A Serious Power Drain

Well here's the problem with the housing depression:  millions of empty houses mean power and water companies aren't earning any revenue.

“These are homes that were getting bills, and now they aren’t,” said Chuck Caisley, a spokesman for Kansas City Power & Light, which has 725,000 residential customers in Missouri and Kansas.

Despite the decline in electricity usage, customers shouldn’t expect rates to drop. Rates are only partly set by supply and demand. Regulators approve rates for utilities that also cover such costs as adding power plants to meet future demand, costs that must be paid whether usage falls or not.

The latest real estate reports aren’t encouraging to utilities looking for demand to pick up again. A RealtyTrak survey released recently said foreclosure actions were down in August in Missouri but up 18 percent in Jackson County, which had the most foreclosure notices of any county in the state. Foreclosures were up in Kansas, and Johnson and Wyandotte were No. 2 and 3 among its counties, RealtyTrak said.

Moody’s Analytics, in a separate survey, tracks the number of properties that lenders have repossessed and now own. It found that the Kansas City area ranked 25th out of the 384 metropolitan areas it surveys. In the Kansas City area there are 16.3 such properties for every 1,000 households, a rate more than double the national average and nearly three times the Missouri figure, which is 5.8 per 1,000 households.

Utilities have already been crimped by the housing slowdown because of fewer new homes being built. The effect of foreclosures has been more difficult to quantify, and the number of properties standing empty often isn’t tallied by utilities, or isn’t broken out in reports. The effect, if any, is typically lumped under “economic conditions.”

Missouri Gas Energy, for example, hasn’t singled out foreclosures but suspected they were becoming a factor last fall when the utility had fewer reconnections of gas service for homes that had been previously disconnected.

The Board of Public Utilities in Kansas City, Kan., said it hadn’t noticed any additional impact from foreclosures lately but added that some parts of its service territory were economically depressed before the recession.

Across the country, however, there is general acknowledgement that foreclosures are playing a role.

And that means the rest of America will see rates continue to rise at a time when they can least afford increases.  Combine that with the couple trillion needed to repair our rapidly deteriorating water and power infrastructure and you have a recipe for Americans to see their power and water bills skyrocket and do so exponentially.

There's a reason why Republicans don't want government to pick up the tab for fixing it.  They want to charge us for it instead.