With the social unrest following the murder of George Floyd in Minneapolis in May 2020, many in the utility sector began thinking about ways to advance racial equity in the industry – for both their customers as well as their employees.
For example, Georgia Power announced a plan to invest $75 million over a five-year period to help advance racial equity and social justice efforts in Georgia, while other utilities developed diversity, equity and inclusion strategies and, in some cases, added new executive positions to lead these initiatives.
While these efforts are a promising start, the Smart Energy Consumer Collaborative (SECC) conducted groundbreaking consumer research on lower-income People of Color (POC) to uncover where racial disparities exist around energy efficiency, clean energy and utility service in general.
This research provided several key findings and recommendations stakeholders can use to address equity for their Black and POC customers, including the fact that upfront costs tend to be a much more significant hurdle for Black and POC consumers in the low-income bracket than white consumers at the same income level. The research also showed that lower-income Black and POC consumers are much more interested in smart energy technologies – such as smart thermostats, community solar and energy management technologies – and are more concerned with climate change than lower-income white consumers.
To further investigate this important topic beyond what was covered in February’s research, we convened a panel at this year’s Virtual Consumer Symposium featuring speakers from the American Council for an Energy-Efficient Economy (ACEEE), Entergy, Georgia Watch and Eversource Energy.
Following an overview of SECC’s consumer research, Ariel Drehobl, a local policy manager for energy equity at ACEEE, presented research specifically highlighted the energy burdens (annual income divided by annual energy bills) of Black, POC and low-income communities.
According to ACEEE’s research, the average household energy burden comes out to around three percent (ACEEE categorizes anything above six percent as a high energy burden). However, low-income, Black, Hispanic and Native American households all experience disproportionately high energy burdens, meaning that they spend much more of their income on energy bills. The research also found that many metro areas, including Birmingham, Detroit, Riverside and Atlanta, have significant populations with high or even severe (over 10 percent) energy burdens.
As utilities, municipalities and other stakeholders look to address inequities related to energy, helping the consumers noted above lower their energy burdens could be one effective starting place, and Thomas Joyner, a corporate social responsibility analyst for Entergy, presented one such effort at this year's Consumer Symposium.
The Total Power Pilot Program was rolled out to customers in New Orleans in partnership with a local community action agency (CAA). According to SECC’s research, partnerships with CAAs and local nonprofits are highly recommended for utility programs as there’s already a trusted relationship and established means of reaching the target audience.
Entergy’s program recruits customers with high energy burdens and provides holistic updates to improve their homes' energy efficiency. Entergy also provides financial management and energy efficiency information and bill credits to get these customers’ energy burdens closer to four percent. So far, this pilot program has helped about 200 customers reduce their bills to affordable levels.
Capitalizing on interest in solar energy, Entergy also offers the Residential Rooftop Solar Pilot Program in New Orleans, which installs free solar panels on income-qualified consumers’ homes in exchange for a $30 credit on their monthly bills. Customer feedback for the pilot has been overwhelmingly positive as customers are happy to be receiving more clean energy and a considerable discount on their bills.
While many stakeholders in the utility sector have announced promising initiatives within the past year, SECC’s research shows there are many racial disparities in the energy industry that may require sustained efforts to be effectively addressed. Moving forward, we will continue to provide valuable research on racial disparities to help build a more equitable smart energy future for all.
To learn more about racial disparities in energy, access SECC’s “Racial Disparities Among Lower-Income Energy Consumers” paper here.