Paying your monthly electric bill is crucial to keeping your lights on and appliances running. But life happens and you may find yourself facing financial hardship that makes it difficult to pay your electric bill. What happens if you don’t pay this essential utility bill?
Unfortunately failure to pay your electric bill can lead to some serious consequences. In this comprehensive guide I’ll walk through the step-by-step process of what happens when you don’t pay your electric bill and provide tips on how to avoid service disconnection.
The Importance of Paying Your Electric Bill
Before diving into the nitty-gritty details, it’s worth underscoring why paying your electric bill should be a top priority. Electricity powers your lights, refrigerator, AC, and other appliances that make your home livable and comfortable. Losing access would make daily life extremely difficult.
Plus, failure to pay electric bills damages your credit score and dings your ability to qualify for loans, credit cards, apartments, and more down the line. Maintaining strong credit is key for accessing affordable borrowing options.
So do your best to keep your electric account current, even when money is tight. But if you do fall behind, here is what to expect.
The Consequences of Not Paying Your Electric Bill
1. Late Fees
Electric bills come with a firm due date, often around the 20th of the month. If your payment is not received by the due date, your electric company can charge a late fee, typically 1.5% to 5% of your balance.
So if your electric bill is $100 and you’re late with payment, you could owe $101.50 to $105. Late fees quickly add up, making your balance grow.
2. Disconnection Warning
If you remain past due on your electric bill after the late fee is applied, your electric company will send a disconnection notice. This serves as an official warning that your service will be shut off if you do not pay the past due amount immediately.
Disconnection warnings clearly state a “shut off date,” usually 10 to 15 days out, when your power will be disconnected if the bill remains unpaid.
3. Electricity Shut Off
If you still have not paid your past due electric bill by the shut off date, the utility company will send a technician to physically disconnect your home from the electric grid. Your power will go out.
This is the worst case scenario, as losing electricity severely impacts your quality of life and ability to live comfortably in your home.
4. Reconnection Fees
To get your electricity turned back on after disconnection, you must pay the full past due amount on your account plus an additional reconnection fee. This fee can range from $30 to $100.
Reconnection is not instant. It can take hours or days after you pay off your balance for your electric company to dispatch a technician and restore power.
5. Security Deposits
If you have been disconnected for failure to pay, some electric companies will require a security deposit before reactivating your service. This lump sum deposit serves as collateral in case you fall behind on bills again.
Security deposits typically equal 2 to 2.5 times your average monthly electric bill. So if your monthly electric costs are $150, your security deposit could be $300 to $375.
6. Credit Score Damage
As an additional penalty for nonpayment, your electric company may report the past due status of your account to credit bureaus once your balance is 60 to 90 days overdue. This dings your credit score.
A lower score makes it harder to qualify for credit cards, loans, mortgages, and apartment rentals. Poor credit costs you more in interest charges and deposits.
7. Debt Sent to Collections Agency
If you leave your electric account balances unpaid long term, the utility company writes it off as bad debt and assigns the amount owed to a collections agency.
The collections agent then aggressively contacts you to collect on the past due amount, plus additional fees. Having debt in collections severely damages your credit and overall finances.
How to Avoid Electricity Disconnection
Clearly, you want to avoid having your power shut off due to nonpayment. Here are some tips to help prevent electricity disconnection:
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Pay as much as you can – Even if you can’t cover the full balance, pay what you are able each month to keep penalties and fees lower.
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Call your electric company – Discuss payment plan or extension options if you are facing financial hardship.
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Apply for bill assistance – Federal, state, and local programs help pay utility bills for low income households.
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Prioritize electric bills – Don’t let other expenses crowd out this vital payment.
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Conserve electricity – Use less power to reduce your monthly bills.
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Compare electric plans – See if switching providers lowers your rates.
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Earn extra income – Bring in more money through a side gig to cover essential costs.
What to Do If Your Power is Shut Off
If you experience the nightmare of having your electricity disconnected due to nonpayment, take the following steps:
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Pay your past due balance plus all fees to have service restored quickly.
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Call emergency services if the power loss puts health at serious risk.
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Use a generator, batteries, coolers, and camping supplies to meet basic needs temporarily.
