential electricity prices, which surged by 10.5% between January and August 2025. Natural gas remains a popular choice for heating homes, but the growing demand from data centers, coupled with rising natural gas costs, has contributed to higher prices overall.

As we head into winter, the issue is expected to become more acute, with NEADA predicting an 8% increase in energy bills, bringing the average monthly cost to around $976. This spike in costs will put further pressure on households already struggling to make ends meet.

One of the most concerning consequences of falling behind on utility bills is the risk of power shutoffs. While most states have protections in place to prevent shutoffs during extreme weather conditions, not all states offer this safeguard. Despite these protections, the number of households facing shutoffs is on the rise, with NEADA estimating that 4 million households could have their power cut off this year, up from 3.5 million in 2024.

The impact of power shutoffs can be significant, particularly for low-income households. Disruptions to daily life, such as loss of refrigeration, internet, and lighting, can create challenges for families already struggling to make ends meet. Many turn to payday lenders, friends, or state forgiveness plans to cover reconnection costs, further exacerbating their financial burden.

As the cost of living continues to rise, it’s crucial for policymakers and utility providers to find solutions to support households facing energy bill challenges. With winter approaching and energy costs on the rise, addressing this issue is more important than ever to ensure that all Americans have access to affordable and reliable energy sources.