What is the impact of energy burden in Vermont?

by Rebecca Foster, Director, Efficiency Vermont

When you run your dishwasher, turn on your heater, or fill up your gas tank, you probably aren't thinking how that energy got to Vermont. You probably aren’t thinking about where and how it was produced. But you might be thinking about what it’s going to cost you.

Most Vermonters interact with energy through their pocketbooks. For many families in Vermont, energy expenses compete with other needs like housing, food, and healthcare.

That’s what makes an energy burden calculation such a powerful way to gauge the impact of energy expenses on a household. Energy burden is a simple calculation of household spending on energy expressed as a percentage of income. It can be calculated for an individual homeowner or at a town, county, or statewide level. When Efficiency Vermont looks at the average energy burden in a town, it helps us understand which communities struggle with energy expenses. These communities benefit the most from reducing their energy bills.

There are a variety of metrics used to measure the success of an energy program. If you’re focused on saving electricity, then it’s all about kilowatt-hours (kWh). If it’s heating, British thermal units (Btu). If it’s transportation, the focus is decreasing vehicle miles traveled (VMT) and increasing miles per gallon (MPG). All of those metrics can be translated to greenhouse gas (GHG) emissions, which is critical to understanding our impact on the climate crisis. All of those metrics are important to describe how much energy is saved. But we also need to understand the impact of those savings on our friends and neighbors. That’s why we look at energy burden; it is a way to measure the impact of energy programs on Vermont families that are struggling with energy costs.

Efficiency Vermont published a new paper analyzing energy burden for each town in Vermont. The report shares some of the ways that we have shifted our programs to reach highly energy burdened households. This report builds on the first Vermont Energy Burden report, published back in 2016. It shows that Vermont’s energy burden is, on average, 10 percent for households in Vermont. That reflects around $5,800 in yearly energy expenses.

But the range of burden varies by town - from 6% to 20%. That reflects variation in both energy spending and household income statewide. Overall, income had a greater impact on energy burden than energy spending. The highest burdened towns statewide, in general, had low median income and near average spending on energy.

This information directly informs our program design work. If Efficiency Vermont programs target high electricity users regardless of income, they may focus on affluent towns with higher electricity use but not do enough to reach households with high burdens. Using energy burden as a filter for new and expanded programs can help us ensure that all Vermonters save money through efficiency.

We recently expanded or changed several of our programs to support the households most challenged by energy expenses:

  • In collaboration with the Vermont Agency of Commerce and Community Development (ACCD), we offer incentives to businesses who expand or move to rural or economically-challenged areas. The goal is to increase household incomes by supporting job growth in high-burdened communities.
  • We re-designed a program that provides free appliances to low-income Vermonters. Instead of qualifying households based on high electric bills alone, we are using energy burden to define eligibility. This ensures the program is accessible to the most impacted households. Already, we’ve seen interest and uptake in the program increase significantly.
  • As I wrote about earlier this year, we increased our incentives to help moderate-income Vermonters weatherize their homes. The new incentives provide up to $4,000 back (50% of the project cost). We also expanded the eligibility for 0% interest financing options to help homeowners pay for the rest of the project.
  • We launched a program with ACCD that brings enhanced incentives and direct outreach to four highly-burdened communities each year. In 2019, we have been working with Rutland, Bellows Falls, and Johnsbury among others. To select the communities we will serve in 2020, we are working with ACCD, VCRD, VECAN, GMP, VEC, and VPPSA and using the data from this updated report. We will announce the list of 2020 communities later this year.
  • We are helping rental property owners complete energy upgrades. About 80% of Vermont renters are low-income, according to the Vermont Housing Finance Agency. We are hopeful that new outreach tactics and programs to serve rental properties will improve energy burden.

Saving Vermonters energy and money is our commitment and our passion. We’re excited to have new information to help us design and measure our programs to ensure we’re helping all Vermonters. And we hope it can be useful to all our partners as we work together to transform our energy system.

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