Advancing Energy Equity and Climate Solutions in Chicago

Briana Parker works at Elevate, a community-centered organization focused on fighting for policies that help people keep the lights and heat on. For 4.8 million American households facing energy insecurity in the country, cost surges – up to 30% this winter for gas-powered heat – are a growing crisis.

Nationwide, low-income households experience an energy burden (the percent of household income spent on electricity costs) up to 3 times higher than high-income households. In Chicago, a quarter of low-income households pay over 15% of their annual income on electricity bills – far above the national average and the type of expense that could result in insurmountable financial stressors. “I’m very conscious about what I buy in the stores and places like that. You have to be selective when you’re living on a fixed income – very much so,” one resident told Elevate in a 2018 report on energy inequity in Chicago.

With intensifying media rhetoric about gas prices and imminent winter energy needs, the Biden administration is facing mounting pressure to make policy moves that stabilize energy prices. In an initial response last month, the administration struck a deal with the Organization of the Petroleum Exporting Countries (OPEC) to release more of the world’s oil reserves for American use to match skyrocketing demand.

But policy experts say those solutions are mere band-aids for a systemic problem. The United States’ volatile dependence on fossil fuels is causing rollercoaster-like shocks to energy costs for individual households. Unaffordable energy prices, pollution-related illnesses, and factors that prevent heat and electricity reliability force low-income communities to carry much of the fossil fuel burden. This is particularly true in Chicago.

According to the American Lung Association, the City of Chicago is still the 15^th most polluted in the country – a result of coal-fired power plants and other fossil fuel infrastructure pouring soot into communities. Yet, in a clear display of environmental injustice, the same households experiencing disproportionate levels of pollution and the highest energy costs are actually the ones emitting the least greenhouse gases on an individual level.

Public policies can begin to address inequitable energy costs by reducing reliance on fossil gas – a driving force behind price volatility. Ensuring low-income and housing-insecure communities can access cleaner, more affordable, and more reliable sources of home energy can also help combat the crisis, consumer protection advocates say. Elevate and other organizations across the country are fighting for policy shifts to make these solutions more accessible – focused on tackling the intersectional issues of environmental health and energy affordability.

Right now, while programs exist to incentivize distributed energy sources like rooftop solar and energy efficiency measures like weatherizing homes, the funds can be particularly difficult to access for renters. What’s more, clean energy technology and efficiency measures too often have unaffordable upfront costs, even when rebates exist. “People having a place to stay – housing – is core to these issues. You need to qualify for loans or money to access rebates,” said Parker. “In so many ways, it costs so much to be poor.”

Investment in clean energy technology and energy access are core parts of the Biden Administration’s Build Back Better Act. Included in the bill, the Justice 40 Initiative compels federal agencies to work with states and local communities to ensure that 40% of the overall benefits from federal investments in climate and clean energy go to low-income communities.

It is a welcome shift in energy transition work and a sign, Parker hopes, that funds for environmental justice initiatives are actually spent and based on community input. “We finally have an administration that is quantifying and assigning metrics to environmental justice efforts [like heat and electricity assistance].”

The Build Back Better Act would make a $300 billion investment in clean energy tax credits for electric vehicles, renewable and clean energy deployment, and energy efficiency technology – key incentives to scale clean energy solutions in a way that promotes affordability. The bill also aims to reduce greenhouse gas pollution by providing $29 billion to leverage private investments and deploy low- and zero-emission technologies to more people, with the goal of at least 40% of those investments benefitting low-income communities.

The House of Representatives’ version of the Build Back Better Act that passed in November also includes a proposal to revise tax benefits so more communities can access rooftop solar (a provision known as 25d). Right now, because rooftop solar tax breaks are dependent on income taxes, these tax credits disproportionately benefit privileged, white, and high-income communities. Shifting tax benefits for rooftop solar will make this technology more accessible, and eventually lower electricity costs. Images before and after the implementation of revised tax benefits, 25d.

 

Additionally, the Department of Energy (DOE) could also see a $40 billion funding boost for their clean technology loan program through the budget reconciliation process. Jigar Shah, director of the Loan Programs Office at DOE, hopes that the projects can bring more rooftop solar, smart appliances, and other clean energy technologies to low-income Americans.

On the aggregate level, research shows that policies in the Act that would help the country move toward renewable energy sources (those referenced above and more) would save electricity consumers roughly $9 billion annually, including nearly $30 million a year in Illinois. Clean energy programs and incentives to make them more affordable depend on the scale of investment and speed of implementation, RMI analysis shows.

The urgency of passing the Build Back Better Act could mean the difference between two scenarios. On one hand, upholding the status quo would exacerbate the instability of paycheck-to-paycheck heating and lighting of American homes. But on the other, the combination of policies in the budget proposal could help deliver immediate help to low-income communities, while investing in long-term mechanisms to reduce American dependence on fossil fuel-generated energy. The Build Back Better bill passed the House in November, and the Senate is expected to take up the bill this winter.

Parker has hope that a combination of policies and successful implementation can make a substantial difference. “There’s so much work to be done, but there’s always a way to integrate communities and policymakers to build connections needed to make policies work,” Parker said. “We must continue holding the Administration and ourselves accountable for ensuring that the federal government directs the promised benefits of climate and clean energy investments to neighborhoods and communities in cities like Detroit and Chicago.”