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Stay with friends or family if you cannot live without electricity.
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Apply for one-time utility bill grants from charities or energy assistance funds.
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Discuss reasonable long-term payment plans with your electric provider.
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Prioritize electric bills going forward and budget billing into your monthly expenses.
The Bottom Line
Losing your electric service due to nonpayment severely disrupts your life and finances. Do everything possible to keep your account current. But if you do fall behind, know the consequences, and take steps to get reconnected safely and minimize damage to your budget and credit. Maintaining reliable access to electricity should remain a top priority.
What to do if you can’t pay your utility bills
- Contact your utility company. If you cant pay your utility bills, “call the utility company as soon as possible to make arrangements,” Zydonik says. For a temporary money issue, for instance, you could ask for a short payment extension of a few days to avoid late fees. If youre usually on time with payments, you may get a yes. If you need more time to pay off the full balance, you could request a longer-term repayment plan. In that case, the utility company may work with you on a monthly payment that better fits your budget. You could also request a temporary payment delay if youve had a medical emergency or declared bankruptcy—or if shutting off utilities would be dangerous, such as turning off the heat during cold winter months. If youre already behind on payments, you could ask for a deferred payment agreement to help you pay off your past-due balance over a set period of time. Finally, Zydonik suggests paying what you can, even if its not the entire balance: “A number of our clients feel its an all-or-nothing proposition when it comes to paying their bills. Applying what is possible goes a long way in gaining support to get through a downtime.”
- Apply for utility bill assistance programs. If you need help paying bills, beyond what your utility company can offer, several programs could be an option: Federal assistance programs: The federal government helps with energy bills through the (LIHEAP). Theyre run at a state level, and whether you qualify depends on where you live. The federal government could also help pay for your phone and internet through if your income is 135% or less than the for your family size. State and local assistance programs: You likely can find a list of utility bill assistance programs through your state or citys Department of Social or Community Services or Board or Commission of Public Utilities, such as these for , , and . Zydonik acknowledges that researching and applying for all these government programs can feel overwhelming. But local resource centers might be able to explain how to get help with utility bills. “Weve been able to aid our neighbors to navigate the labyrinth of local, regional, and national services that can keep their utilities up and running.” Charities and nonprofits: Speaking of assistance programs, religious and secular charities and nonprofits could offer emergency help with utility bills. You could also turn to charities for other types of support. “Utilizing local food banks allow dollars to be used elsewhere,” says Zydonik.
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- Roughly 1 out of 6 American households struggles to pay for utilities, such as electricity, oil, and gas.
- If you dont pay your bill, it could lead to extra fees, credit score damage, and service disruptions.
- You could get utility bill support from government programs along with many nonprofits.
Rising costs have been squeezing budgets around the country. In 2022, more than 20 million American families, or about 1 in 6, were behind on utility bills, according to the National Energy Assistance Directors Association.1 If youre worried about covering these costs—think: oil, gas, electricity, cable, phone, internet, sewer service, trash pickup, and water—there are ways to keep your utilities running while protecting your finances. Here are some tips for when you cant pay your bills.
What Happens If I Don’t Pay My Electric Bill? (Worst Case Scenario)
What happens if you don’t pay your utility bills?
To pay off old utility bills: Not paying utility bills has both immediate and long-term negative consequences, including: The utility being shut off: While it’s against the law to turn off electricity or heat during the winter in many states, for the most part, if you don’t pay, you lose the service until you pay.
What happens if I fail to pay my electric bill?
If you fail to pay your electric bill for a few months, your utility company might shut off your service. Usually, they will not do this after one late payment. There might also be a reconnection fee to have the service turned back on.
What happens if I pay my electric bill late?
If you are paying electric bills late regularly or even once, you should contact your provider. If needed, they may be willing to adjust your due date to help you make on-time payments. After all, they want to get paid for the services provided. So what happens if you pay your electric bill late? At first, nothing may happen.
What happens if I miss a payment on my energy bill?
If late payments continue to happen, then an energy company can require a security deposit on your account to continue receiving services. Additionally, your internal credit rating with the energy company can be damaged. If your late payments eventually turn into missed payments, then the energy provider may issue a disconnect order.