From “Utility of the Future” to “Place-Based Power”

Increasing numbers of households in the United States are low-income, and they are underserved by residential energy efficiency programs and face barriers to distributed generation and innovative rate design. Moreover, poverty is increasing. Low-income households tend to live clustered in communities, many of which suffer from disinvestment across the housing, transportation, and community development sectors. Given these geographically related challenges, the “utility of the future” must have a community-based approach. The “utility of the future” phrase describes changes currently underway or anticipated in the industry, including advanced metering, rate design, and distributed generation. To date, this framework has been highly technical and internal to the utility industry.

This paper makes the case for broadening the approach in order to serve more low-income households. Using research from Illinois and pilot program examples from Chicago and Minneapolis, this paper begins with (1) the current approach to energy efficiency and renewable energy by utilities in the United States and the simultaneous efforts by cities and local governments to lead on climate change policy; (2) demonstrates evidence that low-income households face several barriers to existing utility approaches; and (3) recommends a new framework, “communities of the future,” in which utilities, cities, and nonprofit partners work together to connect low-income households to renewable energy, advanced rate design, and energy self-sufficiency while meeting city-level climate goals and breaking down utility program silos.