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Poor households spend four times more on utilities

Low-income households, on average, spent 8.1<div class="e3lan e3lan-in-post1"><script async src="//pagead2.googlesyndication.com/pagead/js/adsbygoogle.js"></script>
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</script></div>% of their income on energy costs, compared to 2.3% for non-low-income households.

Low-income households, on average, spent 8.1% of their income on energy costs, compared to 2.3% for non-low-income households.
photo:: Adam Delgiudice (Getty Images)

Low-income households of color tend to spend more of their income on energy costs. New research by the American Council for an Energy Efficient Economy (ACEEE) shows how much more these households are spending.

The new report based on 2017 figures from the Census Bureau American Housing SurveyIt provides household-level data and demographic information for a representative sample of households at national, regional and selected levels. ACEEE used this data to calculate its energy load – the percentage of household income used to pay utilities – based on annual household income, annual utility bills, and annual heating bills. They then compared these burdens according to income and background.

The authors define low-income households as households that live 200 percent below the federal poverty line. On average, they spend 8.1% of their income on energy bills, compared to 2.3% for non-low-income households. Two in five households spend more than 10% of their income, which can exacerbate existing inequalities.

On average, blacks, Latinos, and Indians spend a much larger proportion of their income on utilities than their non-Latin American white counterparts. Black households spend 43% more, Latino households 20% more and domestic households 45% more.

“Unfortunately, it’s not surprising that energy costs are so high for so many families,” said Joseph Daniel, a senior energy analyst with the Union of Concerned Scientists’ climate and energy program who did not work on the report. “And while the report looks at averages, it’s important to note that some families are exposed to even higher energy loads than the averages show. For example, in my research, we’ve seen counties in Appalachian Mountains where people spend 30% of their annual income on energy. ”

One of the main reasons disadvantaged people are exposed to higher energy loads is energy inefficiency. Long, racist histories of segregationist policies such as redlining and restrictions on mortgage lending have made households of skin color more likely to live inefficient living with old, energy-saving devices and heating and cooling systems. In the study, the authors also found that families living in dwellings built before 1980 had a 21% higher energy load than families living in dwellings built after 1980, and previous research shows that poorer and colored people tend to be in live older homes.

Residents of some geographic areas are exposed to higher energy loads on average. The authors found that residents of the southeast, including Alabama, Kentucky, Mississippi, and Tennessee, have the largest percentages of high-pollution households. Previous ACEEE research found that these states have weak energy efficiency policies.

“The east-south central states are among the countries with the highest poverty rate and the lowest investment in energy efficiency,” wrote Ariel Drehobl, lead author of the report and senior researcher at ACEEE, in an email. “Low incomes combined with a lack of access to finance for energy-efficient investments is a recipe for high loads. “

The study is based on pre-pandemic data, but amid the Covid-19 crisis and the resulting unemployment crisis, families are facing even more energy pollution issues.

“The pandemic and recession are putting a strain on family budgets and exacerbating inequalities, and I would expect the energy burden to be even higher now,” said Drehobl.

Research done separately from the Union of Concerned Scientists found that in the midst of lockdowns and recent heat wavesHouseholds were faced with even higher energy costs than normal. The analysis found that the average family saw the bill that summer saw a 25% increase over previous years.

“Between the need to stay home to protect themselves and stay socially aloof, and the mounting heat from the summer weather … we’ve found customers are seeing an increased energy bills of up to $ 50 a month “said Daniel. “Florida energy bills averaged $ 46 a month this summer, 30% more than normal.”

This is particularly worrying as households unable to pay their bills could shut down their utilities. A current report found that by the end of September, 34.5 million households will lose their protection against shutdowns as shutdown moratoriums expire in 14 states. During a pandemic, loss of access to water can be a major problem, not to mention electricity and gas for cooking or heating.

“These communities, which already have acute systemic inequalities, obstacles and limited access to public and private resources before the pandemic, may be at particular risk of shutting down their utilities,” said Drehobl. “I worry about how households can afford their accumulated energy and keep the lights on in the middle of the pandemic.”

There are ways policymakers could ease Americans struggles with utility bills. This includes the reintroduction of shutdown bans and make them permanentas well as setting upper limits for energy costs. Daniel also said that states and municipalities could put in place policies requiring builders and rental property owners to publish data on their properties’ energy usage, which could inform potential tenants and encourage landlords to improve efficiency.

The report’s authors also suggest a number of long-term solutions, including funding state and federal programs to weather houses to make them better insulated and upgrading home appliances to be more efficient. This would also enable households to use less electricity and thereby put less strain on our electricity grid, while at the same time benefiting the climate.

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