Energy Insecurity in the South

The East South Central, South Atlantic, and West South Central census divisions have the lowest residential electric rates in the contiguous United States, at 11 and 12 cents per kWh, but some of the highest average electric bills, at $138, $131, and $127 each month.

Cooling loads are partly responsible for these high costs. However, they suggest that there are deeper affordability, infrastructural, and housing challenges in the South. This cost disparity also highlights the effects of longstanding policies that have favored keeping costs for generation and transmission low while investing little in demand-side efficiencies that would benefit consumers.

Millions of Southerners struggle to pay their monthly electric and gas bills. More customers are cost-burdened in the South than in any other part of the country, and more than a third of the region’s population has trouble paying their energy bills.

These Southerners live in a state of ENERGY INSECURITY, where they struggle to maintain vital energy services, like heating and cooling.

Energy insecurity is rooted in historical racial and economic inequities, which still shape the region’s energy and housing sectors and circumscribe access to affordable power.

From its inception, the South's energy system was intended for whites only. The legacies of this history still disproportionately prevent communities of color from participating in energy decision-making processes and accessing clean and affordable sources of energy.

The legacies of residential segregation continue to exclude people of color from healthy and affordable housing.

Housing segregation had existed in practice for decades before the 1910s, when white policymakers enacted the first racial zoning laws. Although these laws were declared unconstitutional by the United States Supreme Court in 1917, city officials throughout the South still found ways to write housing segregation into law.

By the 1930s, the federal Home Owners' Loan Corporation (HOLC) developed a series of maps that used the racial makeup of city neighborhoods to influence mortgage lending practices by denying mortgages in "hazardous" neighborhoods, which were predominately Black. These maps were key to the practice of redlining.

As the maps above show, neighborhoods that have a history of being racially segregated often struggle with high energy burdens today, reflecting the ways that the historical legacies of racial segregation still shape access to affordable energy in the South.

Housing and energy inequities have been compounded by policies and decisions in ensuing years.

The Southeast's aging housing stock leaves low-income communities without steady access to safe, healthy, and efficient housing that can be found at an affordable price.

53% of all residential buildings in the South were built before the nation's first energy codes - which require builders to meet minimum acceptable standards for comfort and efficiency - were developed.

 Half of all of the states in our region  use an energy code that was developed more than a decade ago, while other states are actively working to roll back energy codes that are on the books.

Weakening the region's energy codes will ensure that the next generation of market rate affordable housing will be less affordable, safe, and healthy for occupants than comparable homes built in other places.

Additionally, Southern states like Texas have a high proportion of manufactured homes that at best were built to a HUD standard from 1994. Manufactured homes built before 1976 were unregulated, and residents face a high likelihood of affordability challenges and associated health and safety risks.

Texas leads the nation in having the largest increase in the number of residents residing in manufactured homes since 2009, while other Southern states have seen significant spikes in manufactured housing.

One way to gauge the financial impact of high energy costs and energy insecurity on low-income households is by measuring the proportion of household income required to pay all energy bills, referred to as the ENERGY BURDEN.

Although low-income households use less energy overall, they have higher energy use intensities (EUI) and pay a disproportionate share of their income on energy compared with other households. On average, low income energy burdens are three times higher than energy burdens for higher-income households.

Energy burden disparities are stark in the South, where energy costs for low-income households can exceed 20% of household income and access to efficient building technologies and quality housing is sharply stratified by race and class. (HUD considers 6% the maximum for an energy bill to be affordable.)

Five of the top ten cities with the highest energy burdens for low-income residents are located in the South (Memphis, New Orleans, Birmingham, Atlanta, Dallas), where median energy burdens for low- and moderate-income households hover between 9% and 13% despite having some of the lowest electric rates in the country.

Only 88 counties in the South have an average energy burden that is deemed affordable for low-income households, while 1,229 have energy burdens that exceed the widely-used 6% affordability threshold.

As the map above shows, in most of the South there is a relationship between areas that suffer from high energy burdens and areas that have a significant proportion of low-income housing.

Use the slider below to see how the affordability of energy by county differs for low-income and non-low income consumers. As you move the slider from left to right, you see the difference between average county energy burdens for low-income households (left) compared to non-low-income households.

The map below puts these figures into human terms. Use the map to explore which counties in each Southern state have the average highest and lowest energy burdens for LMI households, as well as what these energy burdens equate to in terms of annual and monthly energy costs.

Studies show that Black Americans pay more for their energy than any other group in the US, even when other factors are taken into consideration. This is true throughout the South.

The map below shows that in many counties in the South, but especially in North Carolina, South Carolina, Georgia, Alabama, Mississippi, and Arkansas, energy costs are high for minority communities.

People of color in the South have less access to efficient housing or available resources that support reducing household energy use, and access to efficient building technologies is often stratified by race.

Research shows that while BIPOC households use less energy overall, they have higher energy use intensities (EUI) in their homes. This indicates that BIPOC households are at a higher risk of living in less efficient housing and pay a disproportionate share of their income on energy compared with other households.

