Millions of U.S. households are currently facing a growing financial burden from utility bills they simply cannot catch up on. According to a report from The Century Foundation, a well-regarded liberal think tank, nearly 6 million families are dealing with utility debt severe enough that it’s about to be sent to collection agencies. This situation has been worsening steadily, signaling serious challenges ahead for many Americans.
The report analyzed consumer credit data and found that overdue utility debts have jumped by nearly 10% annually, with the average past-due balance now close to $790. At the same time, monthly energy bills saw a 12% increase, a clear sign that rising costs are pushing households deeper into debt. This data covers the period from the second quarter of 2024 through the second quarter of 2025, capturing a troubling trend that has intensified in recent months.
Utility bills are among the core monthly costs families manage alongside mortgage and car payments. As energy prices continue to climb, many households are struggling to keep up, forcing difficult financial decisions. The report notes that average overdue utility balances vary across demographic groups, with communities of color tending to owe nearly $900 on average, significantly higher than the roughly $750 balance typical among white households. These gaps reveal how the growing utility debt burden does not impact all communities equally.
One factor that contributed to the buildup of unpaid utility balances was the moratoriums during the pandemic that temporarily prevented disconnections. While those protections helped keep power flowing when people were most vulnerable, they also allowed debts to accumulate. Now those balances have come due, coinciding with requests from utility companies for billions in rate increases, further straining family budgets.
This situation goes beyond just numbers on a bill. When debts become unmanageable, the risk of service disconnection rises, which can threaten basic health and safety, especially during colder months. The stress of falling behind and facing collections increases the mental health burden on many families, particularly those already vulnerable due to income or health issues.
The Century Foundation’s detailed analysis used a nationally representative sample of U.S. adults with credit records to track utility debt patterns. It found that about 4.34% of households, roughly 5.77 million people, carry severe utility debt. The number climbs higher in certain regions, such as parts of the South and Appalachia, where nearly one in twelve households face these challenges.
Utility companies and regulators must balance the need to maintain their services and infrastructure while addressing the affordability crisis many customers now face. The report suggests that innovative approaches, such as proactive identification of at-risk customers using advanced data tools, could help mitigate some of the harm caused by debt collections. However, with energy costs rising faster than incomes, this pressure on families is unlikely to ease anytime soon.
As this crisis deepens, it underscores the need for practical and compassionate solutions that help families manage utility costs without cutting off essential services or pushing them further into hardship. Understanding the scale and human impact of utility debt is a critical step in shaping policies that address the root causes, rather than just managing the symptoms.Â
