WEBINAR SERIES. Energy Affordability in the Southeast: The Energy Efficiency Opportunity. April 28, 2016
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1 WEBINAR SERIES Energy Affordability in the Southeast: The Energy Efficiency Opportunity April 28, 2016 Southeast Energy Efficiency Alliance 1
2 SEEA Serves the Southeast The Southeast Energy Efficiency Alliance (SEEA) promotes energy efficiency as a catalyst for economic growth, workforce development and energy security. We do this through collaborative public policy, thought leadership, outreach programs, and technical advisory activities. Regional Energy Efficiency Organization Eleven-state footprint Non-profit, non-partisan Southeast Energy Efficiency Alliance 2
3 Today s Webinar ACEEE Energy Affordability Research Context and Findings SEEA Low-Income Utility Program Assessment Background and Results Preview Questions & Answers Southeast Energy Efficiency Alliance 3
4 Our Presenters Lauren Ross Manager, Local Policy Ariel Drehobl Manager, Local Policy Abby Fox Policy Manager Southeast Energy Efficiency Alliance 4
5 Opportunities for Improving Energy Efficiency in Low- Income Communities: Research and Resources Thursday, April 28, 2016 Ariel Drehobl Lauren Ross 5
6 American Council for an Energy-Efficient Economy (ACEEE) 35 year old, nonprofit 501(c)(3) dedicated to advancing energy efficiency in the United States through research, policy, and technical assistance. Focus on end-use efficiency in Industry, Buildings and Equipment, Utilities & Transportation; Economic Analysis; Behavior; Finance. Policy Program working at national, state, and local levels, some international work 6
7 Energy efficiency Why Energy Efficiency? Is the cheapest, lowest risk energy resource Creates jobs and avoids price volatility Helps make energy more affordable for low-income households Provides benefits beyond energy savings (e.g. health) Acts as a community resiliency strategy 7
8 ACEEE Resources Building Better Energy Efficiency Programs for Low-Income Households aceee.org/research-report/a1601 Lifting the High Energy Burden in America s Largest Cities: How Energy Efficiency Can Improve Low Income and Underserved Communities aceee.org/research-report/u1602 Low-Income Energy Efficiency Programs: Best Practices and Clean Power Plan Compliance Clean Power Plan Opportunities for Energy Efficiency in Affordable Housing: A Primer for the Affordable Housing Community energyefficiencyforall.org/sites/default/files/cppbrief.pdf Clean Power Plan Resources Page aceee.org/topics/clean-power-plan 8
9 Energy Affordability in the Southeast: The Energy Efficiency Opportunity Thursday, April 28, 2016 Ariel Drehobl Lauren Ross 9
10 What is energy burden? - The proportion of total household income that goes towards home energy bills, which includes electricity, natural gas, and other heating fuels. 10
11 How does energy burden impact families? 11
12 Drivers of household energy burden Type of driver Examples Inefficient and/or poorly maintained HVAC systems Heating system and fuel type Physical Poor insulation, leaky roofs, and inadequate air sealing Inefficient large-scale appliances (e.g., refrigerators, dishwashers) and lighting sources Weather extremes that raise the need for heating and cooling Chronic economic hardship due to persistent low income Economic Policy Behavioral Sudden economic hardship (e.g., severe health event or unemployment) Inability or difficulty affording the up-front costs of energy efficiency investments Insufficient or inaccessible policies and programs for bill assistance, weatherization, and energy efficiency for low-income households Certain utility rate design practices, such as high customer fixed charges, that limit the ability of customers to respond to high bills through energy efficiency or conservation Lack of access to information about bill assistance or energy efficiency programs Lack of knowledge about energy conservation measures Increased energy use due to age or disability 12
13 How we measured energy burden How to calculate energy burden Home Energy Burden = Total energy utility spending Total gross household income Households included if: Pay for their electricity Pay for their main heating fuel Report a positive household income Four main subgroups: 1. Low-income (80% AMI) 2. Communities of color (Black and Latino) 3. Low-income multifamily (80% AMI and reside in 5+ units building) 4. Renters Trends by region: Northeast Southeast South Central Southwest Midwest Northwest California 13
14 Energy burdens in US cities 14
