Get ready for a summer of heat waves — and higher air conditioning bills
By Dr. Destenie Nock
According to CNN, when Americans open their electric bills this summer, it won’t simply be a matter of sweating over higher costs. For some, it will mean grappling with significant risks to their health and wellbeing.
An analysis by the National Energy Assistance Directors Association and the Center for Energy Poverty and Climate suggests that the expense of staying cool for Americans is set to surge nearly 8% to an average of $719 from June through September, compared to last year. That's a significant jump from the $527 average in 2019, leaving consumers grappling with yet another blow in an era of inflation and rising costs of living.
Certain regions of the US, such as the mid-Atlantic and Pacific areas, are expected to bear even steeper increases, with anticipated cost spikes of over 12%. Even parts of the Midwest won't be spared, facing jumps of around 10% for their energy bills.
Mark Wolfe, the association’s executive director, notes that while electricity prices have dipped slightly, the rising mercury will likely drive up AC usage, translating to bigger bills. The National Weather Service's forecast of above-normal temperatures across much of the country this summer only adds to the strain.
Yet, beyond financial strain, soaring utility bills can have additional grave consequences. Record-setting heatwaves, such as the scorching summer of 2023, have exacerbated heat-related health emergencies. Heat-related deaths are climbing, with over 2,300 fatalities recorded last year, a significant increase from 2021.
Despite these alarming trends, the US lacks a comprehensive strategy to mitigate the impacts of sweltering temperatures. Currently, the majority of federal funding for utility assistance is earmarked for heating, leaving many vulnerable households without adequate support for cooling needs.
Diana Hernandez, co-director of the Energy Opportunity Lab at Columbia University, emphasizes the urgent need to modernize energy assistance programs to address the growing demand for cooling, particularly among low-income families. She cites examples of individuals resorting to extreme measures, like forgoing air conditioning due to cost concerns. Destenie Nock, CEO of Peoples Energy Analytics and Professor at Carnegie Mellon University, has indicated that finding households early is critical to connecting them with energy-efficient technologies and bill assistance. These technologies can be life-saving—for example, by creating cooler indoor temperatures—and can help households lower their bills.
Compounding the heat-risk issue, federal assistance for utility bills has been slashed, leaving millions of households at risk. The Low-Income Home Energy Assistance Program (LIHEAP) saw its budget reduced from $6.1 billion to $4.1 billion, resulting in fewer households receiving aid and less coverage for arrears.
As a result, millions of Americans are falling behind on their utility payments, with combined arrears reaching billions of dollars. Disturbingly, many households report keeping their homes at unsafe temperatures due to financial constraints.
Additionally, only a minority of states provide protections against power shutoffs during summer heatwaves, with existing regulations often deemed inadequate by consumer advocates. This lack of a cohesive policy to address summer cooling needs raises concerns about preventable heat-related deaths.
Without meaningful action, the summer ahead threatens not just financial hardship but also public health and safety.
In the meantime, utility distributors are confronted with the challenge of helping customers with lower incomes and ensuring they have access to vital energy services. Research from the American Council for an Energy Efficient Economy has revealed that the vast majority of single-family and multifamily low-income households, minority households, those living in multifamily buildings, and renters experience higher energy burdens compared to the average household in their city. This underscores the importance of inclusive engagement for energy distributors.
By identifying and communicating with low-income customer segments, distributors can craft targeted campaigns that resonate with their audience, helping ensure access to essential services and laying the groundwork for equitable and impactful energy initiatives. These campaigns have been shown to boost participation in bill-assistance programs, for example.
How can these outreach campaigns be developed and implemented? Peoples Energy Analytics provides energy utility companies with tailored data analytics capabilities to efficiently identify, target, and address their customers' needs. The ability to proactively find and reach out to families that lack air conditioners and are experiencing financial strain ensures that programs are designed to provide impactful access with the right messaging directed toward the appropriate customers, maximizing satisfaction, revenue, and program impact while minimizing the effort required by utilities.