State actions are critical both to address historical inequities and to ensure equitable benefits and burdens, especially in the area of energy. In a general sense, equity is just and fair inclusion. In terms of how we power our homes and our economy, equity is the fair distribution of the benefits and burdens of energy production and consumption. Energy justice is about social and economic participation in the energy system, as well as remediating burdens on marginalized communities.
For the majority of U.S. electricity customers, who are served by regulated utilities, decisions by state utility commissions affect energy equity and energy justice in profound ways — for example:
- Who can be disconnected for late payment of energy bills
- What costs utilities can include in retail rates and how costs are allocated to residential customers and other customer classes
- Which costs are recovered as fixed fees instead of volumetric charges (for example, per kilowatt-hour) — a key factor in determining whether customers can take action to reduce energy bills through energy efficiency and rooftop solar
- Access to energy efficiency programs and clean energy technologies
- What energy resources and infrastructure are built — and where
States are increasingly recognizing equity as a goal of utility regulation, going beyond traditionally stated objectives to ensure that electricity systems are reliable, safe, and fairly priced. But they are just beginning to grapple with how to achieve this goal.
- Chandra Farley, Partnership for Southern Equity
- John Howat and Jenifer Bosco, National Consumer Law Center
- Nidhi Thakar and Jake Wise, Portland General Electric
- Jean Su, Center for Biological Diversity
The authors propose a variety of approaches to address inequities in the electricity sector. Among its recommendations, the Partnership for Southern Equity focuses on the importance of involving impacted individuals, communities, and environmental justice organizations in program design and evaluation as well as utility resource planning. As Chandra Farley explains, "When we develop a shared understanding of equity, why it matters, and the circumstances that perpetuate inequity, we can advance equity in utility regulation and clear a path for Black people, communities of color, and rural and low-wealth communities to lend their perspective to the shaping of a more just and equitable clean energy future."
To illustrate historical inequities in allocating electricity system costs and benefits based on household income, race and ethnicity, the National Consumer Law Center uses data from the U.S. Energy Information Administration (EIA) to paint a sobering picture. For example, inequality is evident in the frequency of households forgoing other necessities to pay for home energy service (for all types of fuels), based on income (Figure 1), and how frequently households receive utility disconnection notices, by race (Figure 2).
Figure 1. Frequency of Forgoing Necessities to Pay for Energy Service, by Household Income
