By Tyneshia Griffin (she/her)
Environmental Policy Research Analyst
Everyone should have access to clean, affordable, and efficient sources of energy. However, across the nation and in Virginia, Black, Latinx, and low-income families pay a higher percent of their income on electric bills than average median income households in the same cities. This legislative session, the General Assembly has the opportunity to pass the Fair Energy Bills Act (FEBA), bipartisan bill carried by Delegate Jay Jones and co-patron, Del. Lee Ware, which will help address the unfair energy burden faced by Black, Latinx, and low-income households in Virginia. This issue was just illuminated last fall in the Governor’s Executive Clean Energy Plan.
Energy burden, a key measure of energy affordability, refers to the percentage of a gross household income spent on electric utility costs;and in Virginia, the average monthly residential bill is the 7th highest in the United States. Low-income, Black, and Latinx households have been found to have the highest energy burden across 48 of the largest U.S. cities.
Nationally, low-income households (7.2 percent), African-American households (5.4 percent), Latino households (4.1 percent), and low-income renters (4.0 percent) have the highest energy burden. In 2013, African-American households in Richmond and Virginia Beach paid eight percent and ten percent of their household income towards energy cost, respectively. Latinx households in both Richmond and Virginia Beach paid about six percent of their household income towards energy cost. Meanwhile, median income households in Richmond only paid around three percent of their households income towards the same expenses and median income households in Virginia Beach paid closer to four percent.
The implications of high energy burden include unhealthy and uncomfortable living conditions as well as increased stress and cases of respiratory disease. These unfortunate circumstances can result from families voluntarily reducing their energy consumption by not sufficiently heating, cooling, and lighting their homes and avoiding the use of certain household appliances. Additional economic trade-offs can include refraining from purchasing foods and paying for medical care.
State policy that permits unaffordable rate design practices including fixed utility charges, such as in Virginia, is one of the known drivers of higher energy burden. As the average Dominion residential electric bill has increased by roughly 30% or $300 every year since 2006 due to drastic changes to electric utility law, households have been overcharged by Dominion Energy beyond authorized profit levels. For context, since electric base rates were frozen by electric utility law passed in 2015, Dominion Energy has overcharged customers by over $1.3 billion.
FEBA begins to address these energy inequities in Virginia by restoring the State Corporation Commission (SCC) with its full regulatory authority in Dominion Energy’s 2021 rate case. This proceeding will allow the SCC to review the utility’s over earnings, assess overcharges put onto customers, and direct the utility to issue customer refunds, and lower base rates to prevent future overcharges. The SCC is Virginia's regulatory agency for public utilities and has appointed commissioners who use rate cases to set electric bill base rates for utility customers.
Low-income, Black, and Latinx families in Virginia should not have to bear greater economic burden to pay energy costs in an unfair energy economy, while monopolies like Dominion Energy make millions in over earnings annually. FEBA is a first step, among many during this legislative session, to improve the equitable implementation of Virginia’s electric utility laws and regulations. This type of policy is critical to protect the right of low-income, Black, and Latinx households to clean, affordable, and efficient sources of residential energy.
FEBA passed with bipartisan support in the Virginia House of Delegates by a 77-23 vote more than two weeks ago. Now, the bill is waiting to be heard in the Senate Commerce and Labor Committee, which will meet again next Monday. This will be the last opportunity for the committee to take action on this bill this legislative session to advance the bill to the Senate floor.
To read our Ten Year Vision for Democracy, Justice, and Progress, please visit https://www.newvirginiamajority.org/tenyearvision