Energy Insecurity in Memphis

Memphis has the most burdensome energy costs for its residents in the United States.

The average household in Memphis pays 6.18% of their income on energy bills every year, according to a 2016 study by the American Council for an Energy-Efficient Economy (ACEEE), but this number soars to more than 25% of income for some low-income households.

High bills disproportionately impact the city's low-income households. For vulnerable community, high energy burdens are particularly acute and Memphis has the highest energy burdens for every vulnerable group:

• All Households: 6.2%
• Low-Income Households: 13.2%
• Low-Income Multifamily Households: 10.9%
• African American Households: 9.7%
• Latino Households: 8.3%
• Renting Households: 8.6%

Energy burdens are not simply the result of high rates. Memphis has some of the lowest electricity rates ($0.10/kWh) and average gas prices ($10.1/1,000 ft cubed) in the nation, but the highest energy burdens for all households.

The map below shows the geography of energy burden in Memphis, with the average energy burden by census tract for low-income households (0-80% of area median income).

Low income households are disproportionately impacted by high energy bills.

The map below shows the difference between energy burdens for low-income households compared to non-low income households. Move the slider to the right to see how energy burdens change by income.

High energy costs are a problem throughout the Southeast. Millions of Southerners struggle to pay their monthly electric and gas bills. More customers are cost-burdened in the Southeast 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.

The city's energy affordability crisis is rooted in historical racial and economic inequities, which still shape the region’s energy sector and circumscribe access to affordable power.

• The legacies of residential segregation continues to exclude communities of color from healthy and affordable housing.
• There has been little state or local action to stimulate the construction of energy efficient, affordable housing and to prevent displacement in rapidly growing areas.
• Policymakers and building industry trade groups have resisted strong energy codes that would provide minimum acceptable standards for new buildings. 
• Low-income communities face higher outdoor temperatures than other communities due to a lack of green infrastructure and the urban heat island effect, making it more difficult and expensive to cool their homes.
• In winter, some low-income utility customers are forced to use inefficient and dangerous equipment like an oven to heat their home.
• Power plants are disproportionately located near low-income and minority communities, placing these groups at a higher risk for chronic conditions like asthma. 
• Access to electricity, gas, and water can be shut off for nonpayment, even in periods of dangerous heat or cold. 
• Low-income tenants lack capital, and landlords control the quality of housing but do not pay the costs of energy inefficient housing.
• Low-income residents are functionally excluded from many utility-administered energy efficiency and renewable programs because they cannot pay the required upfront installation or equipment costs.
• Yet low-income customers must pay higher fixed fees on their utility bills to fund energy efficiency and renewable energy programs.
• Federal energy assistance programs have been chronically underfunded, and until 2006 state LIHEAP disbursements were calculated using a formula that gave preference to heating-dominant climates outside of the Southeast.

Renters must pay the high costs of energy inefficiency, but they typically do not have the ability to make changes to their housing that might improve affordability, health, and efficiency. This "split incentive" problem makes it more difficult for renters to realize the benefits of energy efficiency than owners.

The map below shows areas in Memphis with high energy burdens for renters and a high proportion of residents who do not own their housing.

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.

34% of all housing units in Memphis and West Memphis were built before 1980 (compared to 57% in the Southeast), before the first building energy codes - that mandate minimum acceptable standards for efficiency and safety - were developed. Another third of the city's housing was built prior to 2000.

As study conducted by the U.S. Department of Energy has found that Tennessee also has low rates of energy code compliance even in new homes - at least compared with comparable states in the region.

The map below shows the geography of housing age in Memphis by displaying the proportion of housing units in each census tract that were built prior to 1980. These areas are at high risk for energy burdens, but this is not the only indication of high energy burdens.

Although we would expect energy burdens to be highest in areas with the greatest proportion of vintage housing, energy burden does not strictly follow these lines in Memphis.

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

The map below highlights neighborhoods in Memphis where communities of color face high energy burdens.

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 residents of the Southeast and preventing the region from achieving parity with the rest of the United States.

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.

Inefficient and aging building stock put 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 suggests that there is a correlation between asthma prevalence and energy burden in Memphis by showing census tracts that have both a high prevalence of asthma as well as high energy burdens.

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

• Bring the state's/jurisdiction's building energy codes up to the national standard for efficiency.
• Allocate funding for training building code officials and enforcement.
• Ensure that strong energy efficiency measures are written into Qualified Allocation Plans (QAPs) used to distribute LIHTC funds.
• Forge partnerships between healthcare/insurers and housing/energy to provide low-income residents (especially renters) with resources to support retrofits that make homes more healthy and efficient.
• Have a state-level utility shutoff moratorium during times of high heat.
• Ensure that utility stipends for households using vouchers are calculated to cover high costs during the peak summer heating period.
• Support more robust funding for federal LIHEAP and WAP support, and provide streamlined one-stop services for residents seeking these services.

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.