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New Utility Models Positively Affect Customers With Low to Moderate Incomes

image credit: Image Credit: ID 137403791 © Mariia Boiko |

“Low- and moderate-income (LMI) customers historically have had troubled relationships with the utility companies that provide them with power,” according to a GreenBiz article that explains how utilities can do more to collaborate with these customers. Both unequal proximity to polluting power plants and the need to spend a high percentage of their income for electricity have put LMI customers in a position relative to utilities that’s been uneasy at best. However, industry efforts to build a more sustainable and affordable power delivery system may result in the strengthening of these relationships as well.

Exposure to Pollution

A Food & Water Watch article summarizing its report, Pernicious Placement of Pennsylvania Power Plants, states, “Polluting facilities like power plants have long been disproportionately located near disadvantaged communities…. Now energy companies in Pennsylvania have begun building natural gas-fired power plants that will reinforce the historic environmental injustice of the state’s existing fossil fuel-fired power plants.” Pennsylvania is just one of many states that follow a similar pattern, but, “Pennsylvania has been ground zero in the controversial and environmentally destructive technique of hydraulic fracturing (or fracking) used to drill for natural gas.” Three key findings of the report itself are as follows:

  • People of color, people living in poverty and recipients of the Supplemental Nutrition Assistance Program (SNAP) disproportionately lived within three miles of existing and proposed power plants.
  • The combination of existing and proposed power plants disproportionately impacts rural lower-income and higher-economic stress areas.
  • Proposed gas plants reinforce overall disparities for communities of color, for lower-income and economically stressed areas and for areas with lower education levels.

Higher Energy Burden

Meanwhile, these customers often experience a higher energy burden than other customers. According to a Union of Concerned Scientists (UCS) blog post comparing electric rates, bills, and burden, “Energy burden is the percent of one’s income you spend on all energy (electricity, heating, gasoline, etc….).” The post further states, “The energy burden on low-income households is real and substantial. It is real in all 50 states and in the District of Columbia.”

New Power Priorities

GreenBiz explains how new energy programs can improve the experience of LMI customers: “[The current power] system historically was designed for universal access, improved reliability, and low cost; society’s new priorities include climate change mitigation, improved health outcomes, resilience in times of natural disaster, energy democracy and customer choice…. New models already are emerging to create and exchange value between LMI customers and utilities.”

The GreenBiz article mentions on-bill financing to pay for energy efficiency improvements, low-cost solar subscriptions to clean solar facilities located in LMI communities, switching customers to lower-cost energy sources, and clean, low-cost “virtual power plants.”

The Natural Resources Defense Council (NRDC) also supports community solar, stating in a blog post, “Solar…eliminates the need to fire up the dirty and pricey power plants that would otherwise handle peak demand – thus saving customers money and significantly reducing pollution levels. In addition, because community solar systems need not be sited on particular rooftops, they can be placed in locations that regularly pull the most electricity from the grid.”

A second USC blog post, offering solutions to the energy burden issue, states, “The potential for LMI households to save some green by investing in energy efficiency is widespread, with cost-effective savings in nearly every county where there is available data.” This post mentions solar panels as a highly desirable solution, though it concedes, “Energy efficiency and solar policy alone won’t solve the issue of energy burden for LMI households, but it will make their energy burden less bad.”

What changes has your utility made recently in its interactions with LMI customers? Please share in the comments.


Karen Marcus's picture

Thank Karen for the Post!

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