Switching to Renewables Can Hurt Vulnerable Groups—Unless Utilities Plan Ahead

To curb emissions of planet-warming greenhouse gases, society must switch from fossil fuels to renewable forms of energy. But the intermittent nature of sources such as solar and wind means that energy production is beholden to the rhythms of nature, which do not always coincide with when people use the most energy. To keep demand from straining the grid during peak hours, some utilities try to curtail electricity use by charging higher rates during those periods. But several researchers and environmental justice advocates worry those policies could disproportionately raise energy bills or harm the health of vulnerable groups—such as low-income households or the elderly—who may already face problems affording the electricity they need.

Environmental psychologist Nicole Sintov of the Ohio State University and environmental policy researcher Lee White of the Australian National University investigated those concerns using data from a pilot project on time-of-use electricity rates run by a utility in the U.S. Southwest (the utility could not be named as a condition of using the data). Their study, published this week in Nature Energy, showed that for some—but not all—of the vulnerable groups they looked at, boosting the cost of energy during peak times increased bills more than it did for nonvulnerable groups and impacted health. Sintov, as well as experts not involved in the research, say the findings point to the need for utilities to do these kinds of detailed studies before they enact such policies on a broader scale to make sure we can achieve carbon-cutting benefits without entrenching or exacerbating existing inequities. “What we really need to be doing is thinking carefully as we roll out” these plans, says Michael Fell, a senior research fellow at the University College London Energy Institute, who was not involved in the study but wrote an accompanying commentary in Nature Energy.

Sintov and White analyzed data on energy bills and health indicators during the summer for nearly 7,500 households that voluntarily participated in the pilot, comparing nonvulnerable households with those that fell into various vulnerable groups (elderly, disabled and low-income individuals, young children, and racial and ethnic minorities). Except for the elderly and disabled groups, residents in vulnerable populations reported making a concerted effort to curb their energy use. All households still saw bill increases when switched to a time-of-use rate, with the elderly and those with disabilities seeing larger increases than nonvulnerable households, while low-income and Hispanic households saw smaller increases. Hispanic households and those with disabilities had worse health outcomes (as measured by seeking medical attention for heat-related reasons), and low-income residents recorded more discomfort from the summer heat than nonvulnerable ones. The results show that to evaluate the full impact of changes to energy rates, “it really matters what vulnerable group you’re looking at,” Sintov says.

The larger bill increases faced by the elderly and those with disabilities could arise because of the need to run medical equipment, the authors suggest. Older people also have a narrower temperature range over which they are comfortable and so need to make more use of air-conditioning. That spending on electricity could also be eating into money needed to buy other necessities. Likewise, even the relatively small increases seen by low-income residents could put pressure on already strained budgets, Sintov says.

The findings underline existing inequalities in energy affordability, she and others say. “Poor people will use energy for fundamentally different reasons than wealthier people, and that’s not just simply because of choices they’re making,” says Julius McGee, a sociologist at Portland State University, who was not involved in the research. “There are qualitative differences to lifestyles that demand different relationships to energy.” For one thing, low-income residents and minorities often have less choice about where they live and are relegated to older buildings that are less energy-efficient, meaning they have to use more energy to keep their home cool. Likewise renters can have limited control over their energy usage because many landlords do not see a direct benefit from improving insulation or providing energy-efficient appliances and thus have little incentive to take such measures.

Improving energy efficiency in buildings is one way policy makers could help mitigate negative effects to vulnerable groups if utilities move to time-of-use rates. Yet Sintov, Fell and McGee would also like to see utilities specifically investigate the impacts to these vulnerable populations when they evaluate the effects of such plans—only looking at the overall change to customer bills would have missed the substantial nuance Sintov and White’s study uncovered. Sintov does caution that “this is one pilot study in one location” during one season, so the results may not generalize to other regions or seasons. But studies elsewhere could uncover similarly complex effects.

Sintov also thinks utilities need to communicate clearly with customers when implementing a time-of-use-rate option, such as showing simple bill comparisons. And where customers are automatically enrolled with an option to then opt out, she adds, utilities should “make the opt-out approach as easy as possible” so residents are not left with electricity bills that force hard choices between being comfortable and putting food on the table.

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