Issues of the Environment: Alleviating energy burden for Michigan’s low-income households
- More than 1.4 million Michigan households, or 37%, are considered low-income, earning less than $30,000 annually.1 Many low-income households face a large energy burden. Energy burden is a household’s heating and electric expenses as a percentage of income. (Source: *directly quoted* https://www.elevatenp.org/wp-content/uploads/Energy-Burden-in-MI.pdf)
- According to nonprofit Elevate Energy, “The average annual energy bill in Michigan is $2,716. A household is considered energy burdened when energy costs exceed 6% of household income. Michigan households would need to earn $45,000 annually to afford this bill. Home energy efficiency upgrades, like air sealing, insulation, lighting upgrades, and others, can reduce energy burden by saving between 15% and 30% on energy costs.” (Source: *directly quoted* https://www.elevatenp.org/wp-content/uploads/Energy-Burden-in-MI.pdf)
- January 20th, 2022, victory for customers facing the highest energy burdens. A settlement agreement in the DTE Energy Waste Reduction (EWR) case, approved by the Michigan Public Service Commission. Among other things, the settlement requires that DTE increase the company’s budget for income-qualified gas and electric energy waste reduction efforts. These budget increases, amounting to $10.5 million over 2022 and 2023, will assist Michigan households that experience the highest levels of energy burden or percentage of income spent on energy costs.
- Energy burden disproportionately affects those living in poverty ($26,500 for a family of 4 in 2022), especially seniors on a fixed income, low-income families with children, and racial-ethnic minorities,. They are also more likely to renters. Low-income seniors are much more likely to have service interruptions for 24 hours or more, and children in energy insecure homes are also more likely to face food insecurity, hospitalizations, and developmental delays Poorly heated or cooled homes contribute to asthma, respiratory problems, heart disease, arthritis, and rheumatism. Families often struggle to pay their energy bills and sacrifice nutrition, medicine and other necessities compounding the effects of inequality. (Source: *directly quoted* https://www.elevatenp.org/wp-content/uploads/Energy-Burden-in-MI.pdf)
- The Washtenaw County opportunity index indicates that much of the county has a very low child poverty rate of 0-5%, but the poverty rate in the greater-Ypsilanti region rises to 37-66% in many neighborhoods. This ruling may help these low-income residents make hope improvements that improve energy efficiency and lower bills, including fixing leaky roofs, water and mold infiltration, faulty ductwork, and outdated electrical systems, all of which create health hazards within homes and investment deferrals. (Source: http://www.opportunitywashtenaw.org/economic-well-being.html)
- Addressing health and safety measures that include air quality, comfort, and environmental hazards, creates a healthier place for people to live and improves their quality of life,” says Alexis Blizman, Legislative & Policy Director of the Clean Energy & Climate Action Team. (Source: *directly quoted https://www.ecocenter.org/dte-energy-waste-reduction-case-settlement-helps-most-vulnerable-customers?eType=EmailBlastContent&eId=76bdf1de-7fdf-4949-bf13-ed7863c41ccc)
David Fair: Energy waste, efficiency and affordability, I'm David Fair, and that's the topic on 89 one WEMU's Issues of the Environment. 37 percent of Michigan households are considered low income, meaning earnings of $30,000 or less, and that means many face a tremendous energy burden. Those in this situation are to benefit most from a recent settlement reached between DTE Energy and the Michigan Public Service Commission. That agreement will result in DTC spending 10 and a half million dollars over the next two years on measures aimed at alleviating some of the highest levels of energy burden. Our guest this morning is Alexis Blizman, and Alexis serves as legislative and policy director for the Ann Arbor-based Ecology Center. Thank you so much for the time today.
Alexis Blizman: Pleasure to be here.
David Fair: What was the genesis of the complaint that ultimately led to this settlement between DTE and the Public Service Commission?
Alexis Blizman: Every two years, the regulated utilities are required to file their energy waste reduction plans. And so, we have intervened in this case. And then, the case two years ago, in partnership with Ecology Center, NRDC, Sierra Club, Earthjustice and National Housing Trust. The focus of our intervention has been predominantly around income-qualified energy waste reduction.
David Fair: So, the settlement announcement says it will help alleviate some of the highest energy burdens in the state, and that was certainly the goal towards which you were working. Who exactly is this going to help?
Alexis Blizman: It's really..this is geared, obviously, it's DTE customer territory, but we really focused on trying to make sure that this had on then targeted those that were facing the highest energy burden. Often, those are Black and Brown communities. Detroit faces one of the highest energy burdens in the country. And so, really, this plan that it services.
David Fair: We have both mentioned energy burden a number of times now. How do you define energy burden?
Alexis Blizman: Energy burden is really the percentage of income that households will have to spend on energy costs, and that's, you know, all utilities, gas and electric. The average home spends, you know, three to five percent. But, in the city of Detroit, and those that are, you know, lower income or income qualified, can face energy burdens upwards of 10 to 15 percent. Not being able to use that money for other necessities, such as food, transportation, medical costs, really puts an incredible burden on those households.
David Fair: So, there's 10 and a half million dollars that DTE will put towards this effort over the next two years. How will that settlement money be applied specifically?
Alexis Blizman: Well, it's actually an increase of ten point five million.
David Fair: There you go. Better stated.
