10 Facts About Electricity Costs for Low-Income Families

High energy costs represent a significant burden for low-income households in the United States. These households typically spend about one sixth of their income on energy expenses, four times more than the proportion of income spent on energy by other households (U.S. Department of Energy, 2017). Low income families face many barriers to successfully managing their electricity use and costs. For example, they often do not have access to sufficient credit or discretionary income; 53% of borrowers in the U.S. take out their first payday loan to cover regular expenses like utility bills (Pew Charity Trusts, 2012). The U.S. Energy Information Administration (EIA) recently found that 31% of U.S. households struggle to pay the costs of meeting energy needs (Berry et al., 2018). Despite the existence of programs to help low income households pay their utility bills, only a fraction of those eligible ultimately receive assistance.

This report presents findings from our analysis of low-income Commonwealth Edison (ComEd) customers in northern Illinois, including Chicago. It is organized into two main sections. The first section describes the energy experiences of and challenges facing low-income households (e.g., how much electricity they use, their bill amounts and payment patterns, and disconnection risk). The second describes various programs, regulations, and household strategies aimed at reducing the energy burden for low-income households, such as the Low Income Home Energy Assistance Program (LIHEAP) and other forms of direct assistance, regulations around late payment fees, deferred payment agreements (DPAs), etc.