New VEIC Report for CT Green Bank and Operation Fuel Shows Gap Between what Connecticut Families are Paying for Energy and Transportation and What is Affordable, Creating a Cost Burden for Lower Income Households
According to a recently released report, combined spending on energy, transportation, and housing in Connecticut households exceeds affordable levels in areas throughout the state. On average, these costs are 49% statewide, which is above the 45% threshold for affordability. Low- and moderate-income households are burdened at a higher rate – 68% – than wealthier residents because these costs consume a larger portion of their household income.
These findings are from “Mapping Household Energy and Transportation Affordability in Connecticut,” a study produced by VEIC on behalf of the Connecticut Green Bank and Operation Fuel. The report was partially funded by a U.S. Department of Energy grant for research into strategies for improving access to solar for low-income communities. The Connecticut Green Bank, in partnership with the Clean Energy States Alliance, the grant’s managing organization, has been exploring energy’s intersection with other low-income household burdens.
The study focused on spending in three categories: building energy (household heating fuel and electricity); transportation (vehicle fuel, transit costs, and vehicle ownership costs); and housing (total shelter costs, insurance, taxes, fees, etc.). Examining these categories, VEIC was able to determine the cost burden, household spending expressed as a percentage of annual income, and the affordability gap, which is the difference between an affordable level of spending and actual dollars spent.
“We know that Connecticut is among the states with the highest energy costs in the nation. When you combine this expense with high transportation and housing costs, it can be crippling for a low-income household. While over 430,000 households in Connecticut meet the eligibility requirements for energy bill assistance, only 18.7% are served through available funding. We need more comprehensive and sustainable solutions to help low-income families in Connecticut afford their energy costs,” said Brenda Watson, Executive Director of Operation Fuel and member of the Board of Directors of the Green Bank.
Other key findings include:
- Energy burden is highest among low-income households: 6-7 times higher.
- High energy burdens are clustered in urban areas such as New Haven, Hartford, and Bridgeport.
- The combination of efficiency and solar can help close the building energy affordability gap for most households in the state that own their dwelling, dramatically reducing annual energy costs.
- Fewer options are available to renting households, although existing programs, like Energize CT’s Home Energy Solutions do substantially reduce building energy burden.
- While Connecticut has multiple programs available to low-income customers to help them better afford their utility bills, these programs on their own lack sufficient funding to meet all the needs of customers.
- Transportation costs are high not just in urban centers, but across the entire state
- Reducing transportation costs is crucial to preserving affordability
- Inadequate public and shared transport options result in a personal vehicle needed almost everywhere for an acceptable level of mobility
The report sits at the intersection of many current issues brought to the forefront in 2020, including increased energy usage as people are sheltering in place, greater focus on indoor air quality issues, and the way these factors disproportionately impact communities of color and low-income residents.
The report points out that existing resources are not enough to cover energy needs for the most vulnerable. The Connecticut Energy Assistance Program (“CEAP”) provides direct bill assistance to households earning <60% of state median income. The CEAP program budget is approximately $88 million, which is only sufficient to serve roughly 20% of the 430,825 eligible households in the state. Both of the state’s investor-owned utilities also offer matching payment and arrearage forgiveness programs. In 2019 these programs served nearly 19,000 customers but only 58% successfully completed the program.
A bright spot was VEIC’s finding that programs that combine energy efficiency and solar can close the building energy affordability gap for many low- and moderate-income households who are homeowners. Customers that participated in the Solar For All program from PosiGen and the Connecticut Green Bank in 2019 are estimated to have saved an average of $1,315 on their energy costs.
“There are a number of promising, transformative opportunities to reduce energy burdens in Connecticut,” said Justine Sears, Consultant at VEIC. “For instance, working to make the transportation system more equitable and accessible in urban, suburban, and rural areas would significantly reduce transportation burdens for people – especially low-income households.” To address the transportation issues identified in the report, VEIC recommends strategies to minimize the need for and use of private vehicles by increasing public transit, and promoting electric vehicles and e-bikes, which offer fuel savings over gasoline-powered vehicles.
To access the full report, please click here.
To join an informational webinar detailing the report on Thursday, Dec. 17 at 1 p.m. EST, register online here.
About the Connecticut Green Bank
The Connecticut Green Bank was established by the Connecticut General Assembly in 2011 as the nation’s first green bank. The Green Bank’s mission is to confront climate change and provide all of society a healthier, more prosperous future by increasing and accelerating the flow of private capital into markets that energize the green economy. This is accomplished by leveraging limited public resources to scale-up and mobilize private capital investment into Connecticut. In 2017, the Connecticut Green Bank received the Innovations in American Government Award from the Harvard Kennedy School Ash Center for Democratic Governance and innovation for their “Sparking the Green Bank Movement” entry. For more information about the Connecticut Green Bank, please visit www.ctgreenbank.com
About Operation Fuel
Operation Fuel was founded in 1977 after a worldwide oil embargo caused an unprecedented escalation in the price of home heating. Although federal and state governments had developed energy assistance programs for families experiencing poverty, low-income working families who were not eligible for government help and in crisis were left out in the cold.
To address the crisis in Connecticut, a collaboration among religious communities, industry leaders in banking, insurance, and utilities, Father Thomas Lynch, and Governor Ella Grasso created Operation Fuel, intended to provide relief for residents who fell through the gaps of government assistance programs. Our mission, is to ensure equitable access to energy for all by providing year-round energy and utility assistance, promoting energy independence, and advocating for affordable energy
VEIC is a sustainable energy company on a mission to generate the energy solutions the world needs. For over 30 years VEIC has been working with governments, utilities, foundations and businesses across North America to develop and deploy clean energy services that provide immediate and lasting change. With expertise in energy efficiency, building and transportation electrification, and new approaches for a clean and flexible grid, VEIC brings innovative solutions to the market. VEIC is nationally recognized for developing pilots and programs that optimize energy use, reduce energy burdens for low-income customers, and advance new technologies. In addition to our full-service consulting business, VEIC administers three large-scale sustainable energy programs: Efficiency Vermont, Efficiency Smart, and the DC Sustainable Energy Utility (DCSEU). www.veic.org.