Everything is increasing for the low and middle class.
Housing-related costs are up because of a severe lack of inventory. So, too, are health care costs, because there aren’t enough affordable coverage options. Even car loans are reaching a breaking point with high-interest, subprime loans that more and more people are defaulting on.
We know these truths well because they’re widely reported, constant go-to talking points for lawmakers, locally and federally.
And these trends hurt those on a fixed budget, like the elderly. They also adversely impact those who can least afford to pay more, like families and households living at or below the poverty line with little or no wiggle room in their already razor-thin budget for even the slightest increase in costs.
But what about electricity costs?
For millions around the country, the costs of keeping the lights on and homes warm is also up – in many cases, a lot.
All this while America is amid an energy revolution that’s triggering a profound change in our ability to meet our daily needs with home-grown energy.
Why is this happening?
The root cause goes to a growing shortage in another necessity: the maintenance and expansion of America’s energy infrastructure, including pipelines.
This is important to various regions of the country that lack the pipeline infrastructure needed to safely and efficiently move the resources families and households need to meet basic home-heating and electricity needs on high-demand days without any resulting bottlenecks or grid reliability issues. Instead, the families who are already struggling to pay for food, clothing and shelter will continue to struggle as the cost of electricity increases with no recourse or alternatives.
Yet no one is talking about it, and they should be.
Per the Bureau of Labor Statistics, the bottom fifth of American households spent a budget-crushing 22 percent of their after-tax income on residential utility bills and gasoline in April 2016. That is a dangerously higher percentage than the 6 percent most experts deem as “affordable.”
Groundswell, a renewable energy advocacy group, recently reported that the bottom 20 percent of earners frequently spend nearly 10 percent of their income just to pay the electricity bill. The same analysis showed that more than half those households lived near the poverty line – and these extra costs are just for energy.
Now, add up all the trends from above and you’ll see how incremental cost increases can be a blow to family budgets.
It’s no wonder why the U.S. Department of Health and Services reported that about 23 million people required some sort of federal assistance to help pay for electricity or home heating in 2011.
And the cost burden worsens depending on where you live. Families and businesses in Massachusetts, Connecticut and California, for instance, pay over 60 percent more than the national average for electricity. The states that dot the U.S. Mid-Atlantic region – Delaware, Maryland, New Jersey, New York, Pennsylvania, Virginia, West Virginia and the nation’s capital – pay, on average, $233 more for electricity over a year than the national average. Wisconsinites chip in $196.37 more than the national average and Michiganders pay $265.75 more than the national average for their energy.
For cash-strapped households working hard to stretch every dollar, these ever-increasing costs often lead to the type of difficult decisions no family should have to make.
So, why aren’t we talking about it? Why are we not creating solutions?
The good news is that there is a way to help.
Instead of leaning on more reactive social services programs to help low-income families foot the bill, we need more proactive measures to make certain that future bills never get this high to begin with. That starts with green-lighting the build-out and maintenance of more pipelines, which are statistically the safest way to move energy. Studies continue to show that transporting resources via pipeline is 4.5 times safer than moving the same amount of energy across the same distance by other means, and over 99.999 percent of what’s moved through pipelines safely reaches its destination.
In addition to pipelines’ cost-cutting benefits and environmental advantages, they’re also economic treasure-troves for the communities they run through, regularly bringing in much-needed tax relief, great paying jobs, greater personal security, and increases in business spending.
But unless we support more investment in our energy infrastructure, none of this can materialize, leaving those less fortunate further behind, and the local and federal governments which often do not have the resources to lend a hand more in the red.
David Holt is president of the Consumer Energy Alliance (CEA).
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