In the map of metropolitan Atlanta below, predominately African American neighborhoods face some of the highest energy costs per square foot in the city, and this trend holds true in other cities in the United States.

Residents of Bankhead, in west Atlanta, pay $3.28 per square foot for their energy each year, while residents of Buckhead, in northwest Atlanta, pay $0.72 per square foot for their energy. That's a difference of nearly 5x for neighborhoods just a few miles apart.

The problems spawned by unaffordable energy ripple far beyond the region’s energy sector, contributing to the economic insecurity and health risks faced by millions of residents of the South and preventing the region from achieving parity with the rest of the US.

High energy burdens strain already-tight finances for low-income households.

• 15.4 million households in the South (35% of all households) report experiencing any energy insecurity, the most of any region in the United States.
• One out of three people in the South struggles to pay their bills month to month.
• 7.5 million households in the South (17% of all) are estimated to have received disconnection or stop service notices, and paying utility bills is one of the leading reasons people take out exploitative high-interest payday loans.

High levels of energy insecurity also strain the resources of utility companies due to mounting arrearages and disconnections.

• A recent study has found that even before COVID-19 60% of utility customers defaulted on their payment plans. This same study estimates that due to COVID-19 utilities are experiencing at least twice as many delinquent payments than normal.
• At the start of the pandemic,  the National Rural Electric Cooperative Association projected  that electric cooperatives will face $2.6 billion in unpaid bills by 2022 and a 5% decline in electric sales over the same time period (a loss of $7.4 billion in sales).

Inefficient and aging building stock puts residents - especially children - at a higher risk for chronic illnesses like asthma that can be exacerbated by pests, moisture, and thermal distress.

• 5 million households in the South (11% of all) have had to leave their home at an unhealthy temperature because of the cost of energy.
• 3.9 million households in the South (9% of all) are estimated to lack access to working cooling equipment in their homes, putting them at an elevated risk for heat-related illness.

The map below is an overlay of rates of emergency room visitations for uncontrolled pediatric asthma and energy cost per square foot in Atlanta, Georgia. It is clear that neighborhoods with the highest prevalence of pediatric asthma also faced the highest energy costs per square foot, indicating less efficient housing.

Looking at energy efficiency through the lens of health also suggests that new approaches are necessary to ensure buildings use less energy and provide safe havens for occupants.

The map below shows the overlap between areas with high energy burdens overlap with parts of Memphis, Tennessee that experience the most dramatic effects of urban heat.

The struggle to cool is only going to be more difficult in the face of climate change. The South is at a high risk for  “killer heat,”  according to the Union of Concerned Scientists. The number of days over 100°F will triple by midcentury, while days exceeding 105°F will increase from fewer than nine per year to more than six weeks. The health impacts of this heat will likely fall most heavily on low-income households and communities of color.

Energy efficiency can provide vital energy and cost savings for residential customers, while reducing their exposure to unhealthy conditions in the home.

Energy efficiency measures have the potential to bring an estimated $13 billion in annual savings for low-income households, a 30% reduction in utility bills each month.

Before any of these energy and cost savings can be realized, however, there are significant policy gaps in the South that must be closed.

• Building energy codes lag behind the rest of the nation in efficiency.
• States and jurisdictions have little funding to allocate for training building code officials and improving enforcement.
• Strong energy efficiency measures are not included in the Qualified Allocation Plans (QAPs) used to distribute LIHTC funds in many Southern states.
• There is too little funding dedicated to supporting the development of green infrastructure in low-income neighborhoods and providing cooling support in times of extreme heat.
• Healthcare/insurers and housing/energy stakeholders are siloed, though each are critical to policies that can provide low-income residents (especially renters) with resources to support retrofits that make homes more healthy and efficient.
• Most state PUCs do not require utility shutoff moratoria during times of extreme heat.
• Public housing authorities do not always consider high energy costs during peak summer cooling in calculating utility stipends for households using housing vouchers.
• Federal LIHEAP and WAP provide critical for weatherization and bill payment, but only have funding to reach around 20% of eligible households in a given year.
• Weatherization and bill payment do not offer streamlined one-stop services for residents seeking these services.
• Energy optimization and electrification policies are not currently coupled with robust bill payment and weatherization support for low-income communities to ensure that these energy transitions do not exacerbate existing inequities.
• Consumers who would benefit most from energy efficiency programs are often not aware of how to access the benefits of these programs.

Energy insecurity is a critical way to understand how the benefits and burdens of generating, transmitting, and consuming energy have not been evenly distributed across all groups of Southerners.

Energy insecurity is nested within energy equity, which also requires inclusion in the decision-making process and a reckoning with the intergenerational dimensions of the energy and housing sectors.

Contact William D. Bryan, Ph.D.

Founded in 2007, the     Southeast Energy Efficiency Alliance     (SEEA), promotes efficient energy as a catalyst for economic growth, workforce development, and energy security across 11 southeastern states. We provide research, consultation and education, stakeholder facilitation, program management and financial services to a diverse set of stakeholders in the energy sector. We believe that all people in the Southeast should be able to live and work in healthy and resilient buildings, utilize clean and affordable transportation, and thrive in a robust and equitable economy.