Disadvantaged Californians Could Face Additional $174M in COVID-19 Related Electricity Expenses

As the economic constriction from COVID-19 further tightens, low-income and disadvantaged energy customers remain uniquely vulnerable. Not only are these families unlikely to have the ability to work from home, but their incomes are also likely at risk: they may be one of the 40M who recently filed for unemployment. 

These families have already felt the sting of utility bills with the full impact of COVID-19 and the surge in cost will be impossible to ignore. In short, we will need a plan to alleviate the financial energy burden low-income families will bear in the coming months.

Within disadvantaged communities, where poverty, high unemployment, and environmental burdens are particularly pronounced, residential energy use is consistent with, if not higher than, the increases across the rest of California.

A sample of 50,000 disadvantaged customers suggests that communities in Northern California have seen a 7% increase in residential electricity use, with an 11% increase in Southern California. These figures suggest a potential annual cost increase of approximately $174M to customers living in highly disadvantaged communities. Some communities, including pockets in Fresno, Stockton, and Lancaster, have been hit even harder and experienced a 50% or greater increase in residential electricity use. These families are on track to spend an additional $441 this year, an unforeseen bill hike coming during an exceptionally difficult time. 

It’s worth noting that while the absolute increase is stark, the relative impact to these communities is even more consequential. These families spend a disproportionate amount of their incomes towards paying essential utility services, including household energy, and an increase in one exacerbates problems for another. 

What should we do?

We need a robust and flexible plan to ensure disadvantaged families have continued access to public utility services, including household energy. This segment will feel the financial burden more acutely than others, so it’s worth designing plans to ameliorate this expected hardship. Many utilities, like PGE, and regulators have responded to help these customers and have thus far implemented helpful changes, such as shutoff protection. What else could be considered locally and at a national level?

1. Payment Assistance. Special relief funds, similar to ERCOT’s Electricity Relief Program, should be made available to every impacted or low-income ratepayer in the US.
2. Bill Foresight and Transparency. Simple bill alerts that proactively alert customers that their use is on track to exceed last year’s usage. No customer should suffer from ‘sticker shock’– increased costs should be predictable once a customer is seven or more days into a billing cycle.
3. Payment leniency. Simple measures such as waived late fees, deferred and flexible payment plans, and no negative credit reporting, will lessen the burden.
4. Expand eligibility for low-income rate plans and programs, such as CARE and ESA in California, and CEAP in Texas.
5. Zero-cost energy programs. Educate customers about zero-cost programs to reduce energy costs, such as conservation methods and peak time rebates.
6. Special access to technologies that enable smarter and more cost-effective use of household energy.
   

As the impact of COVID-19 ripples across the economy, its devastating effects are coming into sharper focus. It’s clear that federal, state, and local action will be needed to ensure that our nation’s most vulnerable communities have the tools and assistance required to navigate through this crisis.