New Metrics: Assessing Energy Burden and Bill Impacts

Utilities are reorienting toward equity and seeking ways to address disparities through income-eligible offerings. They are identifying and tracking new metrics to better understand residents’ experienced benefits, such as energy savings, bill reductions, and increased comfort. For this effort, E Source focused on analyzing energy burden, which is the portion of household income spent on energy costs. The analysis of energy burden is complex, requiring substantial data and careful consideration of customer behavior, building performance, and conditions that may not be evident from energy usage alone. Tracking how energy burden changes over time adds further complexity.

E Source examined how to reduce energy burden, exploring the following questions:

• What level of energy savings is necessary to reduce an income-eligible customer’s energy burden?
• How does this differ for single family vs. multifamily customers?
• How does this differ for single vs. dual-fuel customers?
• Of the customers who may benefit from energy efficiency offerings, how many have already participated in such offerings? How many are eligible?
• What proportion of the population is being deferred from participating due to health and safety issues in the home?

E Source used data to model how energy burden changes in different scenarios to inform strategy and planning: 

• We utilized customer data and demographic research to identify and characterize subsegments within the income-eligible population.
• We analyzed evaluation data from HVAC and weatherization programs to estimate typical energy savings for different home types, and identified the portion of the population that had not yet participated in federally or utility-funded energy efficiency programs. Additionally, we used secondary data to assess housing issues and the costs of addressing health and safety concerns, to project how energy burdens could change if all homes were upgraded.
• We put everything together to assess impacts on household energy burden. We combined granular data, like the number of single family, multifamily, owners, renters, electric heat and gas heat customers, to model shifts in the energy burden at both the household (micro) level and the population (macro) level.

The availability of energy bill data entices utilities to consider using energy burden as a metric for evaluating the benefits of their offerings. But several factors complicate this, including challenges for single-fuel providers, differences in home conditions and income segments, the interaction between behavior and system performance, and the omission of non-energy benefits from efficiency measures like weatherization and heating upgrades.

When considering these factors in our analysis, E Source identified a number of important considerations for those looking to reduce the energy burden of income-qualified residents:

1. Consider sub-segments. Variability within income-eligible subsegments means their baseline energy burden can vary widely.
2. Embrace the complexity of behavior. Energy consumption is driven, in part, by customer behavior, and utilities will need to think through how to disentangle both the potential for and impacts created by energy efficiency offerings.
3. Explore intersections. Upgrades to weatherization and heating systems can provide additional benefits to customers beyond energy savings. For example, the growing interest in public health may provide utility and program administrators with an increased opportunity to identify and track health-related non-energy impacts, perhaps even integrating them directly into energy burden calculations.
4. Why go it alone? Creating cost-effective and meaningful shifts in energy burden for income-eligible customers can be challenging for single-fuel providers. Such providers could consider strategic partnerships with gas utilities to increase the impacts created in customer homes.