Report finds burden of energy costs in DC is most severe in wards 7, 8
Residents of wards 7 and 8 have some of the highest energy costs in the District when compared to their incomes — a burden that needs to be taken into account as the city works to decarbonize its transportation and building sectors.
That’s according to a recent report commissioned by DC’s public advocate, the Office of the People’s Counsel (OPC), which also concluded that nearly one-third of the city’s residents live in what could be considered an “environmental justice community.” For this report, a DC-specific environmental justice community was defined as a neighborhood with 20% or more of its residents living at or below the federal poverty line as well as identifying as a race other than non-Hispanic white. In Ward 7, 68% of residents fit both criteria; in Ward 8, the figure is 83%.
Typically, “the most vulnerable communities suffer the first and worst impacts of climate change,” such as increased exposure to air pollution and other environmental hazards, the report states. This gap in equity is often a result of historic racism.
“The People’s Counsel is very concerned about the climate crisis facing DC and the energy burden, as we know that low-income and communities of color face disproportionate climate change impacts right here and now,” Sarah Kogel-Smucker, OPC’s environmental and climate attorney, said in an interview. “Part of community resiliency is being able to afford to withstand the changes that are coming from climate change.”
While median household income in 2021 amounted to $47,506 in Ward 7 and $36,946 in Ward 8, annual energy expenditures in those areas of DC that year added up to around $2,250 and $2,220, respectively. That means that Ward 7 households spent roughly 4.74% on energy needs that year, while Ward 8 homes spent just over 6% on the same necessities. (Completed in December, the report is based on the ward boundaries in effect prior to the redistricting that took effect Jan. 1.)
That energy burden — the amount of money spent on energy needs in proportion to actual income — is more taxing on lower-income wards than wealthier parts of the city.
In wards 2 and 3, for example, median household incomes in 2021 were $116,425 and $134,881, respectively. But annual energy expenditures that year were $1,330 in Ward 2 and $1,950 in Ward 3, meaning that homes in those areas spent just 1.14% and 1.45% of their annual salaries on energy needs.
And even without taking into account the proportion of income to energy bill costs, households in every ward except Ward 4 paid less in absolute dollars than wards 7 and 8. The report’s authors conclude this could be mitigated with increased community input, but they don’t provide a comprehensive explanation for the discrepancy in absolute energy costs.
By comparison, a September 2020 report published by national nonprofit American Council for an Energy-Efficient Economy (ACEEE) found that the median energy burden for all District households at that time was 2%.
Critically, the OPC report explained that ward-based energy-burden distinctions don’t fully account for the most extreme cases of inequitable energy expenditures that weigh down some families.
“Among low-income District residents, half of households pay more than 7.5 percent of their income in energy costs (a household making $75,000 annually pays $470 per month) and one in fourteen of District residents are ‘severely’ energy-burdened — meaning they pay more than 10 percent of their income in energy costs,” the report continued, citing the ACEEE publication.
Further, OPC’s report pointed out that wards 7 and 8 have the highest percentages of “racial/ethnic minority” populations and lowest number of college graduates in the District. That correlation, they noted, mirrors the situation nationally when examining the inequitable energy burdens facing non-white communities.
The authors of the report — Applied Economics Clinic, a Massachusetts-based nonprofit consulting group focused on energy, environment and equity — contend that officials need to take greater care to incorporate community concerns through improved outreach and resident input in their decision-making related to decarbonization goals.
Currently, District officials intend to achieve net-zero greenhouse gas emissions by 2050 and other related reductions.
While this recent report focuses on the District, the impact of utility energy burdens on vulnerable communities is a national concern. A June 2020 working paper published by the University of California, Berkeley posited that low-income Black households in the United States pay “significantly” more to heat and power their homes than white households. Specifically, the researchers found that even after controlling for certain socioeconomic factors, Black renters paid $273 more in annual utility costs than their white peers.
Other research has shown that “low-income households, Black, Hispanic, Native American, renters, and older adult households all have disproportionately higher energy burdens than the national median household.”
The authors of both research projects suggested that improved energy efficiency and at-home weatherization programs could potentially mitigate some of the discrepancies.
“We think it’s incredibly important to analyze potential cost impacts, but it doesn’t mean that we shouldn’t do” a program that helps reduce emissions, said Kogel-Smucker, noting the importance of making every new program as cost-effective as possible and using funding sources other than rate hikes. “We absolutely need to solve the climate crisis and have the programs in place to do it, but we need to do it equitably, justly and affordably.”
