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Energy and Health on a Fixed Income

Paul Kando

Fixed-income households spend a higher percentage of their budgets on energy bills. Energy efficiency and renewable energy can help address this challenge. The US Environmental Protection Agency’s (EPA) Clean Power Plan (CPP), proposed last June to limit carbon pollution by existing power plants, will promote investment in energy efficiency through better insulation, lighting, and appliances, allowing people on fixed incomes to lower their energy costs without sacrificing service. Energy efficiency makes buildings healthier, safer and more comfortable by eliminating drafts and improving indoor air quality. It also lowers the system costs of the electric grid, reducing bills for all. It costs less than half to eliminate the need for a kWh of energy than to generate one in a power plant. In states that meet the CPP’s new energy efficiency standards, EPA expects electricity bills to drop by 8 %, saving about $100 per year for the average household. So much for claims that promoting efficiency and solar power will raise electricity rates!

The US already limits mercury, lead, sulfur, and other dangerous air pollutants. The CPP will deal with carbon emissions that hasten climate change. The best way to do this is by making our homes more comfortable using less energy, and using clean energy sources like wind and solar. Energy efficiency is the best energy investment for low- and fixed-income households and they can lower bills for all, by reducing the market price of electricity. In addition to saving money and reducing energy use, efficiency upgrades reduce operating expenses for landlords, lessen renter turnover, and increase property values – keeping housing more affordable. This is why rural programs like Kentucky’s How$martKY, allow low-income customers to pay for efficiency improvements through monthly installments added to their utility bills.

Energy efficiency and renewable energy insulate people from fuel price fluctuations and prevent bill shocks from price spikes. It enhances quality of life, indoor comfort and health. Health care costs exacerbated by pollution can eat up a large part of a fixed-income household's budget. Curtailing carbon pollution will help prevent up to 150,000 childhood asthma attacks, 3,300 heart attacks, 2,800 hospital admissions, 6,600 premature deaths, and 490,000 missed work/school days annually, according to the EPA.

Renewable energy systems are equally at home on rooftops and farmland, use no water and have minimal environmental side effects. While fuel costs account for up to 90% of the wholesale price of coal and gas generated electricity, wind and solar power have no fuel costs. High up-front costs have hindered solar in the past. One remedy is to pool resources. Green Mountain Power in Rutland, Vermont has been installing community solar systems on churches, TV stations, and food centers. There is also a 2.3 MW array on an abandoned landfill and a 150 kW array at the regional medical center.

Solar energy is also available through leaseholds or third party financing, with no up front cash investment by the consumer, making it possible for rural communities to revitalize by establishing solar and wind farms. Clean energy can only get less expensive while fossil fuels are getting more costly to produce. The CPP will increase the role efficiency and clean energy play on the US energy market, lowering costs and reducing fossil fuel dependency.

Coal interests claim that the CPP threatens their very existence. However coal use has been dropping for another reason: coal fired plants are being retired as cheaper power becomes available from natural gas, wind, and solar, and as households and businesses increasingly save energy and money through improving energy efficiency. Since 2000, dozens of coal-fired power plants have been retired and plans for over 180 new ones have been cancelled. Coal is becoming more expensive, is dirty and inconvenient. This lowers demand, even as coal exports from several countries converge on a shrinking market.

The coal industry’s concern for electric grid reliability is overstated. The CPP will require only a modest shift in resources. Many coal fired plants slated to close ran only 38% of the time last year and grid operators confirm that planned closures will occur without affecting grid reliability. The reliability of fossil fuels and the intermittency problem of renewable energy have also been exaggerated. Highly volatile natural gas prices contribute to volatile electricity rates – a major risk for fixed-income households. Diversifying energy sources minimizes this risk. Output from renewables is increasingly predictable. Fluctuations can be dealt with in a number of ways. Grid operators have already integrated more than 75,000 MW of wind and solar power into the grid while preserving grid reliability.

The fossil fuel guys are trying. How could I believe them when, on even a moderately sunny early spring day, my heat pumps heat my house and hot water at no cost, using power off my roof?