Energy Equity Project helps disadvantaged communities benefit from the energy transition
The Energy Equity Project (EEP) at the University of Michigan School for Environment and Sustainability (SEAS) is focusing on multiple projects to bolster a just transition to a cleaner, more resilient energy system.
“We want to make sure frontline and BIPOC communities get a fair share of the benefits from the energy transition and a voice in the energy system,” Justin Schott (MS ’06), the EEP project manager and a SEAS lecturer, said.
According to Schott, BIPOC (Black, Indigenous and People of Color) communities historically have been left out of the energy transition because the energy sector echoes racial and class disparities in housing, education and economic development. These communities have not only felt the burden of fossil fuels, but also do not have access to many of the benefits of clean energy, such as green jobs, lower energy bills, cleaner air and resilience to climate impacts.
“It is a real problem that subsidies, like tax credits or rooftop solar, go to white and wealthier communities, while BIPOC communities can’t access clean energy benefits,” Schott said.
Schott believes that addressing energy equity is important because the impacts of being left out of the energy transition are greater than people realize.
“Being in energy poverty doubles the risk of poverty in general,” he said.
To address energy inequity, EEP is working on multiple projects to increase access to the benefits of clean energy solutions and ensure that they are distributed equitably, particularly to BIPOC and frontline communities.
Building on the Energy Equity Framework to measure and advance energy equity, which was released in September 2022, Schott and EEP have been working on additional initiatives aimed at increasing access to clean energy.
In May 2023, Schott testified before the Illinois Commerce Commission about rate hikes proposed by Peoples Gas Light and Coke Company (PGL) and Ameren, two Illinois-based investor-owned utilities.
Schott incorporated the Energy Equity Framework into his testimony to discuss the equity impacts of the PGL-proposed rate increases and recommend more equitable alternatives to them.
According to Schott, 27% of Americans experience energy insecurity, which is a customer’s inability to meet household energy needs.
Schott testified that low-income residents in Chicago would be significantly impacted by the rate hikes. Most of these residents are Black or Latinx and are experiencing inequitable energy practices.
In fact, in Illinois, 26% percent of households reported some frequency of foregoing other basic needs, 18% reported keeping the home at an unsafe or uncomfortable temperature, and 19% reported being unable to pay the energy bill in full, Schott said.
“The priority [of my testimony] was to make the case about human impact and injustices,” Schott said. “I wanted to show how [low-income customers] were disproportionately experiencing the impacts [of inequitable energy prices] and that there is a better way to do redistribution.”
According to Schott, after his initial testimony, the utilities responded with a rebuttal. This rebuttal included the argument that the utility companies did not need to provide significant discount credits.
“They were looking at a maximum discount credit of $20 to $30 per customer,” Schott noted. “We were arguing for an upper limit of $100 per customer in winter.”
According to Schott, after the commission heard his testimony, they were swayed to adopt the $100 maximum-credit discount, instead of adopting the proposal of a $30/month credit for the lowest-income households.
By adopting this credit discount, the commissioners established a discount that allows for household energy bills to be below 6% of household income, he noted.
According to Schott, spending 6% of household income on energy constitutes a threshold for affordability of energy costs. The 6% energy burden was established by considering that households should spend no more than 30% of their incomes on all costs of housing, and energy should comprise no more than one-fifth of total housing costs.
“For the lowest-income households, this will equate to a credit of 83% in Chicago,” Schott said.
Schott believes there is still work to be done to ensure low-income households achieve the maximum discount credit possible.
“Utilities still have to implement this in a year,” he said.
Schott hopes this case will serve as an important precedent for other states to consider.
“I think a lot of states will be considering this. Having this model is valuable anywhere in the country, especially for Michigan, which tends to look to its peers in the Midwest., he said.
The Energy Equity Framework also is incorporated into another project the EEP is working on. Energy justice is a core principle for both the framework and the Biden administration’s Justice40 Initiative.
Justice40 requires that at least 40% of the benefits of federal climate and sustainability investments benefit disadvantaged communities.
According to Schott, hitting the goal of at least 40% of the benefits flowing to disadvantaged communities will require efforts by these communities to engage residents. Yet, many of these communities have been historically excluded from similar programs for which they qualify and may not be aware that they are eligible.
EEP assisted six partner organizations in accessing Justice40 funding through the Justice40 Accelerator.
The goal of the Justice40 Accelerator, a nonprofit collaboration, is to share information, resources and capacity with cohorts of frontline community organizations in order to support them as they formulate projects and successfully apply to the federal funding opportunities presented by the Justice40 Initiative.
“The Justice40 Accelerator has supported 140 organizations in accessing federal funding coming from Bipartisan Infrastructure Law and the Inflation Reduction Act,” Schott said.
EEP helped its partner organizations, as one cohort, to coordinate and develop a proposal for the Justice40 Accelerator. EEP approached these organizations about submitting a group application.
According to Schott, the project lead, Center for Sustainable Communities (CSC), was selected and is one of a few teams in the cohort.
EEP is supporting CSC and others in developing an app to assist frontline communities in accessing Justice40 benefits through an adaptable digital platform. According to Schott, while programs like heat pump rebates or free workforce development programs are available to disadvantaged communities, there needs to be a relevant and robust effort to help residents navigate the path from awareness to enrollment.
“The app will make sure that frontline communities can have access to better information about workforce development opportunities and home energy rebates from the Department of Energy,” Schott said.
Developing this app is an important component of a current SEAS master’s project being led by Schott. According to Schott, there will be two outcomes of the master’s project. The first will focus on the technical aspect of building the app, “which will help to keep information current and use coding to scrape sites that are giving information,” Schott said.
The second aspect will focus on the app’s user interface. “There will be focus groups, including testing the app with residents, especially those who are not tech savvy,” Schott said. “We want to work with residents on design and make sure it is culturally relevant and user friendly.”
According to Schott, the master’s project and his Energy Justice class are good opportunities for SEAS students who are looking to get involved with energy equity.
“I hear all the time that there is an interest in working with organizations to do energy justice work,” he said. “If people are interested in this pathway, then we want to provide that training and leadership with frontline organizations to students, so that they are able to work with agencies and work with municipalities and utilities. A lot of people need energy justice training and that is where we come in to develop tools to do that work.”
Schott believes that the work of the EEP will be even more critical as the clean energy industry continues to change and grow.
“What has been so great about this work is these are all significant success stories with organizations that we have worked with,” Schott said. “You can start to see the balance tip towards community organizations and community-owned power. It is exciting to be a part of.”