Detroit Residents Go to War with Utility Companies

By Erin Medell

?We have to fight for a fair rate system,? said Russ Bellant, a Detroit histoprian present ant the Michigan Welfare Rights Organization (MWRO) meeting on June 13, 2006.

Bellant has not been alone in voicing dissent toward utility rates in the Detroit area. The MWRO, a grassroots social agency, has been working tirelessly to reduce rates for utilities and to prevent shut-offs for low-income and unemployed residents who cannot afford to pay their utility bills.

Residents who attend MWRO meetings voice their concerns and share stories about their struggles with utility companies. Many residents in affiliation with the MWRO are victims of illness, and as a result, been unable to pay their utility bills. Often, these residents lose their water or power without warning, forcing them to rely on neighbors, or go door-to-door and ask for water and other basic necessities.

The struggle, anger, and feeling of helplessness, however, are not the only things concerning these residents. Utility rates in Detroit became a particular concern for residents when former President Clinton signed the Welfare Reform Act (WRA). Under this bill, welfare recipients were encouraged to find work and refrain from dependence on welfare assistance. Many unemployed residents has previously received assistance with some of their utility costs under the program Vendor Pay, but under the WRA, the recipients found that once they entered the workforce, they received bills for the unpaid portions of their utilities, with payment expected in full.

In October 2002, the utility companies completely cut out the Vendor Pay program, leaving nearly 30,000 Detroit residents to pay their entire bills immediately, or experience shut offs. According to DTE Energy statistics, 9,800 homes were without lights and gas in August 2002, and an additional 20,000 homes were in shut-off status, meaning that they were to lose their gas and electric services shortly thereafter.

According to Detroit Water and Sewage Department (DWSD) figures, over 45,000 homes were without running water in 2003, following shut-offs that resulted from their inability to pay. DWSD is a not-for-profit entity, is a direct branch of the Detroit city government, and is also the third largest water and sewer utility in the US.

MWRO organized a front to combat these conditions, and began by working on a request to the United Nations to seek foreign aid for the impoverished residents in Detroit. The MWRO also collaborated with other groups to form a movement to bring back Temporary Assistance to Needy Families (TANF), a welfare program that could assuage many of the financial woes Detroit residents face.

Concerning a fair rate system for utilities, a proposal for Detroit city government was crafted by MWRO as well. This also inspired work on a proposal to ban utility shut-offs, and is a proposal that MWRO hopes will influence the sate of Michigan, the nation, and the world.

According to DSWD figures, the average amount billed to Detroit customers in August 2005 was $46.76 per month, while suburban customers were billed an average of $21.47 per month. According to the same data, recent rate increases are a result of outdated infrastructure, expensive treatment regulation, and federal state mandates.

?Due to DWSD success in controlling operations and maintenance costs, a minimal increase is needed to cover the costs of day-to-day operations in the department,? said Victor Mercado, DWSD director.

While the number of residents without water and electricity increases with the prices, the goal of MWRO remains the same. They consistently seek to organize low-income workers, fight for the rights of the disadvantaged, eliminate poverty, and to ?build an army prepared to battle for the economic and human rights of millions of disenfranchised Americans.?

Taylor, MWRO?s fiery front leader, has served as State Chair of the organization since 1993, and is also a member of various boards and committees around the Detroit area, and represents public assistance recipients at the Michigan Department of Human Services offices over case disputes.

Taylor feels that the DSWD is causing un-necessary harm to the residents who are struggling to pay their bills, and in response to the rise in prices and shut-offs, MWRO and several utility clients file a complaint with DWSD. Following the filing, the water issue became even more serious. Not only were Detroit area residents having their water shut off, Highland Park residents also began to experience widespread foreclosures due to their water bills being attached to their property taxes.

The water affordability proposal posed by MWRO has been revised since its original release in 2005. The proposal cites the need for burden-based and fixed credit programs, and also includes a price limit on annual rates. It states that not only would this proposal increase the number of residents with satisfactory living conditions, but that it would also save utility companies money by decreasing disconnection requests, as well as disputes broken by payment plans.

?If you want to help the customers at large in the water department, you need to have a water affordability program,? said Sylvia Orduno, MWRO member.

Orduno also noted that the program?s implementation has been stalled by the attempts of city attorneys that are dissatisfied with the funding required for the program, which is estimated to be approximately $24,000.

According to a recent city council meeting release, Detroit recently approved $30,435.68 for wireless meter testers, and in the mean time, DSWD maintains that it is among the lowest in term of rates for water usage in metropolitan areas. This is particularly significant when it is considered that DWSD, unlike many locales, receives no subsides from property taxes.

DTE Energy was approved for a rate increase that started in October 2006. The company reported that the increase was in response to mandated environmental upgrades and capital investments.

?We understand the impact of rising energy prices on our customers,? said Robert Buckler, President and Chief Operating Officer of DTE Energy. ?An we are committed to doing everything we can to operate as efficiently as possible in this challenging and ever changing environment.?

?DTE Energy is committed to working with customers who may be having difficulty paying their energy bills,? added Eileen Dixon, a Media Relations employee of DTE Energy. ?In order for us to help them, it is important that they alert us to their situation before they?re facing service shut off, so we can direct them to the appropriate resources and programs.?

One of these programs, called The Winter Protection Plan, had an estimated 50,000 customers enrolled in the winter of 2005 and 2006, compared to the estimated 25,000 for the winter of 2004. In the mean time, MWRO water affordability proposals are still being considered, and regardless of the high prices and shut-offs, there is still hope that the proposal will be implemented.