15 National energy burden trends (in black) and Southeast energy burden trends (in blue) Household type Low-income ( 80% AMI) Median annual income $24,998 ($23,357) Median size of unit (square feet) 1,200 (1,250) Median annual utility spending $1,692 ($1,776) Median annual utility costs per square foot $1.41 ($1.42) Median energy burden 7.2% (8.2%) Income type Building ownership Non-lowincome Low-income multifamily ( 80% AMI) Non-lowincome multifamily Renters Owners $90,000 ($79,997) $21,996 ($2,0180) $71,982 ($62,166) $34,972 ($31,000) $68,000 ($59,769) 1,800 (1,800) 800 (900) 950 (1000) 1,000 (1,000) 1,850 (1,820) $2,112 ($2,136) $1,032 ($1,188) $1,104 ($1,200) $1,404 ($1,560) $2,172 ($2,160) $1.17 ($1.19) $1.29 ($1.32) $1.16 ($1.20) $1.40 ($1.56) $1.17 ($1.19) 2.3% (2.5%) 5.0% (6.2%) 1.5% (1.9%) 4.0% (4.8%) 3.3% (3.7%) White $58,000 ($53,000) 1,600 (1,650) $1,956 ($1,968) $1.22 ($1.19) 3.3% (3.6%) Head-of-household race African- American $34,494 ($32,000) 1,290 (1,300) $1,920 ($2,004) $1.49 ($1.54) 5.4% (6.0%) Latino $39,994 ($40,000) 1,200 (1,325) $1,704 ($1,824) $1.42 ($1.38) 4.1% (4.4%) All households All SE households N/A $53,988 ($47,996) 1,573 (1,600) $1,932 ($1,980) $1.23 ($1.24) 3.5% (4.0%) Note: Southeast numbers in blue are not found in the original report. Please contact ACEEE for the numbers and proper citations if interested. 15
16 Memphis Birmingham Atlanta New Orleans Providence Pittsburgh Dallas Philadelphia Kansas City Cleveland Cincinnati St. Louis Hartford Columbus Fort Worth Detroit Phoenix Charlotte San Antonio Indianapolis Jacksonville Louisville Orlando Virgina Beach Oklahoma City Tampa Baltimore Milwaukee Houston New York City Chicago Boston Denver Richmond Nashville Miami Las Vegas Washington, DC Riverside Austin Sacramento Portland Minneapolis Los Angeles Seattle San Diego San Jose San Francisco Energy burden Median energy of low-income households compared to the overall median for each city 14% 12% 10% 8% 6% 4% 2% 0% Low-income median energy burden Metro area median energy burden Note: Stars indicate cities in the Southeast 16
17 Highest energy burdens All households Low-income households Low-income multifamily households African- American households Latino households Renting households Memphis (6.2%) Birmingham (5.3%) New Orleans (5.3%) Atlanta (5.0%) Providence (4.7%) Pittsburgh (4.5%) Kansas City (4.5%) Fort Worth (4.4%) Cincinnati (4.3%) Dallas (4.3%) Memphis (13.2%) Birmingham (10.9%) Atlanta (10.2%) New Orleans (9.8%) Providence (9.5%) Pittsburgh (9.4%) Dallas (8.8%) Philadelphia (8.8%) Kansas City (8.5%) Cleveland (8.5%) Memphis (10.9%) Birmingham (8.7%) Atlanta (8.3%) Providence (7.1%) Pittsburgh (7.1%) New Orleans (6.9%) Columbus (6.5%) Dallas (6.5%) Indianapolis (6.5%) Kansas City (6.3%) Memphis (9.7%) Pittsburgh (8.3%) New Orleans (8.1%) Kansas City (7.9%) Birmingham (7.7%) Milwaukee (7.4%) St. Louis (7.4%) Cleveland (7.0%) Cincinnati (6.9%) Atlanta (6.6%) Memphis (8.3%) Providence (7.3%) Philadelphia (7.3%) Kansas City (6.6%) Atlanta (6.6%) Birmingham (6.6%) Phoenix (6.0%) Dallas (6.0%) Fort Worth (5.7%) Detroit (5.7%) Memphis (8.6%) Birmingham (7.3%) Atlanta (6.8%) New Orleans (6.3%) Providence (6.2%) Kansas City (6.1%) Pittsburgh (6.0%) Cincinnati (6.0%) St. Louis (5.9%) Cleveland (5.5%) Note: Southeastern cities are highlighted in blue. 17
18 Beyond medians: the worst off All households Low-income households Low-income multifamily households African- American households Latino households Renting households Memphis (12.8%) Birmingham (10.8%) New Orleans (10.0%) Atlanta (9.7%) Providence (8.7%) Pittsburgh (8.6%) Cincinnati (8.5%) Kansas City (8.4%) Philadelphia (8.3%) Dallas (8.2%) Memphis (25.5%) New Orleans (18.9%) Birmingham (18.8%) Atlanta (18.2%) Philadelphia (16.7%) Providence (16.7%) Pittsburgh (15.7%) Cincinnati (15.5%) Detroit (15.3%) St. Louis (14.8%) Memphis (21.8%) Birmingham (16.2%) Atlanta (15.7%) Pittsburgh (15.7%) Chicago (14.6%) Cincinnati (13.0%) St. Louis (12.9%) Cleveland (12.3%) Hartford (11.8%) Fort Worth (11.4%) Memphis (19.4%) New Orleans (16.4%) Kansas City (16.2%) Pittsburgh (16.1%) Cincinnati (15.6%) Milwaukee (15.5%) Birmingham (15.4%) Chicago (15.3%) Detroit (14.8%) St. Louis (14.4%) Memphis (15.9%) Philadelphia (15.7%) Pittsburgh (12.4%) Kansas City (12.0%) Providence (11.7%) Atlanta (11.5%) Hartford (11.1%) Phoenix (10.7%) Birmingham (10.4%) Detroit (10.2%) Memphis (18.5%) Birmingham (15.1%) Atlanta (13.3%) St. Louis (12.9%) New Orleans (12.6%) Cincinnati (12.1%) Cleveland (11.9%) Pittsburgh (11.9%) Providence (11.7%) Kansas City (11.7%) Note: Southeastern cities are highlighted in blue. 18
19 Range of low-income energy burdens in the Southeast 19
