Understanding Energy Burden
by Sharon Phillip
Have you heard of the phrase "high energy burden" and wondered what it meant? Let's break down what that means. The term "energy burden" refers to the percentage of household income we spend on energy-related expenses, including electricity, heating, and cooling per month. This means that families with high energy burdens face a more significant financial strain, often resulting in families making difficult choices, such as deciding between paying for energy or other necessities like food or medicine.
According to published reports by the American Council for an Energy-Efficient Economy (ACEEE), low-wage households in the United States spend an average of 7.2% of their income on energy expenses, with non-low-wage homes spending only 3.5%. This means that low-wage households are spending more than twice as much of their income on energy expenses, putting them at higher risk for energy insecurity and financial instability.
Did you know that Mississippi, Alabama, and Georgia are among the poorest states in the nation, yet they have some of the highest energy burdens? In 2018, ACEEE reported the average energy burden for low-wage families as 4.7%, more than double the national average. In 2021 the average median energy burden for Georgia was 4.1%, with low-wage household carrying an average of 9.6%. And for Alabama, it was 4.3%, with a median of 10.1%. Many of these are black and brown communities. These numbers are staggering.
A key driver of the high energy burden for low-wage households is often the poor energy efficiency of their homes. Many communities are made up of older homes that are poorly insulated, have outdated heating and cooling systems, and lack modern energy-saving appliances. These homes require more energy to maintain a comfortable living temperature and are likely more expensive to heat and cool.
While solutions like insulation, weatherization, and upgrades to heating and cooling systems can help alleviate the energy burden for low-wage households, they will not address the issues of rising utility costs and frequent rate hikes by companies like Southern Company and their affiliates (Mississippi, Alabama, and Georgia Power).
Recently, Georgia Power was approved to pass 100% of its fuel costs onto its customers. That equals about $16 per month for households that use 1000 kilowatts of energy. Mississippi Power made a similar request, but the decision was deferred for a later time by the Mississippi Public Service Commission. In Alabama, more than 700k residents live below the federal poverty line, yet they rank 3rd amongst the highest utility bills in the nation. Southern Company's rate hikes and added fees are part of a system that already takes advantage of the most vulnerable. They add to the financial instability and health of low-wage households who cannot afford to heat or cool their homes properly. Isn't it time Southern Company put people before profit?
Later this month Arm in Arm, and allies from across the southeast and the nation will gather at Southern Company headquarters in Atlanta to share our stories of high energy burden and the affects of their continued rate hikes. Now you too can share your stories with local news agencies. Visit bit.ly/SignTheDemands and select "Letter to Editor" to get started.