Dive Brief:
- Providing programs and funding that ease the energy burden for low- and moderate-income, or LMI communities, requires data to help direct the funds, but that data can be difficult to collect, said panelists at a May 17 summit on clean energy.
- Neighborhoods in major cities fluctuate in median income too often to rely on census data, said Damali Harding, principal and acting U.S. program director at the Regulatory Assistance Project. But LMI communities are sometimes reluctant to report data, and self-reporting can present an additional burden.
- Moderator Sarah Duffy, deputy legal counsel with the Illinois Power Agency, or IPA, suggested the use of broad-based quantitative designations that include mechanisms for granting qualitative exceptions to communities that petition successfully.
Dive Insight:
“Identification of the energy-burdened population is a very big issue right now,” Harding said during an LMI-focused panel at a state-federal summit on clean energy hosted by the Clean Energy States Alliance, U.S. Department of Energy, National Renewable Energy Laboratory, and Lawrence Berkeley National Laboratory.
As electricity prices continue to increase, California is weighing strategies for an income-based monthly fixed charge on electric utility bills that the California Public Utilities Commission estimates would save low-income customers around $10 to $20 a month while raising rates for other income tiers.
However, estimating and verifying income data for customers is a difficult proposition. A presentation from researchers at the University of California, Berkeley, hosted on CPUC’s website, said customers would have an “incentive” to misrepresent income if it goes unverified, while verification could cause a large paperwork burden and privacy concerns.
“Using neighborhood characteristics is lower cost, but has problems,” they wrote. “Census data reveal large income variation within the smallest units provided by the census (i.e. census block groups).”
One option the researchers suggested was setting a default rate for the fixed charge at maximum and allowing customers to report their own verified income in order to bring the charge down.
“Is income verification the right answer?” Harding said. “Should it be a household thing? Because people are reluctant to provide incomes, and in these communities, there are issues like job stability or the people who own the house may not be the person whose name the electricity is in.”
Duffy said that one problem with requiring energy-burdened communities to self-report is the “tension between the need to track and collect a lot of data, and also to not be asking these communities that are constantly having to fill out paperwork, constantly having to apply to things, to fill out five pages of demographic information before they can get the benefit.”
Jocelyn Durkay, manager of regulatory affairs at the Colorado Energy Office, said during a Q&A portion of the panel that while certification requires additional effort, it ensures funds are spent appropriately, while geographic qualifications based on census data can result in benefits going to households they weren’t intended for, in the case of gentrifying communities.
“In Illinois, we have a self-designation process where, if based on our quantitative method, a community was not deemed an environmental justice community, they can petition the IPA and say ‘I didn't exactly meet all of the qualifications, but for these reasons, we think that this geographic area should still be considered an environmental justice area,’” Duffy said.
She said that “broad-based, clear-lined maps and designations” can be augmented with exceptions for those who should qualify for benefits but fall through the cracks.
“I’m aware of programs that have removed the income qualification requirements – for instance, a weatherization assistance program,” said panelist Quinn Parker, CEO of Encolor. “They felt that the level of effort, time and money that was going into verification, and the barrier that's been in front of some folks to participate, made it worth removing. They are willing to take the risk that there are some people taking advantage of the program that maybe shouldn't.”
