Energy is a fundamental resource for every American. Yet inflation and the rise in commodity goods and utility costs are forcing many to have to make unfathomable decisions, like “do I buy enough groceries this week to feed my family or cut back to pay my utility bill?” This reality is especially hitting hard for those already in a fixed or low-income situation.
According to the U.S. Department of Energy, nearly 44% of U.S. households are defined as low-income. These households also have an energy burden three times higher than non-limited-income households. Fortunately, bolstered by the Justice40 Initiative and legislative actions such as the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA), new, meaningful assistance and investments will be made to help disadvantaged households and communities afford the energy they need.
A key example is the Home Electrification Rebate program that is making $4.5 billion available through state energy offices to help low-or-moderate income (LMI) households make energy efficiency investments such as weatherizing their homes or installing heat pumps. Additional eligible participants include owners of multi-family units with greater or equal to 50% LMI occupants and any “government, commercial, or nonprofit entity” carrying out a qualified electrification project on behalf of these LMI customers.
Utilities must take an active role in the solution
While these initiatives are an important step in the right direction, significant work remains to help LMI customers simply be able to keep their lights on or stay cool as we endure the heat of summer.
Oracle Energy and Water’s Opower group conducted a survey of utility customers who were likely eligible for the federally funded Low-Income Home Energy Assistance Program (LIHEAP). The findings revealed that nearly 86% of respondents were worried about affording their utility bills, 64% had received a shut-off notice within the last year, and 56% had paid their utility bill late more than three times over the last year. While resources exist to help, many households have no idea where to start.
Opower found that consumers don’t think of their utility as a primary place to seek assistance. Instead, more customers look to family and friends or online searches for help with their utility bills, with only about a third of customers saying they would contact their electricity or gas company looking for help.
This data underscores the vital opportunity utilities have to become a more trusted advisor to customers and part of the solution. They can help their most vulnerable customers save money by providing them with information and tools to better manage their energy use and direct them to available energy assistance programs they have no idea even exist.
Is decarbonizing making affordability worse?
With investments in clean energy infrastructure putting more and more strain on household energy bills, decarbonization threatens to make the affordability gap worse. The move to add distributed energy resources and harden the grid come at a cost to customers. Those same customers are often then ones that can’t take advantage of solutions like rooftop solar to help. The need to approach affordability efforts in the right way has never been greater. To help achieve maximum results, utilities need a new approach to the problem, informed by core elements such as energy usage information, advanced analytics, and proven customer engagement techniques.
Opower continues to introduce new solutions to help utilities bring artificial intelligence (AI) and behavioral science into the customer experience to reach LMI customers both at scale and on an individual level. With this approach, utilities can reduce emissions, improve affordability, and provide better customer service all at once by:
Using predictive analytics to find more customers in need: The first step is more accurately identifying customers in need. Utilities often rely on incomplete or out-of-date data to identify and reach limited- income customers. By applying predictive analytics to energy usage, census-tract data, third-party, customer-provided data, and other proprietary data, companies can better identify financially vulnerable customers and predict program eligibility. Using this method, Opower found 78% more limited-income customers for one Northeastern utility to reach with billing assistance and efficiency programs than the utility had identified using traditional methods.
Sending the right messages to increase awareness and adoption: By delivering personalized messages throughout the year that influence people to act, utilities can reach customers with program offers long before they face the risk of being disconnected. Adding affordability insights and recommendations can further tailor the experience for limited-income customers through home energy reports, high bill alerts, and weekly energy updates.
Enabling faster, easier enrollment in energy affordability programs: Customers often are uncertain about whether they qualify for programs and how to enroll. By using technology to aggregate a one-stop programs shop for customers to visit based on their data parameters, utilities can increase enrollment in assistance programs.
How Baltimore Gas and Electric is leading the way in reducing energy burden
Baltimore Gas and Electric (BGE) in the Mid-Atlantic region has been a pioneer in demonstrating how utilities can empower their customers to make sustainable changes that make energy more affordable for their most vulnerable customers. BGE is Maryland’s largest natural gas and electric utility, delivering power to more than 1.3 million electric customers and 700,000 natural gas customers. The utility has worked tirelessly so that low-income customers have the tools and resources needed to reduce energy usage and save money on their utility bills.
BGE offers rebates, discounts, and free home energy assessments to optimize energy efficiency through its EmPOWER Maryland portfolio of programs. BGE also helps customers access available energy assistance programs and services offered by their local government and other agencies.
After identifying nearly 200,000 customers eligible for Office of Home Energy Programs (OHEP) financial assistance but who had not previously applied for the assistance programs, Opower helped BGE develop personalized videos to lead customers to the BGE Assistance Finder tool that helps customers find, understand, and apply for energy and financial assistance programs that best fit their customers’ needs.
“Providing world-class customer service is a strategic priority for BGE, and our limited-income customers are a key focus area,” said BGE Manager of Energy Efficient Programs Sowmya Krishnamoorthy. “The work Opower is doing today to engage with these important customers is good for our communities and our business. This can help us reach more people on a personal level and help us meet their needs.”
BGE has also implemented an AMI Weekly Usage Alert pilot program and delivered tailored insights and messaging to more than 100,000 limited-income customers showing a consolidated view for electric and gas energy usage. Customer engagement with the reports is showing nearly 1.2 million opened emails and 80% of customers are finding the information useful. BGE continues to study program enrollment impacts.
Progress requires continued innovation
Technology, including AI, disaggregation, and behavioral science will continue to play a progressively critical role in helping utilities not only deliver the reliable, and resilient clean energy that powers our world, but to also do so more affordably. BGE’s programs show the power of what’s possible in achieving real progress to help address the energy burden. The utility ecosystem must continue developing analytics-driven strategies and LMI-focused solutions with effective customer identification, engagement, and enrollment at their heart. By doing so, we can all help turn today’s pilots and projects into tomorrow’s core programs with ever-increasing impact.