Climate Change and Energy Insecurity: A Growing Need for Policy Intervention

INTRODUCTION

Every month, millions of U.S. households face decisions about which expenses they can afford, and which they cannot. People are often forced to decide whether they should pay their rent or mortgage, feed their family, or seek medical care. ¹ A widespread, but under-appreciated, concern that many households experience is their (in)ability to afford their basic energy needs, a concept that has been defined as “energy (in)security.” ² Energy insecurity not only places a financial burden on millions of Americans, but it can also lead households to engage in unsafe behavior (e.g., using stoves or space heaters, which are the leading causes of domestic home fires and related deaths ³ ) and pursue risky financial decisions (e.g., taking out high-interest payday loans ⁴ ). In some circumstances, energy insecurity is also associated with mental (e.g., stress, disrupted sleep, and depression ² ) and physical health impacts (e.g., asthma, upper respiratory infections, and premature death). ^{5 , 6 , 7}

The concept of energy insecurity is related to energy justice, ⁸ which argues that policymakers should ensure that everyone has access to safe, reliable, affordable, sustainable, and modern energy. ⁹ When a household is energy insecure, it lacks either affordable and/or reliable energy. Other related concepts to energy insecurity are energy burden—or the proportion of income spent on energy—and energy poverty, both of which have been studied extensively in European contexts. ^{10 , 11} Unlike in the United States, the U.K. government has differentiated energy poverty from general poverty, ^{12 , 13} considering a household energy poor if their energy costs are above the national median and if the household spent an amount on energy, such that their remaining income would place them below the poverty line. ¹⁴

Climate change is likely to exacerbate household energy insecurity. Higher incidence of extreme temperatures will place further burdens on those experiencing energy insecurity and may force other households to confront it as well. With much of the United States expected to experience more days of extreme heat, ¹⁵ the problem of energy insecurity will deepen. Building resiliency to address these impacts requires a rethinking of current programs and policies to ensure that vulnerable households, especially communities of color and low-income populations who have higher residential energy usage, ¹⁶ more often live in dilapidated or inefficient housing, ¹⁷ and experience higher rates of energy insecurity, ¹⁸ are actively considered and cared for.

In this commentary, we share new survey data revealing that household energy insecurity is already widespread among low-income U.S. households and argue that climate change will likely worsen this material hardship. We posit that current state-level policies and federal-level programs are insufficient to alleviate or protect vulnerable communities from climate-induced energy insecurity. For these reasons, we recommend that state governments broaden disconnection protections and moratoria to all vulnerable groups and focus on expanding these protections to better cover the hot summer months. At the federal level, Congress should provide additional funding for both bill assistance and weatherization programs; however, they should prioritize efforts to escalate the weatherization of low-income homes to reduce household carbon emissions and the cost of energy bills, thus providing a longer-term solution for vulnerable households. ¹⁹

HOUSEHOLD ENERGY INSECURITY IN THE UNITED STATES

Household energy insecurity is a prevalent problem in the United States. Every four years, the U.S. Energy Information Administration administers the Residential Energy Consumption Survey, which asks Americans about their energy use and bills. According to the 2015 survey, the most recent version available, ∼14 million households had unpaid energy utility bills, 17 million households received a disconnection notice from their utility provider, and 2 million households had their electricity service disconnected by their utility. ²⁰

The survey research reported in the article was approved by the Indiana University Office of Research Compliance, under protocol number 2004296209. In accordance with this protocol, informed consent was provided by all study participants. Recent survey data collected by the authors further elucidate the extent of household energy insecurity in the United States among low-income Americans. ²³ As part of a nationally representative survey fielded in May 2020 to ∼2,000 households with incomes at or below 200% of the federal poverty line, we found that nearly 4.7 million households (or about 24 million individuals) could not pay an energy bill in at least one month of the previous year. In addition, 4.8 million households received a disconnection notice from their utility, and ∼2 million households lost service due to nonpayment. ¹¹

During the early months of the coronavirus disease pandemic, we found even higher rates of energy insecurity. Between April/May 2020 and August 2020, 21% of respondents (representing ∼3.8 million low-income households) indicated that there was at least one month during this period in which their household could not afford to pay their bill; 15% of respondents (representing about 2.8 million households) indicated that they had received a disconnection notice, and 6% (representing about 1.2 million households) noted that they had their service shutoff. ²¹

Past research has identified race- and income-based disparities in household energy insecurity, ^{22 , 23 , 24} and we find similar results, even among low-income households. As shown in Figure 1, between April/May and August 2020, Black and Hispanic households were about twice as likely as white households to be unable to pay an energy bill. Moreover, Black and Hispanic households were, respectively, two and three times more likely to receive a disconnection notice and three and eight times more likely to be disconnected from the electric grid due to lack of payment.

