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Cleveland's energy burden on low-income households

David Beach  |  04/28/16 @ 12:00pm  |  Posted in Clean energy

Cleveland ranks among the worst 10 cities in the nation in the energy cost burden on low-income and minority households. Energy efficiency can help reduce this disproportionate burden and put more dollars into the local economy.

Energy burden<br />Cleveland ranks high in the energy burden on low-income and African-American households. (Source: Lifting the High Energy Burdens in America's Largest Cities: How Energy Efficiency Can Improve Low-Income and Underserved Communities, American Council for an Energy-Efficient Economy, 2016)

It’s not surprising that low-income people typically pay a larger portion of their income for basic necessities, such as energy, than rich people. But a new study reveals that Cleveland is among U.S. cities where this energy cost burden is highest.

The study by the American Council for an Energy-Efficient Economy (ACEEE) and the Energy Efficiency for All (EEFA) coalition ranks cities according to the percent of household income paid for utility bills. Cleveland ranks among the 10 worst cities for low-income households. The 10 cities include Memphis (13.2 percent of income for energy), 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). Cleveland also is one of the most energy-burdened cities for African-American households.

On average, low-income households in the U.S. pay 7.2 percent of household income on utilities -- more than three times the amount that higher income households pay (2.3 percent).

"We found that the overwhelming majority of low-income and households of color in major U.S. cities experienced higher energy burdens when compared to the average household in the same city,” says lead study author Ariel Drehobl of ACEEE. “Families who face higher energy burdens experience many negative long-term effects on their health and well-being. These families are at greater risk for respiratory diseases and increased stress, and they can experience increased economic hardship and difficulty in moving out of poverty."

Not only do low-income families pay disproportionately more, but it’s harder for them to reduce their energy bills. “These families often live in older, less efficient housing stock, which means that their homes require more energy for heating and cooling than newer, more efficient housing,” the study says. “Due to lack of savings, disposable income, and access to credit, low-income households also have fewer choices in regard to housing options, with many low-income families living in units with structural deficiencies that can make energy retrofits not viable. These families also experience greater barriers to upgrading housing stock with traditional efficiency measures, especially in multifamily buildings where the majority of low-income residents are renters.”

If low-income housing stock were brought up to the efficiency level of the average U.S. home, this would eliminate 35 percent of the average low-income energy burden of low-income households, the study found.

This will require increased investment in energy efficiency programs in underserved communities. Tragically, Ohio is moving in the opposite direction. In 2008, the state enacted a popular, bipartisan energy policy that required utilities to increase energy efficiency (and also renewable energy) programs. However, utilities such as FirstEnergy lobbied hard to roll back the requirements. Now the Ohio Senate is considering a bill (SB 320) to extend the the rollback another three years.

The ACEEE also recommends low-cost ways for states to reduce low-income households' energy burden by increasing energy efficiency programs as part of complying with EPA's Clean Power Plan to limit power plant carbon pollution. However, Ohio has chosen to fight the Clean Power plan in court rather than work proactively to transition to a clean energy future.

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