Who Pays the Most? COVID-19, Utility Accessibility, and Race

By Madilyn Keaton, Energy Justice Project Consultant


Right now COVID-19 is the topic of conversation on everyone’s lips. The United States is facing a national emergency unlike any other in recent generations, with rising levels of unemployment, pockets of outbreaks, and increasing rates of food insecurity. Our mission at the Pennsylvania Utility Law Project has always been to ensure that Pennsylvania’s low-income residential utility and energy consumers can connect to and maintain affordable utility and energy services within their homes. But now, in the context of COVID-19, our mission has taken on even more urgency as families are forced to shelter in place. In this blog post, we will discuss utility access and health disparities in low income communities and communities of color – both prior to and during the COVID-19 pandemic.

Race and Utility Accessibility

Black and Latinx communities have always had a disproportionately high energy burden (percentage of income that a household pays for energy costs) and, consequently, have a disproportionately higher risk of utility termination for nonpayment than white communities. This is due to several reasons, such as:

1. A lower median household income

2. A lack of control over heating systems and appliances (e.g. renters)

3. Living in older, less energy efficient homes

High energy burdens are cause for serious concern and can lead to poor physical and mental health problems – especially for children. As researchers at Columbia University’s National Center for Children in Poverty concluded, “Children in moderately and severely energy insecure homes are more prone to food insecurity, hospitalizations and poorer health ratings, and developmental concerns.” Homes outside of a comfortable temperature range – or with mold or other environmental pollutants – can also increase incidences of chronic illness, including asthma, heart disease, respiratory illnesses, and arthritis. Worry over the affordability of utility bills can compound with other life stresses, creating deep and lasting negative impacts over the long term as well.

Race and COVID-19

With recent releases of data, it has become increasingly clear that communities of color have been hit hardest by the pandemic. People of color make up the majority of essential workers, including grocery store workers, janitors, and agricultural workers. Not wanting to lose their means of income, they continue to go to work despite the increased risk of exposure to the virus.

People of color are also more likely to be immuno-compromised, with a higher proportion of families living in neighborhoods with polluted air and water, and homes with mold, asbestos, lead, and other environmental contaminants – leading to higher rates of heart disease, asthma, and cancer. Additionally, the economic impact of COVID-19 in these households is even more profound, with loss of employment becoming a harsh reality for far too many families. When household income is lost, energy costs quickly begin to exceed what families can afford. The stay-at-home order complicates this problem by increasing the usage of necessities like energy, heat, and water, leading to much higher energy burdens than normal.

Policy Recommendations

Pennsylvania is in the process of crafting relief programs for those most affected by COVID-19, and these programs must address racial inequities as well by delivering accessible and uniform relief to all communities across our Commonwealth.

We recommend the following policy solutions to ensure health and safety for all of our neighbors. These recommendations, if implemented, would help protect our most vulnerable citizens from the health and economic impacts of the pandemic:

  • Extend and expand the mandatory moratorium on utility terminations. 
    • No one should have to shelter in place without access to running water, sewer, electricity, and heat.  These are basic human rights, and are essential to the health and safety of individuals and our communities.
  • Safely reconnect households that were previously terminated.
    • While many utilities are voluntarily reconnecting households, there are still some families that do not have active utility service. These households should be reconnected immediately. We recognize and applaud the Pennsylvania utilities that have already taken this important step, and urge others to follow suit.
  • Waive formal verification requirements for enrollment in assistance programs.
    • It is difficult to obtain proof of income when employers have been forced to close, and libraries are unavailable for printing and faxing documentation of income.
    • As an alternative, program administrators should perform third party verification over the phone to verify employment status, income level, household composition, or other common verification requirements.
  • Lift medical certificate renewal restrictions.
    • There should be no limit on the number of times a medical professional can issue a medical certificate to prevent loss of service to a household with a household member that is either seriously ill or requires utility service to treat a condition. 
  • Adopt reduced energy burdens for those enrolled in a Customer Assistance Program.
    • Currently, customers with income at or below 150% of the federal poverty level may be charged up to 17% of their income in some service territories – even when enrolled in CAP. 
    • The Pennsylvania Public Utility Commission acted in Fall 2019 to revise its policy statement to reduce energy burdens for CAP customers; however, only a few utilities have Petitioned the Commission to adjust their energy burden – and none have successfully implemented these reduced energy standard burdens. We urge utilities and the Commission to take the actions necessary to quickly adopt the new energy burden standards.
  • Adopt revised flexible payment arrangement standards.
    • Allow for new payment arrangements if previous ones have been broken, with the addition of long-term payment arrangements
  • Allow arrears accrued by customers enrolled in a Customer Assistance Program to be eligible for forgiveness. 
    • Customers enrolled in CAP are not eligible for a payment arrangement to help them catch up on their missed bills.  Receiving a discounted rate does not mean that a customer can necessarily keep up with their bills – especially given the unique economic burden caused by the pandemic. 
  • Allow utilities to use dollars obtained through fees, fines, penalties, settlements, or similar revenue streams to be used to support grant assistance programs.
    • Identifying alternative funds to support grant assistance programs is critical – voluntary donations of consumers is not enough to support the current need, and in fact are likely to decline as households experience financial losses across the board.
  • Waive all security deposit requirements for applicants and customers.
    • Charging a security deposit to a customer who has fallen behind, or who is seeking to reconnect to service, will serve as an insurmountable barrier for households already struggling to keep up with their utility costs. 
  • Waive late payment charges.
    • Utilities should not collect fees from households experiencing profound economic consequences as a result of the pandemic.

Further Resources

NAACP’s Utility Termination Policy Report “Lights Out in the Cold”

National Association of Regulatory Utility Commissioners’ COVID-19 State Response Tracker

Suspend Shutoffs of Essential Utility Services in Crisis (NRDC blog post)

Electricity Shut-Offs in a Pandemic: How COVID-19 Leads to Energy Insecurity, Burdensome Bills (Union of Concerned Scientists blog post)

NAACP’s Coronavirus Equity Considerations

What the Racial Data Show by Ibram X. Kendi

Energy Efficiency For All’s Policy Responses to COVID-19