Energy Burden’s Impact on Households, Health, and the Environment | Blog Series Part 1/3

The Just Solution Collective presents, “Energy Burden and the Clean Energy Transition”, a three-part blog series that addresses energy burden reduction as an important part of the clean energy transition for environmental justice and climate justice. Through this blog series, we will highlight key elements from our latest report and spotlight justice-centered policy & program solutions to address the issue while our nation considers changes to the energy sector. 

Energy Burden’s Impact on Households, Health, and the Environment (Part 1)

Low-income Households Spend more on Energy

Studies show that lower-income households spend a bigger share of their income on energy than higher-income households (1). Even before the COVID-19 pandemic and recession, one in four households struggled with a high energy burden, spending more than six percent of their income on electricity and heat (2). In the U.S., 67% of low-income households experience a high energy burden, and 60% of those households with a high energy burden face a severe energy burden (3). 

The American Council for an Energy-Efficient Economy (ACEEE) released a research report in 2020 that found that low-income, Black, Hispanic, and Native American households all “face dramatically higher energy burdens, spending a greater portion of their income on energy bills than the average household” (4). Their study found similar patterns across the national, regional, and metro areas. However, residents of the East South Central region (Alabama, Kentucky, Mississippi, and Tennessee) have the greatest percentage of highly burdened households (38%).

American Council for an Energy-Efficient Economy Energy Burden Report 2020

Energy Burden Impacts Health

Energy-inefficient homes are a significant contributor to high energy burdens. Many low-income consumers live in energy-inefficient homes, with substandard insulation or older appliances, which can mean they have a higher energy cost burden than wealthier families (5) even though, on average, they live in smaller homes. The inefficiency shows up as higher energy use power square foot of home and therefore higher cost per square foot. Many low-income households are also renters and—compared to homeowners—may have less control over the quality of their housing. Furthermore, high energy burdens are correlated with greater risk for respiratory diseases, increased stress, and economic hardship, including difficulty moving out of poverty (6). About one in five households had to reduce or forgo basic necessities like food and medicine to pay an energy bill (7). These same communities who experience high energy burdens also experience acute systemic inequalities, barriers, and limited access to public and private resources, and are now being hit the hardest by job losses and health impacts of the COVID-19 pandemic.

Climate Change Makes Matters Worse 

Climate change also highlights the need to address high household energy burdens. As extreme weather events are exacerbated by climate change, such as more heatwaves, hurricanes, extreme winter storms, and longer fire seasons, the demand for air conditioning and energy will increase (8). Energy is needed now more than ever to prevent indoor heat-related illnesses and deaths or lethal cold snaps, as it happened in Texas in February 2021.  

(Customers wait in line to get their propane tanks filled in Austin, The Washington Post)

In addition, most of the electricity used in the U.S. is generated using fossil fuels, further exacerbating climate change and ultimately the energy burden. In 2020, about 4.01 trillion kilowatt-hours (kWh) of electricity were generated at utility-scale electricity generation facilities in the United States (9). About 60% of this electricity generation was from fossil fuels—coal, natural gas, petroleum, and other gases. About 20% was from nuclear energy, and about 20% was from renewable energy sources (10).

There is a real opportunity to establish long-lasting climate and energy policies and programs. With extreme weather exacerbated by climate change, people are paying more attention to the national electricity landscape, how it functions, and how to transition it to cleaner alternatives. In addition, evaluation of our energy system is a rising priority for policymakers as they confront a host of social, economic, and health burdens caused by the existing energy system (11). 

An Equitable & Just Framework 

Converting our energy is about more than replacing fossil fuels with clean energy sources. The transition to 100% begins by addressing the way our energy system is structured and requires that power and economic benefits shift hands from the few to the many. This refers to an energy justice framework of achieving equity in both the social and economic participation in the energy system, while also remediating social, economic, and health burdens on those disproportionately harmed by the energy system (12). Renewable energy can be a vehicle to democratize our energy infrastructure, improve grid reliability and resilience, and distribute the economic benefits of generating energy more equitably.