Kogel-Smucker suggested that utility bill surcharges could be another way to fund new decarbonization programs but wouldn’t specify who should pay those surcharges, saying that “it really does depend on the program, who’s participating, who benefits, how it’s being structured, [and] what the investments are over time.”
Specifically, the report authors want city officials and the DC Public Service Commission, which regulates monopolistic utilities in the District, to listen to vulnerable and impacted community members while designing and implementing electrification programs. Such initiatives aim to replace equipment that directly runs on fossil fuels with machinery or systems that rely on electricity. While that same electricity might itself be produced by fossil fuels, “technologies that use electricity as a fuel source result in lower carbon dioxide emissions on average than those that use fossil fuels directly,” according to Resources for the Future, a DC-based research nonprofit.
The report also highlights the need for officials to ensure that environmental justice neighborhoods are prioritized for new electrification investments but are not forced to bear an inequitable share of energy expenditures. That might involve utility and government officials attending more community meetings, distributing informational pamphlets, or creating advertisements, OPC spokesperson Doxie McCoy suggested in an interview.
The report further explains that vulnerable communities already face more barriers to decarbonization and “are often on the frontlines of climate change impacts like flooding and heat waves.” This disadvantage, frequently due to systemic racism that forced lower-income communities of color to live near industrialized or polluted areas, requires a fair distribution of costs among ratepayers that doesn’t place a disproportionate burden on those least able to afford it, according to the authors.
Kellie Didigu, a communications officer with the DC Public Service Commission, did not respond to a request for comment on the report’s findings.
Areas “that exhibit one kind of vulnerability — such as low income — are more likely to have other vulnerability characteristics, like high poverty rates or high shares of racial/ethnic minorities,” the report explained.
Some jurisdictions define environmental justice communities with only one criterion, such as income parameters or racial demographics. But the OPC report authors decided to require both criteria because otherwise most of DC would have been considered an environmental justice community, Elizabeth Stanton, director and senior economist with the Applied Economics Clinic, explained in an interview.
Inequitable energy burdens aren’t the only way that environmental justice communities are oppressed. Additional environmental hazards, such as various sources of pollution or lack of clean transportation and energy services, also add to the burden residents of these neighborhoods face, the report noted.
Additionally, as DC transitions away from its current reliance on fossil fuels, the decreasing number of gas utility customers “will be left holding the bag,” meaning households that already have excessive energy burdens will need to spend even more money to preserve gas-related infrastructure, the report cites.
The District does have numerous financial assistance programs aimed at reducing what low-income Washingtonians pay out of pocket for their energy bills. And local and federal financial assistance programs are available to help eligible residents pay their energy bills.
Yet in wards 7 and 8, while over half of residents qualify for federal energy assistance, only a third of those eligible are enrolled in the program, according to the report. It’s unclear in the report whether such financial assistance is included in the calculation of a ward’s residential energy burden.
While energy assistance programs are critical, they shouldn’t be the only mechanism used to address energy-related financial hardship, OPC’s Kogel-Smucker said: Financial aid needs to be coupled with minimizing the amount of money that low-income residents owe for their utilities in the first place.
“Assistance programs are very important and help people keep their heat on during the winter,” Kogel-Smucker said. “But no program has 100% participation of those eligible. And so to look at the real impact of electricity and heating costs and cooling costs on a household, [minimizing the factors that contribute to] the energy burden is a very important factor.”
Ward 8 Community Economic Development, an independent neighborhood organization, has drawn up recommendations related to top environmental issues identified by residents; however, the energy-burden issue wasn’t mentioned. According to the group’s founder and facilitator, Mustafa Abdul-Salaam, that may be because the issue is by and large intermittent — he noted that utility affordability concerns are most prominent in the summer cooling and winter heating seasons — and because it’s just one of many environmental injustices imposed on his community.
“If you can [speak with] them in the middle of winter and for whatever reason they don’t have heat in their house, then that will surface to being a top priority,” explained Abdul-Salaam. “People in communities that are under-resourced tend to go from one crisis to the next.”
Abdul-Salaam, also an advisory neighborhood commissioner for single-member district 8C05, wants to see more education directed toward Ward 8 residents regarding the programs they’re eligible for, but he is skeptical about the effectiveness of government officials incorporating community feedback into new programs or policies. He would rather see “bottom-up programs” that enable the community to address problems themselves, as exemplified by the dispersal of a universal basic income to help address the energy burden.
“Top-down models have never really demonstrated effectiveness, but we keep doing it because it’s convenient and we don’t know any better,” said Abdul-Salaam. “When you do bottom-up, you get the community engaged in a way they take ownership … so they can improve the quality of life.”
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