Covering COVID-19 is a daily Poynter briefing of story ideas about the coronavirus and other timely topics for journalists, written by senior faculty Al Tompkins. Sign up here to have it delivered to your inbox every weekday morning.
I do not have to tell many of you what has happened to heating bills this winter. Add those beauties to the fact that a growing number of households are behind on their water, sewer and cable bills and we have a genuine problem building around the country.
My journalist friend Jim Sweeney was the first to tip me off to this trend, with a note that said:
Got my quarterly water bill yesterday and the news insert from Washington Suburban Sanitary Commission has an item on assistance in paying bills that says “one in five customers is past due on their bills — equating to more than 90,000 delinquent accounts totaling more than $70 million in arrears.” They attribute this to the pandemic, at least in part.
I started poking around and found that what Jim spotted is showing up around the country. The Staten Island Advance reports:
More than one million households in New York have fallen delinquent on their energy, water, telephone, and internet bills since the beginning of the coronavirus pandemic, which has created a utility crisis in the state.
At least $1.7 billion is owed in unpaid energy and utility bills, as well as hundreds of millions of dollars more in telephone, water, and internet arrears.
Advocacy groups say without a resolution in the state’s 2022-2023 budget, the crisis will continue to get worse.
The American Association of Retired Persons (AARP) and the Public Utility Law Project (PULP) are urging the Senate Majority Leader Andrea Stewart-Cousins and Assembly Speaker Carl Heastie to include a resolution in the budget to address the billions owed by New Yorkers in unpaid energy, water, telephone and high-speed internet bills.
Skyrocketing natural gas prices and brutally cold temperatures have sent Minnesotans’ utility bills soaring, making it difficult for many to keep up — especially those already facing financial stress due to the pandemic. More than 246,000 Minnesotans were behind on their CenterPoint Energy and Xcel Energy bills last month, or roughly 11% of the companies’ customers.
NBC News reports that charities that help people with overdue bills are getting swamped:
The number of people looking for help to pay their bills has grown as electricity prices climb, said Tanya Jones, the director of energy assistance and community development at HeartShare Human Services, a nonprofit organization that provides utility assistance for low-income consumers in New York.
“It was really a shock to them,” said Jones, who also is on the board of the National Energy and Utility Assistance Coalition, a group of nonprofit groups and utilities across the country. “We are getting a surge in customers because a lot of people need help.”
Amy Sananman, a senior vice president of United Way of New York City, said such increases in energy bills are “going to have a ripple effect on New Yorkers who are going to be forced to tighten budgets elsewhere, and that might mean food, housing, health care and education.”
Jones said: “There are more people that are trying to figure out what to do as far as maintaining their household and providing for their families, and so it’s really hard. We’ve braced ourselves, and we’re ready to provide as much assistance as we can.”
Journalists, here is a clickable map with contact info for Low Income Home Energy Assistance Program coordinators in each state.
How much will gasoline and natural gas prices increase due to Russian troop movements?
When oil and natural gas prices rise, gasoline, diesel and home heating costs also eventually rise. Home energy prices have been a key factor in the inflation that hits everyday consumers. The Russian incursion into Ukraine will probably cost consumers something. We just don’t know how much yet.
With Russian troops on the move into Ukraine, world oil prices moved closer to $100 a barrel and some forecasters say $130 a barrel is not unthinkable. Right now, the price of gasoline is about 53% determined by the price of crude. Other major costs include distribution and marketing (21%), federal and state taxes (15%) and oil refining costs (about 12%). While the price of oil is no doubt concerning to everyone, a 30% rise in crude might mean a 15% rise in pump prices.
To understand why oil and natural gas prices may rise with this military threat, consider that Russia produces 17% of the world’s natural gas and 12% of its oil. That makes it one of the world’s biggest producers. Add this to the fact that much of Russia’s natural gas sales flow to Europe through pipelines that run through Ukraine.
On Tuesday, Germany halted the Nord Stream 2 Baltic Sea gas pipeline project. That pipeline was designed to double the flow of Russian gas direct to Germany. Construction is done but it is awaiting European Union certification. Germany gets half of its gas from Russia. (Voice of America has a good backgrounder on Nord Stream 2.)
If President Joe Biden’s economic sanctions against Russia attack energy exports, it will quickly escalate global gas and oil prices, which will increase inflation in the United States.
