My Turn: Focus energy policy on costs

  • Power lines snake across a snow covered farm field in Clarks Hill, Ind. AP

For the Monitor
Wednesday, August 31, 2016

Our energy policy is broken. President Obama and much of the Democratic Party’s singular focus on shaping energy policy around climate action is leaving far too many Americans out to dry. We have decidedly lost the balance between environmental action and the need to provide affordable, reliable energy.

According to economist Roger Colton, who has been studying home energy affordability for decades, the gap between what low-income Americans can affordably pay for their utility bills and what they are actually paying is growing by the year. In fact, the gap last year for those near or below the federal poverty line was roughly $40 billion.

Colton classifies paying 6 percent or less of one’s income on utility bills as the measure of energy affordability. Many low- and fixed-income households are spending 25 to 30 percent of their income on utility bills. And energy assistance programs are not picking up the slack. For example, the nonpartisan Congressional Research Service estimates that just 22 percent of those families eligible for the federal Low Income Home Energy Assistance Program receive it.

In many states, particularly in New England, the difference between the assistance low-income households need to pay their utility bills and what’s actually available tops $2,500 per year. While New England households generally have larger energy costs because of their long winters, energy policy is taking its toll.

The Northeast has moved aggressively to phase out coal power and boost renewables. Phasing out the region’s most affordable source of electricity and replacing it with more expensive alternatives has consequences. Four New England states have electricity rates that are among the 10 highest in the country.

While reducing emissions is a worthy goal, we need to ensure we aren’t putting an undue burden on consumers, particularly those with low and fixed incomes.

Unfortunately, the U.S. Environmental Protection Agency readily admits that its flagship emissions-reduction effort, the Clean Power Plan, is going to increase electricity prices.

The EPA claims these higher electricity rates will be offset by energy conservation and efficiency gains. But, for millions of Americans already struggling to keep the lights on, there isn’t room to use less energy. These folks don’t have the funds to go out and buy more efficient furnaces and refrigerators or to upgrade windows.

The consequences of ever-rising electricity prices and a widening gap between what energy assistance programs offer and what people need often comes with heartbreaking consequences. A 2007 study by the University of Denver found that in Colorado the second leading cause of homelessness for households with children was the inability to pay utility bills.

Where is the political outcry? Presidential stump speeches have been full of dire warnings about climate change and income inequality but not a word has been uttered about the need to lower energy costs.

Denying Americans affordable energy is unacceptable. Instead of trying to raise electricity prices with regressive regulation, such as the CPP, we should be focusing on energy innovation to make clean energy cost competitive. Our energy policy must aim for affordable energy and clean energy in equal measure.

We need clean energy solutions that can compete in the marketplace and that help reduce energy costs, not raise them.

(V.K. Mathur is a professor emeritus in the Department of Chemical Engineering at the University of New Hampshire in Durham.)