Create energy safety net for Black, Indigenous, People of Color, and frontline communities

The cost burden of 100% regenerative energy should not fall on low-income people.

The “energy burden” is the share of annual household income used to pay annual home energy bills. “Low-income households face impossible choices between paying for energy, health, food, and housing. A 2011 national survey of households receiving assistance found that in the previous five years more than one-third had to forgo medical/dental care and purchasing medicines because of high energy bills; almost one in five had someone become ill because their homes were too cold. Six percent were evicted from rental units and four percent faced foreclosure, exacerbating homelessness.”[1]

Policy recommendations

Cost burden should not fall on low-income people. Advocates should ensure BIPOC and frontline communities are not carrying the burden of bill increases. Policies should be developed that lower the bills for BIPOC and frontline communities while lowering the energy burden. These communities often spend more of their income on energy even though they use less energy than more affluent communities. “Energy burdens were found to be greatest for low-income households in the following 10 major cities: Memphis (13.2 percent of income), Birmingham (10.9 percent), Atlanta (10.2 percent), New Orleans (9.8 percent), Providence (9.5 percent), Pittsburgh (9.4 percent), Dallas (8.8 percent), Philadelphia (8.8 percent), Kansas City (8.5 percent), and Cleveland (8.5 percent).”[2]

Push for affordability for BIPOC and frontline communities. Affordability policy components should create financial benefits for BIPOC and frontline communities who are supplied by RPS-complying companies, resulting in long-term savings.”[3] There are two approaches to accomplishing the affordability goal:

  • The most straightforward is to have an affordability program that limits household energy bills (including fuels for space and water heating and cooking) to the percentage of gross income using the Low-Income Energy Affordability Data Tool,[4] leaving the rest of the bill to be paid by public funds from various sources. This approach also provides incentives for investing in efficiency since the result would be reduced requirements for assistance dollars.
  • The second approach is moving away from energy assistance subsidies to ownership of clean energy assets and energy efficiency. A critique of energy assistance subsidies programs, such as the Low-Income Home Energy Assistance Program (LIHEAP), is that they subsidize natural gas. Approximately $3.7 billion per year is allocated to LIHEAP.[5] Most of that funding goes to annual subsidies for energy assistance, which often goes towards heating costs for low-income households, essentially paying natural gas bills on behalf of low-income customers and guaranteeing revenue for the utility. The recommendation is to move the entire system towards clean energy assistance programs that provide long- term renewable energy and efficiency benefits, and away from annual fuel subsidies.

    For example, Colorado is moving the LIHEAP / Weatherization Assistance Program to incorporate rooftop and community solar: “CEO launched its low-income community solar program in partnership with GRID Alternatives and eight cooperative and municipal utilities across the state. The goal of the program was to help reduce the energy burden for at least 300 low-income households and demonstrate whether dedicated community solar projects can be mutually beneficial for utilities and participants. The program has resulted in 1.5 megawatts (MW) of community solar projects and energy bill savings for nearly 400 households.”[6]

Participate in rate design. Advocates should include the following policy elements in their 100% regenerative energy policies:

  • In proceedings focused on rate design, ensure a good process is in place with opportunities for public participation.
  • Insist on BIPOC, frontline, and tribal representation in proceedings on rate design and affordability.
  • Include support, technical assistance needs, and capacity needed to engage in the process.
  • Demand intervenor compensation beyond stipends.
  • Cap fixed customer charges that typically are regressive.
  • Ensure rate structure for all customers, including industrial sector, reflects energy usage to prevent industrial customers being charged lower rates.

Promote comprehensive energy safety net elements. When designing a 100% regenerative energy policy, the following should be captured:

  • Ensure energy assistance does not impact other benefits, such as state grants.
  • When energy efficiency upgrades for low-income homeowners are made, protections should be put in place to prevent upgrades leading to increased property taxes.
  • Moratorium on shut off policies if residents are not able to pay their bills.

Examples

From Washington D.C.: Ensure energy savings are prioritized for low- and moderate-income residential ratepayers. “An application submitted by the electric company or gas company pursuant to this subsection shall meet the long-term and annual energy savings metrics, which shall primarily benefit low- and moderate-income residential ratepayers to the extent possible, quantitative performance indicators, and cost-effective standards established by the Commission.”[7]

How$mart: Mountain Association for Community Economic Development (MACED) in Kentucky: is a Community Development Finance Institution (CDFI) that offers energy savings loans for small businesses to finance improvements for energy savings or for new energy system installations. Typical uses are: Lighting, HVAC, and other upgrades; grocery refrigeration or other store upgrades; renewable energy system installations, such as solar panels and more. For residential customers, MACED partners with local electric cooperatives to offer inclusive financing for all cost effective energy efficiency upgrades using the Pay As You Save (PAYS) system.

References

  1. Makhijani, Arjun et al. “Energy Justice in Maryland’s Residential and Renewable Energy Sectors.” Institute for Energy and Environmental Research, 2015. Accessed 25 Jul. 2019.
  2. Report: ‘Energy Burden’ on Low-Income, African American, & Latino Households up to Three Times as High as Other Homes, More Energy Efficiency Needed.” American Council for an Energy Efficient Economy, 20 Apr. 2016, Accessed 25 Jul. 2019.
  3. Just Energy Policies and Practices. Module 2, Legislative Campaigns for Energy Justice.” NAACP Environmental and Climate Justice Program. Accessed 24 Jul. 2019.
  4. Low-Income Energy Affordability Data (LEAD) Tool.” Office of Energy Efficiency and Renewable Energy. Accessed 4 Sep. 2019.
  5. LIHEAP Fact Sheet.” U.S. Department of Health and Human Services, 16 Nov. 2018. Accessed 26 Jul. 2019.
  6. Cook, Jeffrey. “Reducing Energy Burden with Solar: Colorado’s Strategy and a Roadmap for States.” National Renewable Energy Laboratory, 14 May 2018. Accessed 26 Jul. 2019.
  7. Washington D.C. Council Bill 220904.” LegiScan, 18 Jan. 2019. Accessed 26 Jul. 2019.