Environmental and Energy Study Institute (EESI) held a briefing hosted in coordination with the National Housing Trust and the Natural Resources Defense Council (national partners with the Energy Efficiency for All project) about the costs and consequences of the COVID-19 pandemic and resulting economic downturn for housing and energy services. Panelists explored issues faced locally by communities hard-hit by the dual crises, especially in southern and midwestern regions, including mounting utility bill arrearages; electric, gas and water shutoffs; and evictions. The harmful effects of the crises are distributed unevenly, with unjust burdens crushing low-income, Black, Indigenous, and people-of-color communities.
Speakers discussed national policy solutions that can deliver relief and help communities eager to recover. The Biden-Harris Administration and many in Congress are proposing increases in energy, water, and rental assistance and other provisions that protect against shutoffs and evictions. Panelists had a discussion with participants online about the threats to communities and the different policy solutions already in place—including the CARES Act and the COVID-19 Economic Relief Bill—and those currently being debated, such as President Biden’s American Rescue Plan.
Katrina Metzler, Executive Director, National Energy and Utility Affordability Coalition (NEUAC)
- The Low Income Home Energy Assistance Program (LIHEAP) is a federal block grant established in 1981 to improve energy affordability and prevent or address crisis situations. Congress appropriates about $3.7 billion to LIHEAP annually, enough to serve about six million homes.
- One out of three households helped by LIHEAP went without food for at least one day in the past year, and three out of 10 households had to use the kitchen stove or oven to provide heat. Many people are making decisions between food, utilities, medicine, or other necessities.
- LIHEAP did receive supplemental funding of $900 million in the CARES Act, but emergency contingency funds have not been appropriated to LIHEAP since 2011; such funds would have helped LIHEAP address the current winter storm crisis.
- Metzler compiled data regarding the homeowners that LIHEAP is designed to serve:
- 15 to 20 percent of residential customers are at least 60 days behind on their utility bills.
- Electric and natural gas arrearages were expected to reach $32 billion at the end of 2020, according to the National Energy Assistance Directors Association (NEADA).
- 22 percent of utility customers reported they had reduced or put off expenses for basic needs like food and medicine in order to pay their utility bills.
- 60 percent of K-12 schools reopened virtually for the 2020-2021 school year, and 42 percent of the workforce is working from home, which highlights the need for both broadband and power in homes.
- 43 states and Washington, D.C., have mandatory shutoff moratoria for their utilities, which protects homeowners’ access to energy, but cannot help them eventually pay their utility bills.
- Metzler thinks LIHEAP is the answer to this crisis, as it was originally created to make it easier for households to afford their energy needs. LIHEAP is also the largest provider of weatherization, and can help with energy efficiency by providing better equipment.
- LIHEAP is requesting $10 billion in supplemental funds.
- 50 percent to help arrearages and pay off energy debt for four million households.
- 50 percent to help 7.7 million households stay current on their utility bills.
- LIHEAP compiles one-pagers for each state with how much money was spent and where it was spent.
- Only seven percent of households in Texas were reached by LIHEAP, which is one of the lowest state rates and linked to insufficient funding.
Andreanecia Morris, President, Greater New Orleans Housing Alliance; Executive Director, HousingNOLA
- Housing is central and necessary to opportunity, as zip codes and the affordability of housing are key indicators in health, school quality, job accessibility, and economic mobility.
- Housing inequities are rooted in anti-Black racism: Black and Latinx families have a harder time building wealth since they have been disproportionately denied housing, thus their homeownership rates and net worth lag compared to white families.
- We have not guaranteed housing for all, despite the fact that COVID-19 and other crises require housing (“shelter at home”). This lack of commitment is tied to racial biases.
- Housing subsidies are poorly matched with need. More federal funds are spent on housing subsidies for people who make more than $200,000 a year than are spent on all other subsidy programs combined. Those in lower income brackets receive far less funding in housing subsidies.
- In Louisiana, Hurricane Katrina set the stage for the modern disaster era. Hurricanes and COVID-19 both devastated Lake Charles in 2020 and exacerbated the gentrification and housing crisis there.
- In Louisiana, the rental wage is about $17 per hour and the living wage is estimated to be $23 per hour, but the minimum wage is only $7.25 per hour. A higher minimum wage, like $15 per hour, would allow subsidies to stretch farther and help more people. Subsidies must also be reallocated so they are more effective.
