Two Studies Examine Low-Income Energy Burdens, Cost

The growth in low-income consumers' energy bills has considerably exceeded growth in their incomes over the last six years. That's the conclusion of a new study by Dr. Meg Power of Economic Opportunity Studies. Titled "Low-Income Consumers' 2003 and FY 2004 Energy Bills and Energy Savings," the study shows that the 25 percent  of U.S. households with the lowest incomes will spend  $1,335, or 16.7 percent  of their entire annual income on residential energy during the current federal fiscal year.  In 1997, these households spent $1,150 or 14.7 percent.

Only those households whose homes have been weatherized by the Department of Energy's Weatherization Assistance Program or have received the same kind of efficiency upgrades, are, on average, able to buy as much energy as six years ago without spending a higher share of their household income, the study says.  For weatherized households, bills in FY 2004 will average $324 less for gas-heated homes and $347 less for homes using heating oil or propane.

Another recent study by Dr. Power is titled "The Impact of Utility Retail Competition on Low-Income Consumers in Texas, Massachusetts, Georgia, New York and Ohio." It examined the effects of energy markets restructuring on low-income consumers in Massachusetts, Ohio, New York, Georgia and Texas as of 2003, addressing whether they were better or worse off with respect to their energy burden, as compared with other residential customers and as compared with other low-income groups.

For each state, the study examined changes in the cost of energy to the poor and to other residential consumers after the transition to competition began. It also reviewed energy affordability programs in each state, such as public benefit or system benefit funds, discounts or other assistance programs, state changes to federal LIHEAP or weatherization and/or other programs either new or pre- existing, to understand their impact in securing the potential advantages of competition or in offering compensation for adverse consequences. It also examined the role of any changes in regulation or practices in the delivery of utility services that may have been designed to protect customers against new perils related to market and regulatory change.

For more information, contact Dr. Meg Power, at 202-628- 4900, or megpower@opportunitystudies.org

Page Last Updated: March 9, 2006