Berkeley Lab study recommends equity advancement in energy regulation

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A report examined by Lawrence Berkeley National Laboratory made suggestions to improve equity in energy utility regulation.

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A press release published by the Lawrence Berkeley National Laboratory made recommendations to advance energy utility regulation.

The report examined in the press release, titled “Advancing Equity in Utility Regulation,” provides historical and policy analysis, as well as recommendations on how to improve equity in energy utility regulation.

This report is the 12th study in the Future Electric Utility Regulation series funded by the U.S. Department of Energy, which aims to foster research and discussion around federal and state electric utility regulation.

“COVID-19 pandemic brought the inequities into sharp focus,” said Lisa Schwartz, technical editor of the report and Berkeley Lab manager and strategic advisor.

In the report, energy equity is defined as the fair distribution of the benefits and burdens of energy production and consumption.

According to Schwartz, energy rate design is one of the factors in energy equity.

“Energy equity is not going to make each household’s percentage of income spent on energy the same,” Schwartz said. “But will help reduce disparities in energy burden.”

Low-income households and households of color disproportionately experienced “household energy security challenges,” including unaffordable utility and energy bills and loss of vital service, according to the report.

The report shows that approximately 15% of households with less than $20,000 in annual income have to forgo necessities to pay for home energy almost every month, based on the most recent U.S. Energy Information Administration Residential Energy Consumption Survey in 2015.

“Everyone needs electricity, but the poor pay a higher proportion of their income to get it,” the report states. “(They) typically require more energy to achieve the same services—food storage, heating and air conditioning, etc.—because they cannot afford efficient housing or appliances.”

Data has also shown that low-income households lose home heating service at a pace five times higher than households with income great than $80,000, according to the report.

Moreover, the rate of Black households losing home heating services is 2.5 times that of white households.

“The extent of the differences is just appalling,” Schwartz said. “This is relevant to everyone in Berkeley because they are all getting service from a regulated electric company, and state utility regulators can take action to reduce these inequities.”

The report recommends states consider energy justice and promote public engagement in regulatory decision-making, allocate funding for energy justice organizations to participate in utility proceedings and support utility energy efficiency and solar programs for low-income households.

She added it is important for individual utilities to make information transparent at a zip code level.

A key recommendation in the report is to require utilities to make data transparent so it is publicly posted, easily accessible and updated regularly,” Schwartz said.

According to a Berkeley City Council report, Congress passed a $1.9 trillion economic stimulus and recovery bill in response to the COVID-19 crisis in March 2021. Berkeley made use of some of the funding to launch a Climate Equity Action Fund to assist low-income renters and homeowners in obtaining green transportation and building improvement grants.

Berkeley Mayor Jesse Arreguín added that Berkeley was the first U.S. city to eliminate natural gas in new constructions.

“Starting in March this year, all residential buildings in Berkeley will be powered by 100 % renewable energy at the rates that they are currently paying,” Arreguín said in an email.

Schwartz added that access to clean and efficient energy programs and technologies is also important. While there are some “great” energy efficiency programs, low-income customers cannot afford them and thus cannot access the programs to help save energy and money.

Many states, including California, put a moratorium on electricity disconnections to ensure continued access to essential utility services during the COVID-19 pandemic. The California Public Utilities Commission, or CPUC, suspended disconnections so residential customers can pay off deferred energy bills in two years, according to the CPUC’s report.

Schwartz said she is excited to see so many states are beginning to pass laws and regulations to try to correct some of these energy inequities, but it is “daunting” to see how much needs to be done.

Winnie Lau is the lead research and ideas reporter. Contact her at [email protected], and follow her on Twitter at @winniewy_lau.