Available at: Power Failure: Rising Energy Debt Is Climbing into the Middle Class[/] (The Century Foundation, July 21, 2026)
Summary:
A new report from The Century Foundation argues that unpaid utility bills are no longer just a problem for the poorest Americans. Instead, rising electricity and natural gas costs are increasingly affecting middle-income households, with energy debt spreading across a broader segment of the population.
Among the report's principal findings:
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The average monthly utility bill has climbed to approximately $250, representing roughly a 30% increase since early 2022. Several states have experienced even steeper increases.
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Average overdue utility balances have risen dramatically, reaching more than $200 nationally, while roughly one in twenty households now carries utility debt severe enough to place the account into collections.
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Financial distress remains concentrated among lower-income consumers and those with weaker credit profiles, but the report concludes that utility debt is now expanding well into the middle class. Moderate-credit households have experienced some of the fastest growth in overdue balances during the past several years.
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The report also documents significant disparities by race and geography, with Black households experiencing disproportionately higher rates of utility delinquency and larger average balances.
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Looking ahead, the authors express concern that increasing electricity demand—including from rapidly expanding data centers—combined with continued investment in the electric grid could place additional upward pressure on residential utility costs.
Commentary:
Whatever one's views on energy policy, inflation, or the causes of rising utility costs, this report highlights an unmistakable reality that bankruptcy practitioners see every day: Americans are struggling to keep up with basic living expenses.
Without becoming partisan or polemical, these statistics should give bankruptcy professionals—and perhaps bankruptcy policymakers—pause. Utility bills are not discretionary spending. Families cannot simply choose not to heat their homes in the winter, cool them during increasingly hot summers, refrigerate food, or keep the lights on while children do homework. When utility debt is climbing into the middle class, it is often a symptom of broader financial stress rather than isolated budgeting problems.
For bankruptcy attorneys, this trend also raises an uncomfortable question about the Means Test.
Many of the expense allowances incorporated into the Bankruptcy Code are based on IRS National and Local Standards, while other actual expenses—including utilities in many circumstances—may simply fail to reflect the real-world costs many families now face. If utility expenses have increased by thirty percent in only a few years, yet the deductions available under the Means Test do not adequately account for those increases, then the formula may increasingly overstate a debtor's ability to repay creditors.
Congress intended the Means Test to measure a debtor's actual ability to pay, not an idealized version of household finances based on outdated assumptions. As the cost of necessities continues to rise, there is a legitimate question whether the statutory expense deductions are keeping pace with economic reality.
Bankruptcy lawyers have long known that many clients are only one unexpected expense away from financial collapse. This report suggests that, for a growing number of Americans, even the monthly electric bill is becoming that unexpected expense.
Whether one agrees with every policy recommendation in the report, its central message deserves attention: when families with steady employment and traditionally solid credit histories begin falling behind on utility bills, the financial pressures facing American households are becoming increasingly difficult to ignore.
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