Public Utilities Fortnightly has published the sixty-page Electric Affordability Factbook. It provides new quantitative detail on those electric utility residential customers that are struggling with affordability.
You can freely download the Factbook here or view the online flipbook.
Twenty-five Takeaways
Excerpted from the Factbook’s Executive Summary, the following are twenty-five takeaways:
1. In only one year since 2016 has the average increase of electric rates outpaced the Consumer Price Index, in 2022. (Chapter I)
2. For the fifty-three million households in the lowest two income quintiles, their average total expenditures on all goods and services consistently and substantially exceeds their reported income before and after taxes. (Chapter II)
3. For more than nine-tenths of the four and six-tenths million households headed by those of age sixty-five and older, with income less than fifteen thousand, without any earners, their electric bills can be an enormous and unrepresentative percent of income. (Chapter II)
4. Making any comparisons of electric bills to income is misleading. (Chapter II)
5. Across all the nation’s lowest income quintile households, electric bills averaged 3.7 percent of what they spent money on. (Chapter II)
6. From 1997 to 2022, household total expenditures per capita nationally increased a hundred and fifty-nine percent while residential electric bills increased a hundred and twelve percent. (Chapter II)
7. In 2022, electric bills averaged 1.9 percent of household total expenditures in the West, 2.0 percent in the Northeast, and 2.1 percent in the Midwest, but 2.9 percent in the South. (Chapter II)
8. In 2022, the average monthly electric bill for the twenty-six million households living outside urban areas was a hundred and sixty-six dollars. It was generally more than twenty percent less for households living in big cities. (Chapter II)
9. For the seven million households that had income of thirty thousand and below in the West Census region, in 2022, their electric bills average 2.5 percent of their total expenditures. In the Northeast Census region, this average was 2.8 – 2.9 percent. (Chapter III)
10. For economically stressed households, purchasing goods and services generally has become unaffordable for them. The electric bill, whether two, three, or four percent of their purchasing, is just one of the more noticeable purchases and one of the contributors to their unaffordability challenge. (Chapter IV)
11. Household total expenditures, inflation-adjusted, per capita, grew significantly in the U.S. during the fifteen-year period of 2008 through 2022. This is true nationally, in every state since 2008, and in all but eight of the states since 2021. (Chapter V)
12. Bottom half households’ net worth grew significantly over the last dozen years, though it is still under three percent of all household net worth. (Chapter V)
13. The current average of checkable deposits and currency held by bottom half households is only slightly above four thousand dollars. (Chapter V)
14. Across the households most likely to have their buying power fall short of their needs, they are predominantly young unmarried females, usually with low incomes, especially those renting their home. (Chapter V)
15. Four percent of adults in October 2023 said they have missed paying their energy bills almost every month, seven percent have missed some months, and six percent have missed one or two months over the past year. (Chapter VI)
16. For those that said they have missed paying their energy bills almost every month, sixty-one percent are female, fifty-seven percent were unmarried, fifty-two percent had children in the household, forty percent were not employed, and forty-six percent used borrowings from friends or family over the past seven days. (Chapter VI)
17. The largest and most volatile factor in electric utility costs nationally is a direct and indirect function of the price of natural gas. (Chapter VII)
18. In just the past three years, the share of fuel and purchased power expenses has risen dramatically, relative to utility operating revenues. And the price index for natural gas purchased by power plants has gone from 149.4 to 208.4 to 272.2. (Chapter VII)
19. Electric and gas bills continue to track each other closely. And this matters so much when discussing electric bill affordability because gas prices are fundamentally volatile. (Chapter VII)
20. Is there anything in our operations, policy, and regulatory toolbox that can really make a difference for the households having the most difficulty paying bills of every kind? (Chapter VIII)
21. Compare that $14.31 monthly savings for the household in this example to the $2.70 monthly savings by restraining utility revenue requirements, cutting a regulatory increase in half. This illustrates the power of energy efficiency to be a difference maker for the financial situation of lowest income quintile households. (Chapter VIII)
22. Households that live in large single-family detached houses have the highest electric bills for a simple reason. They have the greatest volumes of interior space to cool (and heat if they heat electrically as is common in the South). The data is hands-down on this. For instance, in 2022, the average monthly electric bill of homeowners nationally was a hundred and sixty-one dollars and the average for renters was a hundred and one dollars. (Chapter VIII)
23. The lowest income quintile averages 0.4 earners per household out of 1.6 people, the next to the lowest income quintile averages 0.9 earners out of 2.1 people, the middle income quintile averages 1.3 earners out of 2.4 people, the next to the highest income quintile averages 1.8 earners out of 2.9 people, and the highest income quintile averages 2.1 earners out of 3.2 people. Their average incomes before taxes were $14,191, $37,441, $65,659, $108,730, and $244,025. Their average electric bills as a percentage of average household total expenditures were 3.7 percent, 3.2 percent, 2.7 percent, 2.2 percent, and 1.6 percent. (Chapter VIII)
24. For sixty percent of all households nationally in the middle, next to the highest, and highest income quintiles, especially if they live in cities in the Northeast, Midwest, and West Census regions, decisions and orders over revenue requirements have a modest effect on their home budgets. (Chapter VIII)
25. Substantially accelerating community solar development could have a significant effect on electric affordability among the households that would benefit most. Savings of twenty, thirty or forty dollars monthly, making available that money to help cover the other necessities of life. (Chapter VIII)