20 Energy burden % Regional energy burden trends 14% 12% 10% 8% 6% 4% 2% 0% Midwest Southeast Northeast South Central Southwest Northwest California Low-income Low-income multifamily African-American Latino Renter Regional median Median for all cities 20
21 Energy burden % Deep dive into the Southeast 14% 12% 10% 8% 6% 4% 2% 0% Low-income Low-income multifamily African-American Latino Renter City median Median for all cities 21
22 Misconceptions about high energy burdens High energy burdens do not correlate with high energy prices Lower incomes do not determine high energy burdens Other important factors: Lower incomes Income equality Inefficient housing stock Utility energy efficiency programs /investments 22
23 Policies and programs to address high energy burdens Program type Program Funding source Bill assistance Weatherization Energy efficiency Low Income Home Energy Assistance Program (LIHEAP) Other low-income bill assistance programs Modified rate design, rate discounts or waivers, and modified billing methods Weatherization Assistance Program (WAP) Low-income energy efficiency programs Federal and state taxpayers Utility ratepayers; private contributions Utility ratepayers Federal and state taxpayers Utility ratepayers 23
24 Multiple benefits of energy efficiency for low-income households Lower monthly bills (residents) more disposable income, reduced stress, more money spent in local economy Improved housing (residents) better health and safety, increased property value, lower maintenance costs, greater housing satisfaction Local economic development (community) more local jobs, improved quality of life, increased property values Less power used (utilities and community) reduced environmental pollutants, improved public health, avoided excess cots of increased generation, capacity, and transmission investments 24
25 Strategies for improving energy efficiency in low-income communities 1. Improve and expand low-income programs 2. Collect, track, and report demographic data on program participation 3. Strengthen policy levers and more effectively leverage existing programs 4. Utilize the Clean Power Plan to prioritize investment in low-income energy efficiency 25
26 Improve and expand low-income utility programs Incorporate best practices in single and multifamily energy efficiency programs For single-family best practices, see ACEEE report Building Better Energy Efficiency Programs for Low-Income Households at For multifamily best practices, see ACEEE report Apartment Hunters: Programs Searching for Energy Savings in Multifamily Buildings at Include multiple benefits of lowincome energy efficiency programs in cost-benefit testing. Provide financing options to households and multifamily building owners with strong consumer protections. 26
27 Collect, track, and report demographic data on program participation Collect and use data on household demographics to ensure that programs are reaching the target households. Examples of demographics: Income level Renter versus owner Multifamily versus single family Race/ethnicity Language-spoken 27
28 Strengthen policy levers and leverage existing programs Set policy directives to support utility energy efficiency programs, with separate goals for delivery of low-income programs Advocate to the Public Utility Commission for strong lowincome savings targets and programs Set policies to require energy usage reporting and benchmarking for multifamily buildings Prioritize investment in lowincome energy efficiency through the Clean Power Plan 28
29 Final thoughts and next steps The overwhelming majority of low-income and households of color in major US cities experience higher energy burdens. We encourage cities and other stakeholders to use the data from this report and the recommendations as they work to address high energy burdens in their communities. 29
30 Questions? Ariel Drehobl, Lauren Ross, Link to full report: 30
31 WEBINAR SERIES Low-Income Landscape Assessment Preview Abby Fox, Policy Manager Southeast Energy Efficiency Alliance 31
32 Scope of Analysis 20-plus southeastern electric utilityadministered energy efficiency programs Eight southeastern states Data collected: Program start date Program type Eligibility criteria Measure mix Per-unit investment caps Participation metrics Cost of saved energy Qualitative success factors/ challenges Southeast Energy Efficiency Alliance 32
33 Early Results Programs are Often challenging to administer Evolving Important to both utilities and policy makers Successful models are spreading Southeast Energy Efficiency Alliance 33
34 Questions? Southeast Energy Efficiency Alliance 34
35 Southeast Energy Efficiency Alliance 35
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