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Utility Debt Collection Facts

Utility Debt Collection Facts
Mark Cappel
UpdatedSep 18, 2023
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    4 min read
Key Takeaways:
  • Is your utility regulated by your state public utilities commission?
  • How to find your state utility regulator.
  • Beware: Your state's statute of limitations may not apply.

Learn How to Handle Utility Debt Collection

When it comes to debt collection, utilities are unusual, and do not follow the same laws credit card issuers, automobile finance companies, or mortgage lenders must follow.

Utility Regulation
State Public Utility CommissionMunicipal or No Regulator
Electric* Natural Gas Telecommunications*Water Sewer Cable/Internet
* May be locally regulated if municipally owned

Utilities regulators. Source:

Utilities are not bound by any federal consumer laws, and it is unsettled if utilities even need to honor the same state statutes of limitations everyone else must follow when it comes to collecting unpaid bills. Some utilities report to your state’s public utility commission, and must follow its rules. Other utilities, including one or more providing services to you right now, are barely regulated at all and do not need to pay attention to a utility commission.

Here’s what to do when you have a debt collection problem with a utility serving you.

Gas and Electric Utility Collections

Gas and Electric utilities are usually subject to rules created by your state’s public utility commission. If you have a problem with your gas or electric utility, your first step is to contact your state’s utility regulator. Start with this list of regulatory commissions to find your state’s utility regulator.

If you have problems paying your credit card debts, consult with a debt resolution partner who can discuss your options.

Your state regulator may or may not have authority over your utility. Investor-owned utilities are highly regulated. Municipal and rural electric cooperatives (co-ops) have less or no regulation. When you contact your state regulator, learn if your utility is regulated. If your utility is subject to state regulators, learn the rules they must follow concerning debt collection. State regulators usually post these rules, sometimes called "Consumer Rights," on their Web sites.

Here are some of the issues you need to learn:

  • What is the time limit for collecting the debt?
  • What payment plans must utilities offer?
  • Are utilities allowed to cut-off service during winter months?
  • What, if any, grant programs available to the unemployed, people on fixed incomes, or the disabled?
  • Does the regulator offer a consumer-aid or ombudsman’s office to mediate disputes?

Note that the statute of limitations may apply to the utility trying to actively collect the debt from you. However, you may not be able to get service if you have an outstanding bill. Why? In general, businesses have the right to transact business with whom they wish. If you owe someone money, even if the debt is from 50 years ago, they can do business with you on the condition the old debt is paid. In all but two states, the passing of a state statute of limitations does not cancel or forgive a debt.

Use the information you learn from your state utility commission to resolve the debt.

For example, if you cannot afford to pay your utility bill, learn if you live in one of the 20 states that offer programs for the unemployed or people with low or no income. Learn if there’s a level-payment plan or low-income discount that might reduce your bill. Apply for a grant or deferment, if available.

If you are disabled, some states outlaw the disconnection of your utilities if the utility knows you are disabled.

Collections by Municipal Utilities

What should you do if your utility is not regulated by your state utilities commission?

Municipal and customer-owned utilities must follow published rules for operating as public utilities. Here, you will need to contact the customer service staff at your utility to learn what payment plans it offers. If you get no satisfaction in dealing with the customer service staff, contact a local legal aid society to enlist the aid of a lawyer in breaking the logjam.

The Debt Coach is a no-cost, online tool to help you understand yoru debt resolution options. Give it a try!

Make sure you agree to a payment plan you can afford.

Collections by Unregulated Utilities

Some utilities are not regulated, or are not required to offer payment plans. For example, propane and heating oil companies and satellite TV providers are not regulated, but are subject to state debt collection laws, like any other business. If you have a problem with non-utility in your state, contact your state attorney general’s office, and file a complaint.

Utilities Collections by a Collection Agent

If you move from a utility’s service area or otherwise no longer receive services from the utility, the utility may ask a collection agent to collect the account, or sell your account to a collection agent. The fact the collection account was based on a utility debt does not change the rules collection agents must follow. In other words, collection agents must follow the Fair Debt Collection Practices Act (FDCPA) regardless of the collection account’s source.

Bills Action Plan

If your utility is regulated, go to your state regulator's Web site to learn the rules your utility must follow. Apply for aid if you are unemployed, low-income, or disabled. Unregulated utilities must follow self-imposed rules for customers unable to pay a bill. Consult with your state attorney general if a utility is not following your state's consumer protection laws.

Did you know?

Debt is used to buy a home, pay for bills, buy a car, or pay for a college education. According to the NY Federal Reserve total household debt as of Q2 2023 was $17.06 trillion. Auto loan debt was $1.582 trillion and credit card was $1.031 trillion.

According to data gathered by from a sample of credit reports, about 26% of people in the US have some kind of debt in collections. The median debt in collections is $1,739. Student loans and auto loans are common types of debt. Of people holding student debt, approximately 10% had student loans in collections. The national Auto/Retail debt delinquency rate was 4%.

The amount of debt and debt in collections vary by state. For example, in Illinois, 26% have any kind of debt in collections and the median debt in collections is $1485. Medical debt is common and 14% have that in collections. The median medical debt in collections is $641.

To maintain an excellent credit score it is vital to make timely payments. However, there are many circumstances that lead to late payments or debt in collections. The good news is that there are a lot of ways to deal with debt including debt consolidation and debt relief solutions.



DDanielle Wilson, Jun, 2021

Im move in July 1 2021 and I called my electric company and I gas company They’re saying that my bills went to a collection agency!! They’re saying that the bills over 22 years old I don’t know how that will be because at that point I was a minor I was only 15 years old and I like to talk to someone about my bills

JJosh, Aug, 2021

Hello Danielle.

Thank you for reaching out. We would be more than happy to direct you to one of our affiliates who can discuss your bills. Should you like to speak with someone directly you can converse with Freedom Debt Relief at 800-852-1431. We also recommend exploring our website at to review other affiliates that may assist you in your financial needs.

Regards, Josh