OPEN IN VIEWER

FIG. 1.

Energy insecurity by race, between May and August 2020.

CLIMATE CHANGE WILL EXACERBATE ENERGY INSECURITY

According to the most recent National Climate Assessment, the average U.S. temperature is projected to rise by at least 2.5 degrees Fahrenheit by 2050 as a direct result of increases in greenhouse gas concentrations. ²⁵ In addition, researchers predict that the United States will experience 20–30 more days over 90 degrees Fahrenheit by 2050, with increases of ∼40–50 days in the Southeast. ²⁶ Although this increase in average and daily temperature extremes will contribute to fewer cold spells (6 days with minimum temperatures below the 10th percentile), especially in Alaska and the Northeast, it will result in more severe and frequent heat waves (6 days with maximum temperatures above the 90th percentile), particularly in the Southeast, Southwest, and Alaska.

Studies reveal that domestic heat waves are already occurring more often than in previous decades due to climate change, especially in cities. In the 2010s, metropolitan areas averaged six heat waves per year, an increase from the 1960s average of two times per year. ²⁷ In 2020, many cities endured long stretches of record-breaking heat due to the urban heat island effect—when highly urbanized areas endure higher temperatures as compared with suburban and rural locations because heat is more easily absorbed and emitted by buildings and asphalt. ²⁸ For example, Phoenix, Arizona broke several heat-related records in 2020, experiencing more than 145 days above 100 degrees, 15 days above 115 degrees, and ∼300 recorded heat-related deaths. ²⁹

As highly populated regions of the United States face increasing exposure to extreme heat, we not only expect the energy insecure population to grow but also expect the potential adverse consequences to worsen. Research has documented that exposure to extreme temperatures, especially heat, can compromise the body's ability to regulate its internal temperature. ³⁰ Therefore, as temperatures rise, those households with access to air conditioning or fans will face higher energy costs, ³¹ whereas other households that cannot afford larger energy bills may decide to forgo air conditioning or fans to limit their expenses. ³² Those households that cannot maintain comfortable temperatures are more likely to experience exposure to extreme heat, which can lead to illness, including heat cramps, heat exhaustion, and heatstroke, and can also aggravate preexisting conditions, such as cardiovascular, kidney, and respiratory diseases. ²⁵ These risks affect energy insecure households, people of color, elderly individuals, those living in public housing, in urban areas, and in homes without air conditioning more often. ^{33 , 34 , 35 , 36}

In some circumstances, exposure to extreme heat is also correlated with increased hospital admissions and excess deaths. ³⁷ Recent research suggests that we do not have an accurate estimate of the number of historical weather-related deaths in the United States, especially as it pertains to heatstroke or heat exhaustion. ³⁸ According to the Centers for Disease Control and Prevention (CDC), an estimated 65,000 people visit the emergency room for acute heat illnesses annually, with 618 cases of premature mortality documented every year. ³⁹ However, the CDC (2016) argues that the number of deaths is underestimated because extreme heat is often not identified by a medical examiner as the primary cause of death, and the estimate is closer to 5,600 each year. ⁴⁵

In sum, as the effects of climate change worsen, especially increasing rates of extreme heat events, households that cannot afford to keep their homes at comfortable temperatures as well as those already experiencing material hardships, such as preexisting medical conditions, will likely experience the brunt of domestic energy insecurity and the health consequences will likely be severe. ⁴⁰

POLICY DISCUSSION

To address the growing issue of energy insecurity, federal and state government officials need to consider policies that address the scope of the problem and that better align with the mounting health risks posed by climate change. Currently, there is no federal policy that protects vulnerable customers from utility disconnections. State governments have enacted policies, but these vary considerably in design and reach, and collectively provide only a patchwork of protection. ^{41 , 42}

State disconnection protections fall into four general categories: vulnerable populations, procedures regarding notification, financial considerations, and extreme temperatures. ⁴³ Regarding vulnerable populations, all but a handful of states limit the shutoff of energy services (usually electricity and natural gas) for customers with medical conditions; whereas protection for low-income populations, elderly customers, households with young children, or people with disabilities is less common. Importantly, the burden of documenting eligibility for these protections generally falls on the customer. Moreover, state policies vary in the type of notification (e.g., written, telephone, in-person) that they require of utilities before discontinuing services as well as in provisions that may require utilities to offer payment plans for customers in arrears before ending their service.

Of most relevance for this commentary, states have adopted two common approaches with respect to extreme temperatures: (1) date-based, such that utilities are limited from disconnecting customers during certain times of the year; and (2) temperature-based, which impose similar restrictions on disconnections when temperatures are above or below a defined threshold. In some instances, these protections apply to all users, whereas in others they are limited to specific groups (e.g., low-income, elderly). Importantly, as illustrated in Figure 2, 44 states have cold weather-related protections, whereas just 16 have protections for hot weather.

