Patrick Kenneally writes an important post on the US Natural Resources Defense Council (NRDC) staff blog, Switchboard, about a recent event in Michigan about how to make safe, affordable, and job-creating energy resources available to the poor. The lessons go well beyond Michigan.
NRDC Tells Regulators and Lawmakers in Lansing that Clean Energy Helps the Poorest and Most Vulnerable
The disproportionate impact energy has on the poorest and most vulnerable in Michigan is often overlooked. NRDC and the Michigan League of Public Policy sponsored an event in Lansing that highlighted this topic. Participants in the event included Paul Smith, Deputy Legal Counsel to Governor Snyder; NRDC’s very own Kate McCormick, who recently authored a report on the subject; John Kinch, Executive Director of Michigan Energy Options; Kimberly Hill Knott, Director of Policy at Detroiters Working for Environmental Justice; and Alexis Blizman, Legislative and Policy Director at the Ecology Center.
NRDC was happy to see a number of Governor Snyder’s staff and members of the Michigan Legislature in attendance. Their engagement is crucial to making safe, affordable, and job-creating energy resources available to the poor.
The key takeaways from the panel discussion include:
Energy Costs Poor Households More
Impoverished homes spend a higher percentage of their income on energy costs, which becomes more challenging when energy bills rise. Moreover, utilities do not simply absorb the costs associated with unpaid bills by low-income customers, but rather roll those unpaid costs into the rates of paying customers.
Innovative utility rate design and payment programs can help reduce energy bills. Dynamic pricing that eliminates flat rates and charges customers the hourly market price of energy can signal to customers to reduce electricity at those times of day when it is most expensive (e.g. mid-afternoon in August when everyone is running their AC). We can also look to the expansion of Consumers Energy’s Clear Control Pilot Program, which uses “behavioral change interventions” designed to encourage low-income customers to reduce energy consumption and move toward self-sufficiency by paying bills in advance, shortening billing cycles, and receiving feedback on energy use through text messages.
Coal Plants Are Making Poor People Sick
Michigan is currently home to five coal plants that received a failing Environmental Justice Performance (EJP) grade based upon how their pollution affected low-income communities and communities of color. The Michigan Department of Community Health has deemed the City of Detroit and its nearby downriver neighborhoods the “Epicenter of the Asthma Burden.” Detroit zip codes in particular are three to six times more likely to have asthma-related hospital admissions than the rest of the state as a whole.
In addition, in 2014 the American Lung Association ranked Wayne County – the home of the coal-burning River Rouge Plant – as the region with the highest number of pediatric asthma cases nationwide. Wayne County is also home to more poor residents than any county in Michigan, with 465,744 of 1,792,365 residents (or 25% of the county population) below the poverty line.
Wayne County’s River Rouge Plant is one of the dirtiest coal plants in the nation and sits in the middle of the River Rouge community, where people of color make up fully 65.3% of the population – this led to the seventh lowest EJP rank in the nation.
Expansion of Energy Efficiency Is Part of the Solution
Energy efficiency, achieved through improvements like better insulation, lighting, and appliances, can significantly cut the amount of energy used, which in turn drives bills down for homeowners.
In Michigan, the first three years of State utility-run energy efficiency programs that began in 2009 reduced energy use by more than 7.7 million megawatt-hours (MWh)–enough to power 900,000 Michigan homes for a year–and produced more than $800 million in net benefits for customers.
In addition to utility run programs, Michigan also receives federal funds as part of the Weatherization Assistance Program. These funds are allocated to Community Action Agencies to promote and implement weatherization opportunities.
The average family saves $300 by reducing heating costs alone by 20-25%. Though federally funded weatherization is a good start, more is needed. Poorer communities would be well-served by Michigan and State utilities significantly ramping up efforts to expand low-income housing weatherization and other energy efficiency measures.
Poor Communities Need Greater Access to Renewable Resources
Renewable energy provides another opportunity to save money on energy costs. Renewable technology can be sited on rooftops of a low-income, multifamily building or in fields of corn. It uses no water and has little to no environmental side effects. For fossil-fuel plants, fuel may account for up to 90% of the wholesale price of electricity. Wind and solar have no fuel costs.
Moreover, distributed forms of electricity generation, such as solar panels, lower the cost of everyone’s electricity. Solar panels, which are primarily most productive at the sunniest/hottest times of day when the price of electricity is most expensive, reduce demand for energy and thereby the cost of electricity.
However, equal access and benefits will not be automatic as costs of renewable installations decline. Michigan should remove barriers to investment in renewable energy, like streamlining the permitting process. Michigan should also look at well-designed and innovative programs from around the country that are already making renewable energy more affordable and accessible to low-income communities.
Energy Efficiency and Renewable Energy Create Jobs
According to the Michigan Public Service Commission, Michigan’s renewable energy legislation has contributed to $2.9 billion being invested in Michigan and over 8,300 direct jobs in the renewable energy industry. Moreover, the legislation “is meeting its intended purpose to encourage developers to maximize utilization of Michigan equipment and labor.”
A study from the Michigan Department of Energy, Labor, and Economic Growth (MCEF) found that over 50,000 Michiganders are employed by renewable or energy efficiency related jobs in Michigan. Studies by the Hill Group, a prominent national consulting firm, found that doubling Michigan’s renewable energy output and energy efficiency resources could result in over 200,000 additional job years and over $28 billion in in-state investment.
Clean energy jobs, especially residential energy efficiency retrofits or installations of distributed generation are local in nature. As such, increasing the availability of energy efficiency and renewable resources to the poor necessarily creates jobs in the neighborhoods in which they live.
Thanks again to all who participated and helped make this event a success. We are hopeful that our message was heard and that Michigan’s legislators and policymakers will work to improve the lives of the poor by continuing to promote and expand clean energy.