The utility bill burden
Energy burden particularly impacts people in Black and Latinx communities, especially in areas of Milwaukee that were historically redlined. Energy Burden is the percentage of income spent on utility bills. While there are some programs to assist low income residents, they are often inadequate and inaccessible.
The COVID-19 pandemic has only accentuated the problems and disparities that exist. While each winter there is a utility shutoff moratorium in Wisconsin from November 1 - April 15, it was extended throughout 2020. However, utility bills did not go away, and for many piled up higher and came due in 2021 with little relief. Bills have been even higher this past winter with hikes in gas rates, accentuating the inequities that already exist. Solutions are badly needed if we are to have energy justice.
Focus on Energy
Since 1999, Wisconsin has had a Focus on Energy program that provides financial incentives to utility customers in making smart energy efficiency and clean energy decisions that will lower utility bills and reduce energy use – and hence greenhouse gas emissions as well. Funded by the utilities, Focus has generated over $4 in benefits for each $1 invested, and from that standpoint, has been a great success.
However, Focus on Energy currently tends to constrain who benefits from it. First, information about Focus is not always readily accessible by, or useful to, all communities. Focus is most useful when making major building improvements, and when customers are looking for rebate opportunities or the contractor informs them about Focus’ benefits. Generally, those who make major improvements are already liable to be better off financially.
In addition, building owners, whether residential or business, are eligible to receive greater benefits from Focus. Renters can currently only benefit in smaller ways. However, since generally renters pay the utilities, there is little benefit to building owners to make the requisite improvements. While not universally true, a large proportion of renters are students and low or fixed-income individuals or families.
But not a focus on people
Focus eligibility often stands in stark contrast to the need. As a 2021 Energy Burden Report showed, those most in need of support to lower their utility bills have barriers that prevent them from accessing Focus on Energy and some of the programs it provides. Utilities, as regulated entities in the public interest, are supposed to serve their customers first. Yet, the very program they (and ultimately, we as customers) pay into, does not help those who may be harmed by not being able to pay those bills.
A major roadblock to accessing Focus on Energy benefits is that making significant home energy improvements usually requires payment up front, either from personal assets, or by obtaining a loan. Most people who are already experiencing a high energy burden do not have the money to pay for the work, nor in most cases, would they qualify for a loan, leaving them unable to benefit from Focus programs.
Environmental justice, energy justice, energy democracy – these are all terms that come out of a recognition that we have major disparities in risks and burdens that are disproportionately borne by people of color. To provide energy equity in our democracy and assure that everyone has access to fundamental energy needs and the ability to thrive and succeed, means we must ensure that energy bills are affordable and do not pose an undue burden.
Opportunity for change
Every four years, the Focus on Energy program undergoes a reevaluation conducted by the Public Service Commission (PSC) to determine funding priorities and programs, and 2022 is such a year. There are three phases to this process, and in the first phase, they will take a high-level view of Focus’s extent and reach. The PSC is looking for input into this process, providing an opportunity to address inequities in our energy systems. To take action and provide a comment to the PSC, click sc.org/FocusOnEnergy.
The scope of the review is on energy efficiency and renewable energy programs, and states that “The commission shall give priority to programs that moderate the growth in electric and natural gas demand and usage, facilitate markets and assist market providers to achieve higher levels of energy efficiency, promote energy reliability and adequacy, avoid adverse environmental impacts from the use of energy, and promote rural economic development.”
A state statute also requires the Commission to ensure “that customers throughout the state have an equivalent opportunity to receive the benefits of” statewide energy efficiency and renewable resource programs. Clearly, this would indicate that disparities in circumstances should be accounted for, but in the past, this has primarily been applied geographically to both business and residential customers, and less to fully addressing income constraints. To create some level of equity and work to alleviate energy burdens, this issue must be clearly addressed as well.
What Focus solutions are needed
The memo for Phase 1 of this review of Focus on Energy included many improvements to the program that we are excited to see. In addition, here are steps that PSC should take:
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Align Focus on Energy’s goals to a much more holistic measure of success, in which energy savings, carbon reduction, societal benefits of carbon reduction (including health impacts) and energy efficiency, and decreased energy burden disparities are all considered key performance indicators for the program. Related - expand the discussion of “equity” so it is not simply a political buzzword.
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Equity should be defined as “vertical equity” - those with greater needs deserve greater spending
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Equity has two environmental components: equitable distribution of environmental amenities and equitable protection from environmental harms.
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Prioritize expanding programs for low income customers while also addressing energy burden through pilot programs. These two items are not in conflict and should be implemented. The Phase 1 Memo acknowledges that there should be “some form” of income-qualified programs; there should be additional guidance on what they should entail.
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Consider renters in programming -- especially in low income and income qualified programming. Renters often face additional barriers to accessing programs to decrease energy bills and to make energy improvements.
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The memo refers to targeting based on high use. That is reasonable, but for low income programs, PSC should include a carve-out for multi-family dwellings, which are disproportionately occupied by low-income households and often have a high intensity of use due to inefficiencies.
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The definition of low income should remain at 60% of state median income. Tier 2 programs for those at 60-80% of the state median income should be considered; these Tier 2 programs should not count toward low income Key Performance Indicators.
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Implement another low-income pilot where targeting is based on payment-troubled status (e.g., high arrears, broken payment plan, disconnection or multiple disconnect notices).
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When identifying a formal framework for collaboration with utilities, continue to encourage utilities to voluntarily participate in additional Focus on Energy programs and to implement additional programs above and beyond Focus on Energy that focus on low-income customers, high energy burden populations, utility debt forgiveness and carbon emission reductions.
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Prioritize effective outreach about Focus on Energy opportunities to those most impacted. Work with trusted neighborhood organizations. Streamline the application process so that accessing Focus on Energy’s programs is more accessible -- especially for renters and residential applicants. The proposed community outreach pilot program is a good step in this direction.
Take action
There are three phases in the PSC review process, the Phase I overview where they are accepting comments from March 7 – 31, Phase II comments from May 30 – June 17, and Phase III from August 15 – September 2.
Please advocate for just Focus on Energy programming. Not only is it an equity issue, but reducing energy use or installing solar will help reduce carbon emissions. To take action and provide a comment to the PSC, click sc.org/FocusOnEnergy.