OPEN IN VIEWER

FIG. 2.

Map of Weather-Related Disconnection Protections. Source: Data was collected using regulatory and legal code from all 50 states and Washington, D.C.

Given expectations of more excessive heat due to climate change, these policies are not aligned with future risks of heat-related illness and mortality. ^{44 , 45} This is a major shortcoming of existing protections that states should rectify immediately.

Moreover, the two federal programs that aim at alleviating energy insecurity—the Low Income Home Energy Assistance Program (LIHEAP) and the Weatherization Assistance Program (WAP)—are historically underfunded. The WAP, which aims at reducing energy costs for low-income households through energy efficiency upgrades, only serves 35,000 households each year. ⁴⁶ LIHEAP, which helps low-income households pay their energy bills, can only provide bill assistance for ∼22% of the income-eligible population. ⁴⁷ LIHEAP funds are so limited that they tend to focus on helping people pay for their heating rather than cooling needs because they are often exhausted by the spring and summer months. ⁵¹ In sum, current levels of government assistance are inadequate and electricity disconnection protection across the country is uneven, which leaves millions of Americans in potentially precarious circumstances. ⁴⁸

POLICY RECOMMENDATIONS

Without policy interventions to help U.S. households improve their home's energy efficiency, pay their utility bills, and protect them from utility disconnections, millions of vulnerable Americans will face severe risks to their health and well-being as the effects of climate change intensify. There are several steps that government officials can take, in the near and long term, to improve the policies and programs aimed at helping energy insecure households withstand or adapt, recover from, and be resilient to rising residential energy costs, declining economic security, and increasing climate change-induced threats.

In the near term, the federal government should provide additional funding to both LIHEAP and WAP. Appropriating more funds to LIHEAP would help customers with near-term concerns, such as paying their energy bills, avoiding disconnection, and relieving debt accrual. Importantly, providing more funding to bill assistance could allow state program offices to remain open through the hot summer months and help low-income households cool their homes and fix or replace broken air-conditioning equipment. Simultaneously, the federal government should also prioritize funding WAP to help households achieve longer-term goals, including improving deficient housing stock, reducing energy use and carbon emissions, and increasing energy bill affordability. Funding WAP at higher levels could alleviate strains on LIHEAP and other bill assistance programs and may also translate to the availability of more local energy efficiency jobs. In addition, the federal government should not only appropriate higher levels of funding for both the LIHEAP and WAP programs every year, but they should also (1) coordinate efforts across programs to improve efficiency and implementation of both programs; (2) target the most vulnerable populations in the United States ^{49 , 50} ; and (3) when possible, reduce hurdles that applicants face to gain access to both LIHEAP and WAP ⁵¹ as well as allow local agencies the flexibility to implement these programs to meet their specific community's needs. ⁵²

In the long term, state governments should carefully reconsider their current disconnection policies and make reforms to broaden their coverage and to reduce the administrative burdens that households need to overcome to meet eligibility requirements. For example, all states should consider implementing date-based, in addition to temperature-based, protection so as to standardize and simplify these policies for customers. States should also consider indefinite and absolute protection for certain groups, including those who require the use of an electronic medical device. In particular, it is critical that these reforms cover all low-income households and types of utilities so that protection is not contingent on where one lives or who their energy is provided by. In anticipation of rising temperatures because of climate change, most states need to update their policies so that they include heat-related protection. For most parts of the country, climate change will bring more days with excessive heat, and utility disconnection policies should reflect these changing circumstances.

When determining how to improve household energy and climate resiliency, federal and state governments as well as electric utilities must consider energy insecurity as a tangible material hardship that low-income families face and therefore an important aspect of general household and societal health and well-being. ⁵³ Once they do, federal and state governments should work together with public utility commissions and electric utilities to strategically generate and implement a comprehensive set of programs and policy interventions to help households experiencing energy insecurity. Building resiliency to the effects of climate change requires addressing the unequal impacts that it will bring, including the increasing costs of energy that are likely to result.

As federal, state, and local governments address the problem of energy insecurity, they may find more traction if they address it through a coordinated approach that considers its inter-related challenges with housing, education, and health. Energy insecurity is a complex problem that involves more than just whether a household has enough money to pay its energy bill; it correlates with housing options and conditions, employment opportunities, and mental and physical health, among other important dimensions. Therefore, a comprehensive approach that addresses a range of personal and structural challenges faced by vulnerable households is most likely to generate durable outcomes. Such efforts have the potential to help households build resiliency to the looming and growing threats of climate change.