Across the country, low-income households pay proportionately more than the average household in energy costs and that divide is the greatest right here in Memphis.
That’s according to an April report from the American Council for an Energy-Efficient Economy (ACEE). That group will address the Memphis City Council Tuesday at the behest of the Memphis branch of the National Association for the Advancement of Colored People (NAACP) and the Southern Alliance for Clean Energy.
The average Memphis household pays about 6 percent of their annual income on energy costs, according to ACEE. But lower-income households here pay an average of 13 percent of their annual income on energy. About a quarter of low-income household pay more than 25 percent of their annual income on energy costs.
“It’s unacceptable to me to see our poorest citizens paying upwards of 25 percent of their paychecks each month just on their utility bill,” council member Patrice Robinson said in a statement. “As a Memphian who cares deeply for my fellow citizens as well as the [being] the chairwoman of the council’s (Memphis Light Gas and Water) committee, I’ve been working with my staff and community stakeholders to understand the issue of energy burden and to start moving us toward solutions.”
Ariel Drehobl, the lead author of the ACEE report, said higher energy burdens are common in “communities of color," and with renters, low-income families, and those residing in multifamily housing.”These groups had the highest energy burdens in Memphis, she said.
“Many families in Memphis live in older, inefficient housing, and lack necessary capital to make home improvements that can reduce high energy bills,” said Angela Garrona, energy research attorney for the Southern Alliance for Clean Energy.
Madeline Taylor, executive director of the Memphis branch of the NAACP, said high energy bills can have a big impact on Memphis families.
“As Memphis families, with low income or on a fixed income, struggle to meet their utility expenses, they continue to fall behind in a never-ending effort to just keep current on their energy bills,” Taylor said. “This impacts the health of the families when services are disconnected, their credit worthiness, and the likelihood that they can ever be citizens responsible for their survival.”
The Memphis utility is aware of the high energy burden here, said Tamara Nolen, supervisor of corporate communications for MLGW.
“That’s why we have so many programs in place [to help customers], because of the housing stock,” Nolen said. “Homes in Memphis are older and many of them don’t have proper insulation. Some of them have cracks in the windows and doors.”
Nolen said MLGW offers Project Care, which offers financial assistance to customers over 60 who cannot afford to make energy efficiency upgrades to their homes. The Energy Doctor program, she said, offers customers a home inspection for energy efficiency and also offers a free kit that includes items like caulk, and weather-stripping. Finally, Nolen said MLGW’s Eco Build program works with some builders to help insulate some homes.
Nolen said she is aware of the ACEE report and noted that MLGW president Jerry Collins will be at Tuesday’s meeting with the council. However, she would not comment on the report.
MLGW rate changes
The meeting with ACEE on the city’s high energy burden comes at the same time MLGW is trying to change electricity rates for customers, a move utility officials say could help low-income households.
The utility has asked council members to approve a change on Tuesday that would increase customer charges, while lowering energy charges. The move is not expected to bring new revenue to MLGW.
Instead, the utility said the change is a “strategic rate re-alignment to reduce the chance that low-income customers will subsidize high income customers.”
The current service charge for residential customers is now $10.60 per month, according to MLGW. That would rise to $11.60 per month. Nolen could not say whether or not the electric rate decrease would make the change a wash for customers, noting MLGW’s chief financial officer was out of the office on Friday.
Those service charges would increase exponentially for the three stata of MLGW customers. Those classes are based on energy usage and those that use the most (between 1,001 kilowatts - 5,000 kilowatts per month) would see the charge rise from about $192 per month to about $300 per month.