The “Building Blocks for a Regenerative & Just 100% Policy” report, by the Just Solutions Collective, offers a comprehensive approach to achieving 100% regenerative energy that is centered on justice (13). Justice-centered policies recognize that there are long-standing systemic and historical injustices in our energy system and that the bedrock of our energy system is plagued with the profit motive of the fossil fuel industry. Therefore, a clean energy future should be based on a Just Transition (14) where there are explicitly named benefits to and prioritization of frontline communities and Indigenous sovereignty, as represented in the image below. 

The central focus of this analysis is on addressing energy burden and ensuring that in our transition to a clean energy future, we do not make people poorer. It recognizes within our framework that we must move away from a reliance on fossil fuels and an extractive economy, therefore we must both ensure clean energy alternatives and funding and support for BIPOC and lower-income people to access them, as well as reduce the use of dirty energy through efficiencies. 

Just Transition Image Developed by Movement Generation with Our Power Campaign

Without explicit action, low-and moderate-income (LMI) households, specifically low-income households, are likely to face increased energy burdens during the transition to a clean energy system. For these reasons, the Just Solutions Collective reached out to experts who work in low-income, BIPOC, and frontline communities across the country and asked their input on how to best address the energy burden to ensure the transition is equitable and just. Stay tuned for part two and three of our blog series that will spotlight justice-centered policy & program solutions identified by key experts to address energy burden while our nation considers changes to the energy sector. 

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On March 31, 2022, Just Solutions Collective hosted a webinar sharing key findings from our “Energy Burden and the Clean Transition” report including a panel of practitioners and experts in the field. You can find the recording of the webinar here (the password is 6C5=Nd0D). Read the full report here.

Endnotes: 
  1. Noor, Dharna. “Poor Households Spend Nearly Four Times as Much on Utilities as Well-off Ones.” Gizmodo, Gizmodo, 11 Sept. 2020, https://gizmodo.com/poor-households-spend-nearly-four-times-as-much-on-util-1845010294. 
  2.  Drehobl, A., L. Ross, and R. Ayala. 2020. How High are Household Energy Burdens? Washington, DC: American Council for an Energy-Efficient Economy.
  3. Ibid.
  4. Ibid.
  5. Low-Income Households Pay More for Energy, but Efficiency Can Help, U.S. News, 30 Sept. 2020, https://www.usnews.com/news/healthiest-communities/articles/2020-09-30/poor-households-pay-more-for-energy-but-efficiency-can-help. 
  6. Ibid.
  7.  “U.S. Energy Information Administration - EIA - Independent Statistics and Analysis.” RECS: One in Three U.S. Households Faced Challenges in Paying Energy Bills in 2015, https://www.eia.gov/consumption/residential/reports/2015/energybills/. 
  8. “U.S. Energy Information Administration - EIA - Independent Statistics and Analysis.” June Heat Wave in the Northwest United States Resulted in More Demand for Electricity - Today in Energy - U.S. Energy Information Administration (EIA), https://www.eia.gov/todayinenergy/detail.php?id=48796. 
  9.  “Frequently Asked Questions (Faqs) - U.S. Energy Information Administration (EIA).” Frequently Asked Questions (FAQs) - U.S. Energy Information Administration (EIA), https://www.eia.gov/tools/faqs/faq.php?id=427&t=3. 
  10. Ibid.
  11. Baskin, Kara. “Why Energy Justice Is a Rising Priority for Policymakers.” MIT Sloan, MIT Sloan School of Management , 27 Jan. 2021, https://mitsloan.mit.edu/ideas-made-to-matter/why-energy-justice-a-rising-priority-policymakers. 
  12.  “What Is Energy Justice?” Initiative for Energy Justice, 15 Feb. 2022, https://iejusa.org/. 
  13. “Regenerative & Just 100% Policy Building Blocks Released by Experts from Impacted Communities.” Just Solutions Collective, 21 Jan. 2020. 
  14.  “Movement Generation Justice & Ecology Project.” Movement Generation, https://movementgeneration.org/movement-generation-just-transition-framework-resources/. 
Photo Credits: 
  1. Getty Images
  2. American Council for an Energy-Efficient Economy Energy Burden Report 2020
  3. The Washington Post
  4. “Movement Generation Justice & Ecology Project.” Movement Generation