- A new executive order allows the Federal Emergency Management Agency (FEMA) to allocate reimbursable funding to states for housing, which local governments must use for victims of hurricanes, frost, and COVID-19 evictions.
- Disasters will continue to happen because of climate change and systemic racism, so we must guarantee the essentials of housing, power, and water to stabilize renters for the challenges to come.
Tony Reames, Assistant Professor, University of Michigan
- Energy insecurity is not new. In 2015, pre-pandemic, one out of three households faced some sort of energy insecurity, which includes receiving a disconnect notice, keeping one’s home at an unhealthy temperature, or reducing spending on basic necessities due to an energy bill.
- Energy insecurity varies across regions of the United States and across racial groups: 16 percent and 19 percent of Black and Hispanic households, respectively, experienced energy insecurity compared to 9 percent of White households.
- White households consume more energy than houses owned by any other race, so energy efficiency programs often target them. However, when considering energy use intensity (EUI), or energy use per unit area (for example, per square foot), Black and Hispanic homes are the least energy efficient and lose the most money on energy. Energy efficiency programs must target households of color.
- Communities of color and low-income neighborhoods host energy generation plants, are more polluted because of them, and have the least efficient homes, while White households use most of the energy.
- Energy use intensity also varies by region, so energy efficiency programs should be implemented in a place-minded way.
- Access to energy efficiency also varies based on race, class, and place.
- 91 percent of stores in high-income neighborhoods carry more efficient LED light bulbs, compared to 57 percent of stores in low-income neighborhoods. Most stores carry the less efficient incandescent light bulb.
- Incandescent bulbs are also cheaper in low-income neighborhoods, while the price of an LED bulb can be two times what it is in a high-income neighborhood, due to utilities partnering with big-box stores that are not located in low-income communities.
- An energy efficiency “donut hole” exists, in which high-income households can finance their own upgrades, low-income households are eligible for financing programs, but those in the middle cannot access energy efficiency upgrades at all. One in eight (460,000) homes fell into this category in Michigan in 2020.
- There are spatial, racial, and economic disparities in energy efficiency, affordability, and access, which can be solved by targeted, community-based assistance programs.
Lauren Ross, Senior Director for Policy, American Council for an Energy-Efficient Economy (ACEEE)
- Energy burden refers to annual energy bills as a percentage of annual income. Black, Indigenous, and people of color (BIPOC), elderly citizens, and low-income households have the highest energy burdens.
- High energy burdens are not correlated with high or low energy bills, but instead with factors like poor insulation or inefficient HVAC systems, lack of investment, sudden economic hardship, and lack of awareness about energy efficiency.
- High energy burdens are linked to poor indoor air quality, increased respiratory diseases, increased stress, negative impacts on school success, perpetuated cycles of poverty, increased utility disconnections, and increased reliance on payday lending.
- Energy insecurity has been exacerbated by COVID-19: customers owe $40 billion in COVID-19-related debt to utilities; energy moratoria were correlated with reduced COVID-19 infections and deaths.
- The most equitable way to address the climate change crisis is to push energy efficiency for everyone. Energy efficiency retrofits would not only reduce emissions and save customers money, but also improve health and safety, create new retrofit-related jobs, and support housing justice.
- Federal action can be taken to fund workforce training and targeted energy efficiency programs, pair bill assistance with energy efficiency, and encourage states and utilities to provide assistance programs for indebted customers.
- Specific federal recommendations from ACEEE include:
- Increased support for the Weatherization Assistance Program (WAP), which only reaches two percent of households in the United States despite 30 percent being eligible.
- Establish programs like HOPE4HOMES for home energy upgrades and workforce training.
- Fund energy upgrades for low- and moderate-income households that are typically not covered by upgrade programs.
- Support affordable financing for households not covered by grants, like tariffed on-bill financing programs.
- Provide tax incentives for manufacturers to make energy efficiency technology better and more accessible.
After our neighbors in Texas recover from their severe weather and energy impacts, any thoughts about how energy and water efficiency improvements in housing could be part of a policy response to help families better manage extreme cold or hot spells?
