Energy Burden Study

We Want Green Too, a Detroit community-based non-profit organization, in partnership with the Michigan Environmental Justice Coalition and Soulardarity, a Highland Park community-based non-profit, have joined to engage in a deep conversation of energy justice / energy burden ravages in the community to determine a strategy to move communities forward in energy democracy.  The information needed to come directly from the homeowners and not corporate entities.

Key Findings:

  • Energy affordability and reliability problems persist across the whole of Michigan’s energy system.
  • Our current energy system is failing to meet basic energy and energy-related wellbeing needs for residents statewide.
  • And there is an inequitable distribution of energy costs and energy benefits, particularly regarding the electric reliability costs and benefits for those with high energy burden, and this is more acutely so in the City of Detroit.

As a result of those conversations, We Want Green Too took the lead to acquire answers directly from residents and conceived and conducted a survey of residents in Detroit (with a focus on the east side) and six counties in Michigan’s Upper Peninsula regarding energy burden and home-energy-related experiences.  This survey was motivated by problems of inequity, unaffordability, and unreliability of energy service and resources for households in these geographic areas.  We teamed with the University of Michigan SEAS and were granted a student researcher, Kate Hutchens, to assist in gathering and analyzing the data.  This report is of some of the findings.

We were particularly interested in investor-owned monopoly utilities DTE and UPPCo, each of which charge high rates above the national and Michigan average. We interviewed about 700 people, a little over half from the City of Detroit, and just under half of them from across 6 Upper Peninsula counties. The home energy systems in these two geographies are really different, particularly around home heating.  But there are patterns that emerge around energy burden that prevail across both geographies.

Energy burden is typically calculated by researchers and policy-makers as home energy costs as a proportion of household income.  The term “high energy burden” indicates the threshold where energy becomes unaffordable for a household, relative to their other costs of living.

We found that 54% of our respondents had estimated energy burdens at or above 6%, which is one often-cited threshold for unaffordable energy.

35% of our respondents had estimated energy burdens at or above 10% of income.

More than 1 in 5 respondents were always or usually worried about having enough money to pay their energy bills.  That's across our full set of respondents.

Unsurprisingly, respondents with high energy burden, at or above 6%, worried more frequently.  This effect is much more pronounced for respondents in Detroit, which is the graph in orange.  So here we see on the orange Detroit chart that, for those with high energy burden, 48% are always or usually worried about affording their energy bills.

We observed a significant effect of energy burden on energy reliability problems.  Respondents with higher energy burdens experienced more energy reliability problems, and more resulting negative impacts from those reliability problems.  

In other words, those who are spending a bigger share of their income on their energy bills are also getting worse service than those who spend less of their income on home energy.

One of the survival strategies  used for longer outages is going to stay somewhere else that does have power. Some think of this as "evacuating" and some refer to it as having to leave home. Clearly this strategy is going to be more problematic when there are emergency situations, such as Covid-19. Nearly 20% of all of our respondents said that they had to evacuate or leave home during a power outage.

We see again, on the green chart, of all respondents, those with unaffordable energy costs - energy burdens at or above 6% - were more likely to have to evacuate.   The orange chart shows that Detroit respondents were overall more likely to experience this negative energy reliability impact than those in the UP on the blue chart.  But high energy burden still appears to affect this outcome for those in the UP.

Here's our pattern again: 1. it's a problem, 2. it's worse for folks with a high energy burden, and 3. It's even worse for people in Detroit.

Another common negative impact of outages is spoilage of food or perishable products when the refrigerator or freezer isn't running.  Over a third of all of our respondents lost food or other perishables due to a power outage.  Having to replace food or medicine on a stretched budget is a real hardship, and a nasty twist on the "heat or eat" dilemma when "heat" isn't actually an option during an outage.

Again, we see our same pattern.  Those who pay more of their income toward energy bills were more likely to have to bear the cost of replacing food, medicine, etc. The green chart shows that those with high energy burden across all respondents were more likely to have lost food or other perishables.  Comparing the orange chart for Detroit with the blue chart for the UP, we see, again, that the extent of facing this challenge is higher for both groups in Detroit, and the effect of energy burden on this variable appears greater for Detroit respondents.

It's a problem.  It's worse for those with a high energy burden, and the negative impacts are further magnified for high-energy-burden folks in Detroit.

Our survey covered a range of topics, with a focus on wellbeing outcomes related to home energy. There is much analysis yet to be done on this rich set of stories and data points.

  • Outages & outage impacts
  • Energy costs & related stress
  • Household emergency preparedness
  • Energy assistance program participation
  • Health vulnerabilities
  • Home temperatures / comfort
  • COVID stay-at-home period energy costs
  • Home energy (electric, gas, firewood, etc.) supplier(s)
  • Home heating and cooling methods
  • Awareness and concern about MI energy policies and issues

So what are some solutions to these energy burden and reliability problems in Michigan?

  • We can relieve Michigan households' high energy burdens through broadly accessible Percentage of Income Payment Plans (PIPP).
  • We could pursue lowered overall utility costs for Michigan residents through alternatives to investor-owned utilities such as community choice aggregation (CCA).
  • We should improve resilience of the utility-controlled grid in Michigan's low-income communities through targeted approaches like mandating expedited outage service restoration and prioritizing utility maintenance and upgrades in low-income and/or high-energy-burden communities.
  • And we can mitigate both energy burden and energy reliability problems by building up locally-owned grid resilience assets in low-income and low-wealth communities, particularly by deploying microgrids and renewable energy generation.

Power plants & environmental racism

If we put a dollar value on the health care costs and mortality, the health costs from DTE power plant air pollution sum to $302 million annually across the tri-county area. Across census tracts, if every census tract had the same age distribution, health costs would range from $27 per person to $115 per person annually -- with Black, low-income, immigrant, and communities and color tending to experience the highest health costs. (source)