Southerners spend more of income on utility costs

Southerners spend more of income on utility costs

February 28th, 2014 by Dave Flessner in Business Around the Region

Southerners enjoy cheaper power rates and milder climates than most of the country, but they still spend a bigger share of their income for electricity, according to a study released Thursday.

Appalachian Voices, a nonprofit conservation group, said higher poverty rates and less energy-efficient homes in the South combine to boost what the typical family spends on electricity and natural gas to 3 percent of household income. Nationwide, only 2.7 percent of family income is spent on such power expenses, even though electricity is priced nearly 20 percent higher throughout the United States as a whole than it is in the Southeast.

"With the cold weather in January, paying power bills is a real struggle for many Tennesseans this winter," said Ann League, Tennessee Campaign Coordinator for Appalachian Voices. "Too many homes are still poorly insulated, and using inefficient appliances continues to create a costly burden for many poor people."

For low-income families, electric bills can be as high as 20 percent of household income, League said.

The study found that Southeast families served by public power utilities such as rural co-ops spent on average 8 percent more on electricity than those served by investor-owned utilities in 2012, the most recent year for which data is available.

In those co-op areas, higher electricity rates, higher electric use because of inefficient housing and lower average incomes account for the higher monthly electric bills.

Rory McIlmoil, energy policy director for Appalachian Voices and author of the study, said the findings underscore the need for power cooperatives to offer more loans and other assistance to low-income households to make energy efficiency upgrades. In many instances, adding insulation, installing new heat pumps or converting to more efficient LED lights will save more in monthly power bills than buying and financing such equipment costs to install.

"Unfortunately, many people don't have the money and aren't able to borrow what they need to make these improvements that would really benefit themselves, their utility and the environment," McIlmoil said.

Appalachian Voices is pushing more power co-ops to offer loans through electric bills to finance energy efficient upgrades. The U.S. Department of Agriculture has new loan programs available for co-ops under the Farm Bill just adopted by Congress that could provide more money for such programs.

David Callis, executive vice president and general manager for the Tennessee Electric Cooperative Association, said most of the 22 electric co-ops in Tennessee participate in TVA's Energy Right program, which pays for energy audits and provides some loans to implement recommended energy upgrades.

"We're always looking at any energy efficiency measures that can benefit our members, and we're planning to meet with Appalachian Voices next month," he said.

TVA spokesman Duncan Mansfield said energy audits, either online or in person, provide customers personalized reports that break down the home's annual and monthly energy usage by appliance, and give a number of energy recommendations.

Participants who complete the survey receive an energy-savings kit that contains CFLs, filter whistle, water flow monitors and other items to help them save energy.

The Heat Pump Plan, one of TVA's longest-running efficiency programs, also gives residential customers access to on-bill financing for high-efficiency heat pumps. TVA requires borrowers to have a minimum credit score of 625 to qualify for the heat pump loans, but Mansfield said 72 percent of all applicants are approved.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340