- Metzler: I’ve heard the Biden plan characterized as two-part: rescue and recovery. I see energy and water affordability being part of both. In the first part, rescue, we need to address the crisis and ensure people are able to pay their bills and have access to energy and water. Additionally, I would like to see us redefine the energy burden to include the arrearage problem, expand eligibility for LIHEAP if there will be supplemental funds, and talk about housing and utility assistance programs that can provide services together to address the house as a whole.
- Morris: I’m going to continue to beat the drum that we have to guarantee housing. This cascade of crises demands that everyone be housed, and the long-term solution has to be maintaining that system for everyone who needs it, meaning providing power and water too. We have to boldly state our commitment to housing.
- Ross: We need to invest in housing. What we are seeing in Texas now we will likely see in other places. Both heating and cooling are demand surges that can overwhelm the grid. Efficiency through weatherization and home retrofits is a great demand-side solution that saves customers money and helps solve the larger affordability crisis.
How could the federal government be more supportive of state and local housing efficiency efforts?
- Metzler: In the Omnibus package in December, for the first time the federal government implemented a water utility assistance fund. I’m hoping that that can be a model program that we can build upon. We know that recovery happens slowest for the people who are eligible for our LIHEAP programs. To the extent that we can lower their bills and stretch program dollars farther during the crisis makes it easier to help more households.
- Keep flexibility. The thing that I really love about LIHEAP is that it allows states to take a look at the resources that are available to them and their needs and make decisions that are most appropriate for their state and their people. Anything that enhances flexibility is a good idea.
- Morris: We have to look at the definition of housing security. We use a very outdated rule that says you should not spend more than 30 percent of your gross income on your total housing cost. It is not 30 percent for someone making $7.25 an hour. We also need to talk about the fact that when we do these calculations, we use outdated, substandard, inefficient utility calculations that do not allow for you to pay for your utilities under that 30 percent cap. That’s the third piece: we have to actually abide by these rules. We are creating housing that violates the 30 percent rule and setting people up for failure. When these people fail, we reinforce negative racialized stereotypes around subsidized housing.
- Ross: We need to think about how to integrate housing, energy assistance, energy efficiency, and weatherization. These are big problems that need big solutions and joint programs. On the point of keeping flexibility, in states and localities, there is a strong precedent for administering grants for upgrading housing and for weatherization funds. We should look to them for innovation and how to integrate programs more efficiently to think big.
Do you have any specific examples of how state and local efforts leverage financing or private-sector partners to deliver more benefits and reach more families in their communities?
- Ross: In a lot of states, federal weatherization funding is coupled with utility rate payer programs. A lot of states have a one-stop shop model set up so that low-income residents can go there for assistance, not knowing behind the scenes where all the funding is coming from. That’s one great model of how different funds are leveraged, with states and localities also putting into that pot.
- We need more rural investment. Rural households suffer from higher energy burdens and have less access to rate-payer energy efficiency programs than households in urban areas. One model is tariffed on-bill financing where the utility invests in energy efficiency, and that investment is paid back by the customer while the customer still gets savings.
- Morris: That’s an easy one: no. In Louisiana, we have had a few interesting programs in energy efficiency, including solar panel tax credits, but these programs tend to aim themselves at the wealthy, and have since been disincentivized. We need the community to stand up and demand better from our regulators. Texas right now is the worst-case scenario of when you pair deregulation with an attitude of “people need to figure it out for themselves.” This can lead to not weatherizing equipment and not requiring it to be ready for disasters. The gulf states are ground zero for climate change. Communities that understand the stakes and know how to vote their interests is the only way we will see the kind of change we need.
- Metzler: In our positions, we have probably all dealt with a lot of judgement for the people we serve. I would encourage you to think of it this way: desperate people do desperate things to protect their families and their kids. We can provide a lifeline for those families to help them get back on their feet.
- Our local providers are the maestros who know what pots of money are available to serve all the needs of a family. This is a question best answered by a local provider. LIHEAP is there to fill in gaps and make sure they have flexible funding for housing and energy efficiency available.
- LIHEAP is the largest provider of weatherization and energy efficiency services. That demonstrates an excellent public-private partnership, with LIHEAP hiring contractors to carry out services. I would like to see LIHEAP funded robustly to be a part of the recovery efforts.