One factor to watch is a quietly developing negotiation that market watchers say could stabilize oil prices. A senior European Union official says a deal in efforts to revive the 2015 Iran nuclear agreement is “very very close.” If that happens, Iran might add a million barrels of oil a day to the global market.
Wheat, soybean, fertilizer prices rise, too
Russia and Ukraine together produce 29% of global wheat exports, 19% of global corn supplies, and 80% of global sunflower oil exports. Tuesday’s wheat prices shot up more than 6%. Soybean prices rose close to 3%. Corn prices hit a seven-month high. That is great news for American farmers and, if the prices stay high, the U.S. Department of Agriculture says American wheat farmers will step up to offset supply problems in Europe.
Russia also is a major producer of fertilizer products. Any sanctions could cause an interruption in fertilizer supplies, which would drive up prices just before the spring planting season.
‘Immense fraud’ involving pandemic relief funds
To the surprise of nobody, the cases are piling up involving people who stole hundreds of thousands and even millions of dollars in federal pandemic relief aid. In some ways, it is the cost of shoving $6 trillion of grants, loans, emergency stimulus checks and rental assistance out federal doors so fast during the pandemic. By some accounts, Michigan may have paid nearly $4 billion in fraudulent unemployment benefits while California paid $20 billion to fraudsters.
“There is no question that the immense fraud that took place at the crush of the pandemic in 2020, particularly in small business loans and unemployment insurance, is the largest oversight challenge the Biden administration inherited,” said Gene Sperling, the president’s chief coordinator for stimulus spending, stressing that the administration is taking “significant steps to strengthen anti-fraud controls.”
The troubles are laid bare in stinging federal oversight reports issued over the past year. Across the agency’s two key emergency initiatives, investigators have questioned nearly every aspect of SBA’s spending, flagging billions of dollars in suspect loans and grants, overpayments to those who should not have received them and in some cases outright fraud. One effort meant to help businesses in economic distress may even be rife with identity theft: Watchdogs said they had received more than 845,000 applications for aid that are now suspected of having come from individuals using stolen identities — some of which were funded anyway.
Meanwhile, the calls to the SBA’s tip line for criminal activity spiked by more than 37,000 percent over an 18-month period earlier in the outbreak.
Hannibal “Mike” Ware, the inspector general of the Small Business Administration, testified before Congress last month and said, “Managing COVID-19 stimulus lending is the greatest overall challenge facing SBA, and it may likely continue to be for many years as the agency grapples with fraud in the programs, particularly in the COVID Economic Injury Disaster Loan (EIDL) Program, and the process of Paycheck Protection Program (PPP) loan forgiveness. Pandemic response has, in many instances, magnified the challenging systemic issues in SBA’s mission-related work.”
Ware said his office has recovered and saved more than $4 billion while Congress allots $478 million to fight the fraud.
There are many places that journalists can go to look at some of the grants and loans that the government dispatched. The SBA is one agency that sent money to a million businesses and nonprofits (including Poynter) around America. You can look up loans that were for more than $150,000 and the names of recipients — without dollar amounts — who got less than that.
The Pandemic Response Accountability Committee is source to track fraud investigations. PRAC, as it is called, has an interactive map that plots the biggest fraud cases brought by the government so far.
PRAC says identity theft is a major way that fraudsters have grabbed federal money. In some cases, there is almost no chance that the government will recover the stolen money. The Seattle Times reports on how thieves stole $650 million in state and federal unemployment payments in the opening months of the pandemic. Two years later, 40% of that money is still missing and investigators are tracking bank records to try to find more. That may take years to complete and, even then, some of the money may have changed accounts so many times in so many places it may be untraceable.
Australia reopens borders after two years
Australia is finally reopened after two years of trying to fight COVID-19. The country lifted quarantine requirements for vaccinated visitors except for Western Australia, which still requires to require travelers to quarantine for seven days. That may change March 3.
Condom maker expects a significant post-pandemic increase in sales
A company you probably have never heard of, Karex, makes one of out of every five condoms worldwide and is best known for its Durex brand. The company lost money in December because of high materials costs and a steep decline in sales, but the company told investors that it is expecting condom sales to grow fast as countries lift COVID-19 restrictions.
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