More Hoosiers Facing Energy Insecurity During Pandemic

A growing number of Hoosiers, especially Blacks and Hispanics, are facing difficulties affording electricity during the pandemic, and the problem could soon grow worse.
October 9, 2020

An updated Indiana University study tracking energy insecurity in Indiana found that a growing number of Hoosiers are having difficulties paying their energy bills, a situation made worse by the COVID-19 pandemic and lapsing protections.

The IU O’Neill School of Public and Environmental Affairs study by professors Sanya Carley and David Konisky asked Hoosiers and other people in the US with low incomes about their ability to meet their household energy demands.

They found that nearly 4 million Americans, including a disproportionate amount of Blacks and Hispanics, could be having trouble meeting those demands, a situation known as energy insecurity.

Between May and August, 20% of people who responded to the survey said they could not pay their energy bill, 15% said they received a shutoff notice and 7% had their service disconnected.

Based on the responses received, the researchers said up about 3.8 million Americans could currently be facing energy insecurity.

“This is an issue that is quite prevalent and is kind of an unappreciated form of material hardship,” said Konisky. “The big inference to make from these results is that the pandemic and the economic dislocation that has resulted has really exacerbated energy insecurity. People who may chronically be suffering from this problem are more likely to face exacerbated problems, and there are probably new people who are being brought into an energy insecurity state.”

The researchers found that the people most likely to be struggling with energy insecurity are those living in poor housing conditions, households where someone relies on an electronic medical device and households with children under age 5.

The study also found that Black and Hispanic households face a disproportionate amount of energy insecurity.

The amount of Black and Hispanic respondents saying they cannot afford their energy bill is nearly twice the number of White respondents. About 14.3% of White respondents said they could not pay their energy bill, compared to 26.7% of Black respondents and 27.4% of Hispanic respondents.

The disparity was even greater among respondents who received a disconnection notice and had their service disconnected.

About 8% of White respondents reported receiving a disconnection notice, compared to 19.2% of Blacks and 26% of Hispanics. About 2.4% of White respondents said they had their service disconnected, compared to 8.2% of Blacks and 14.4% of Hispanics.

The data collected indicated that over the summer months, Blacks and Hispanics became far more likely to become newly energy insecure. Hispanics were over 15 times more likely to have their service disconnected, and Blacks were about 6% more likely.

“The effects based on race and ethnicity are quite prominent,” Konisky said. “You can see that Blacks, for example, are more than twice as likely to not have been able to pay an energy bill compared to Whites. Similarly for Hispanics, and even more striking, is the difference between Blacks and Hispanics and Whites on both receiving a notice and being disconnected. The racial disparities are really sort of front and center in all of the analyses we’ve been doing.”

The study also found only 38% of respondents reported receiving their COVID-19 stimulus check, officially known as the Coronavirus Aid, Relief, and Economic Security (CARES) Act Economic Impact Payment. The percentage of Black and Hispanic respondents was significantly lower, with only 30% reporting successfully receiving their stimulus checks.

Despite the sparse number of successful stimulus check receptions, the researchers said the CARES Act did help some people stay energy secure.

“The good news about the CARES Act is that it seems to have helped. For those people who actually received this support, it did reduce their chances of being energy insecure. The challenge is that not as many people received the support as probably should have,” said Konisky.

President Donald Trump recently halted negotiations for a new stimulus package before changing his mind. Negotiations are back on, for now, but could falter again. That outcome could affect energy insecurity rates as temperatures drop in the fall and winter months.

State-level protections, including ones put in place in Indiana, have lapsed, increasing the likelihood of more energy insecurity.

During the early months of the pandemic, states instituted some protections for energy insecure people.

In Indiana, Gov. Eric Holcomb signed an executive order in March that barred gas and electric utility providers, telecommunication providers and water and wastewater providers from discontinuing services to any customers during the public health emergency.

Those protections ended Aug. 14, and yearly winter moratoriums for some needy utility customers do not begin until Dec. 1.

The Indiana Utility Regulatory Commission ordered utilities in the state to offer extended payment arrangements of at least six months to customers until Oct. 12.

But, with no stimulus check likely in the upcoming months, paying for energy may become more difficult.

The unemployment rate is falling in Indiana and nationwide as Americans become accustomed to life alongside the pandemic, so the possibility exists that fewer Hoosiers will fall into energy insecurity.

Republican lawmakers at the state and federal level have argued that the transition away from fossil fuels and toward renewable resources, like wind and solar power, have made energy more expensive.

Utilities in Indiana like the Northern Indiana Public Service Co. and Indianapolis Power & Light have begun to retire coal-fired power plants and transition to natural gas and expanded their renewable energy sources.

More than 86,000 Hoosiers have clean energy jobs, or about five times the number of Hoosiers employed by the fossil fuel industry.

Carley and Konisky said they plan to conduct two more surveys to track energy insecurity, once in December and once in March 2021.

More Hoosiers Facing Energy Insecurity During Pandemic