Alexis Blizman: And also, you know, more than 35 million over what their budget was for 2020 and 2021. So, it's a huge increase. This money will be spent really to do deeper energy efficiency and weatherization measures in the home. Things such as air sealing, insulation, obviously, new furnaces, things that will actually help reduce energy costs, so that they're not using as much energy. A lot of the programs that exist really are to help with bill payment assistance, and those are critical. People need that assistance. But still, payment assistance does not ever get people out of a cycle of this high energy burden of being unable to afford the utilities. So, by making these investments in energy efficiency, that means that, you know, we can reduce their costs and possibly get them out of the cycle.
David Fair: 89 one WEMU's Issues of the Environment continues as we talk with the Ecology Center legislative and policy director Alexis Blizman. As we continue to look at energy efficiency as one of the primary pathways to more affordable energy and a more sustainable environment, what other avenues are being explored at the federal, state, and local levels that would perhaps enhance what is being done through DTE?
Alexis Blizman: There are certainly a lot of weatherization dollars that are coming down through the federal government, both through the infrastructure plan and the American Rescue Plan. Those budget negotiations are still ongoing, you know, at the state level, but we want to ensure that there is a lot more money going toward these efforts. Another really important piece, which is also part of the settlement and was part of the settlement two years ago, is health and safety pilot. There are so many people who are qualified by income for these energy waste reduction measures, but the condition of their home due to disinvestment, often because of the history of redlining, you know, lack of income, and, basically, has resulted in these issues within the home that mean that the energy waste reduction measures can't be solved, such as a leaky roof or mold infiltration or lead or often we see duct work that's either non-existent or really substandard. Sometimes, you have old wiring. And so, until those things are fixed in the home, you can't actually even move forward with the energy waste reduction measures. And so, with the settlement two years ago, we established with DTE a pilot program to actually try to address some of these health and safety issues that caused deferrals. It's been an incredible success. And so, for this settlement, we were able to expand that program targeted a little bit more geographically and demographically to ensure that those who are facing the highest energy burden are getting those services. But there needs to be a lot more money invested in that.
David Fair: And on that bigger picture front, as we explore the variety of assistance programs that do exist and are and will continue to be created and expanded its kind of working small step by small step part and parcel. But are we potentially deferring the needed action on the root causes like wage and income disparity and poverty as a whole?
Alexis Blizman: Absolutely. I mean, these are all things that are connected. This is focused on, you know, one small piece of it, but there's so many other things that need to be done. One of the other things we're working on, which is outside of the energy waste reduction cases, are affordability programs within the utilities. They're piloting a program this year for a percentage of income payment plan. And we hope to see that actually expanded at the state level, so that nobody is paying more than, you know, I think, 10 percent of their income for both gas and electric combined across the board. Without these long term affordability measures, energy costs keep going up in Michigan. DTE just filed a new rate increase request. And without things that are targeted specifically toward those that are low income, we are never going to solve the problem. But also, yes, you're right, but. You know, increased wages, you know, better benefits, better schooling, everything that...
David Fair: There is no one stop solution. It's going to take all of it, right?
Alexis Blizman: Right.
David Fair: We're talking with Alexis Blizman from the Ecology Center on WEMU's Issues of the Environment. As we deal with the present, we must also look to the future. Are you working with elected officials, other policymakers, to consider some steps, such as mandating that all new construction, particularly of affordable housing, might come with charging stations and solar panels that would further alleviate some of the energy burden?
Alexis Blizman: Absolutely. We're working both at the legislative level and in continuing to work within some of these various cases within the Public Service Commission, as well as, you know, working on things with MSHDA, to try and ensure that all affordable housing has the ability to be energy efficient, to have access to renewable energy, including solar panel, but also, definitely, electric vehicle charging infrastructure. All of these things need to be connected, and people need to be able to have some control over their own energy creation.
David Fair: Are we seeing similar progress with consumers energy as we seem to be making with DTE?
Alexis Blizman: This same coalition has also intervened with the Consumers Energy waste reduction case. That case is ongoing. We hope to achieve a similar type of settlement. Consumers also put in the health and safety program two years ago. We anticipate that will be continued. In fact, it's been so successful that all of the major regulated utilities are now coming up with some sort of health and safety payment, recognizing that this is a really critical piece to getting this done.
David Fair: From your vantage point, what is the next step that those who question whether or not they're eligible to take in order to determine that eligibility?
Alexis Blizman: Well, I mean, there are several sort of mechanisms to try to get assistance and connection to these programs, certainly through the utilities. And some of it includes some of their outreach to their customers, but also things like Michigan 211 to get assistance. Then, you know, certainly people can contact the Public Service Commission, and they can put them in touch with the people who are running these programs. We want to make sure that people are informed. The community action agencies are critical to this work as well. Besides them just doing a lot of the contractor work, they also do outreach and help identify what issues may need to be solved.
David Fair: I'd like to thank you for your time today, Alexis. It is much appreciated.
Alexis Blizman: Thank you very much.
David Fair: That is Alexis Blizman. She is legislative and policy director for the Ann Arbor based Ecology Center and our guest on Issues of the Environment. For more information on today's guest and topic, visit our website at WEMU dot org. This weekly feature is produced in partnership with the Office of the Water Resources Commissioner, and you hear it every Wednesday. I'm David Fair, and this is one WEMU FM and WEMU HD1 Ypsilanti.
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