Why the Intersection of Health, Energy, and Equity is the New Utility Challenge

Posted May 4, 2021 By Liz Kelley

As an anthropologist, I have spent my career studying human behavior. This includes spending countless hours inside people’s homes, observing and listening to utility customers describe their relationship with energy. In forcing us indoors, the pandemic has emboldened leaders in our industry to take a second look at the confluence of health and energy. In this new era of energy equity, utilities and program administrators have a generational opportunity to adopt a holistic approach that takes on energy affordability as a symptom of a larger condition.

This blog was inspired by my recent conversation with ILLUME Founder, Anne Dougherty, and ILLUME Senior Analyst, Emily H. Morris. Want to catch our podcast in its entirety? Click here to listen to Best Practices in Health and Energy Programs.

Our Research

ILLUME recently supported a utility client through a secondary research literature review that looked at the health and energy nexus, and the ways program initiatives are creatively bridging the two. We reviewed 42 programs and utility offerings doing this type of work and highlighted nearly a dozen programs making inroads. We looked at evaluation reports, literature and systemic reviews, conference presentations, and academic research (where a substantial body of work on energy, and health outcomes and impacts already exists). Though we cannot share specific findings in this blog, we hope our framing of the benefits for customers and utilities creates conversations that may inspire a second look.

Societal Benefits

Though utilities are not providers of human services, addressing energy affordability is a key lever for utilities to deliver societal impacts.

  • One direct benefit of improving health outcomes includes improved indoor air quality and/or increased thermal health, which can have a direct effect on reducing healthcare expenses.
  • Another important benefit? Increased customer tenure in their homes. Greater energy affordability can begin to rectify longstanding issues resulting from redlining.
  • There are also potential benefits from efficiencies in service provision to customers: Think time saved in labor delivery. Instead of having to coordinate with multiple trade allies (weatherization visits, pest inspection and mitigation, carpet removal) customers would benefit from service calls that combine contractors. ILLUME recently conducted an ambitious qualitative research study of nonparticipants in Massachusetts, and learned that for households, especially those with lower incomes, signing up for a program is often a luxury of time and headspace that customers cannot afford.

Benefits to Utilities

The social benefits of health and energy programs are not limited to utility customers alone; utilities too can benefit through:

  • Access to a wider range of customers through program designs that enable weatherization teams to address health and safety concerns that can be a barrier to program participation.
  • Increased resources. The federal government has laid out an ambitious agenda to preserve and retrofit energy efficient, and electrified housing units which may offer utilities and program administrators an opportunity to tap into new funding and alleviate pressure on state budgets which took a hit during the pandemic.
  • Improvements in cost-effectiveness calculations: Non-energy impacts (NEIs) are not equally integrated into energy efficiency program evaluations across the country—but as public utility commissions start to incorporate NEIs into energy efficiency cost-effectiveness testing—we may see improvements in cost-effectiveness calculations of energy efficiency programs once we factor in social benefits such as improved health outcomes.
  • Casting a wider net allows utilities to not only serves more customers, but creates greater alignment with a utility’s ESG goals.

Centering Equity

The disproportionate impact of COVID-19 on Black and Brown communities has unearthed troubling health inequalities. Energy efficiency program nonparticipation due to health and safety issues in otherwise eligible homes hints at the deep and interconnected nature of generational poverty, historically disadvantaged (and underinvested) communities, and structural racism—and this is just in the context of eligible housing stock.

“While the energy efficiency upgrades were largely beneficial to participants, they alone may not be sufficient to address all of the energy insecurity issues facing low-income households. In most cases, the systemic nature of the cited problems is beyond the reach of energy efficiency upgrades and would require more intensive housing and policy interventions.”

(Hernandez and Phillips, 2015).

Broadening Interventions

Although weatherization and energy efficiency programs can open a space to move the needle on equity, these efforts are often limited in the number of homes they can serve due to health and safety concerns associated with remediation. Disinvestment in communities that has taken place over decades of redlining, discrimination, structural racism, and financial disinvestment requires solutions that extend beyond the reach of the utility. We need to improve our work at a systems level to integrate health into energy efficiency programs, which are funded through dollars by energy bills and must remain cost effective and demonstrate savings. Energy efficiency programs alone may not be adequate to address all equity challenges, but when paired with other funding streams, may have a greater impact in rectifying the historic harms that impact disadvantaged and vulnerable communities.