Half of U.S. families' energy costs have nearly doubled over past 10 years, finds study from American Coalition for Clean Coal Electricity; U.S. EPA regulations expected to increase rates further, especially in states relying on coal

Tracy McDonald

WASHINGTON , February 7, 2012 (press release) – Minorities & Seniors Hit Hardest by Energy Cost Burdens

America’s working class and those on fixed incomes are suffering the most from increases in energy prices, according to a new study released today by the American Coalition for Clean Coal Electricity. The study finds that more than half of U.S. households now devote more than 20 percent of their family budget toward energy costs, nearly double what they spent just ten years ago.

“When government regulations increase the cost of energy, it is America’s working class who shoulder the burden,” said Steve Miller, president and CEO of the American Coalition for Clean Coal Electricity. “A typical American family is now spending almost twice as much for energy today than it did a few years ago. For millions of Americans living on low and fixed incomes, surging energy prices mean less money for other necessities such as food, housing and health care.”

The annual assessment “Energy Cost Impacts on American Families” uses data from the U.S. Department of Energy and the U.S. Census Bureau to analyze energy cost increases since 2001 for U.S. households. Energy costs include transportation, home heating and cooling and electricity. The findings are particularly timely in light of EPA’s newly finalized Utility MACT rule that, when combined with other pending EPA regulations, will increase electricity rates and other energy prices, especially in states that rely on coal for electricity.

“Because coal has provided about half of America’s electricity over the past decade, electricity prices have actually declined when adjusted for inflation,” said Miller. “But new EPA regulations are making electricity and other energy sources unnecessarily expensive during a time of economic turmoil.”

The full study, “Energy Cost Impacts on American Families,” written by environmental attorney and energy economist Eugene M. Trisko for ACCCE, is available at http://www.americaspower.org/sites/default/files/Energy_Cost_Impacts_2012_FINAL.pdf. Some of the findings include:

Energy costs are growing and eating up a disproportionate share of low and fixed-income families’ budgets. The 60 million households that earn less than $50,000 per year, or half of all U.S. families, will devote an estimated 21 percent of their after-tax incomes to energy, compared to 12 percent spent in 2001.

Energy cost burdens are greatest on the poorest families. The energy bills of families earning less than $10,000 have risen to 78 percent of their after-tax income.
Minority families are burdened by higher energy costs. More than 60 percent of Black and Hispanic families had pre-tax household incomes below $50,000 in 2010, compared with 39 percent for Asian families and 46 percent for white households.

Lower and fixed-income senior households are among those most vulnerable to energy price increases. Food, health care and other necessities compete with energy for a share of the household budget. The $31,408 median income of senior U.S. households means that half of these households depend on incomes below this level.

Electricity is the bargain among all consumer energy products. This is due, in part, to the utility industry’s reliance on affordable coal. Electricity prices have increased by 51 percent in nominal dollars since 1990, while the nominal prices of residential natural gas and gasoline have nearly doubled and tripled, respectively.

EPA regulations drive up electricity prices. Virtually all of the residential electricity price increases over the past two decades have occurred since 2000. These increases are due in part to additional capital, operating and maintenance costs associated with meeting clean air and other environmental standards.

About ACCCE

The American Coalition for Clean Coal Electricity (ACCCE) is a non-profit, non-partisan partnership of companies involved in producing electricity from coal. ACCCE supports energy policies that balance coal’s vital role in meeting our country’s growing need for affordable and reliable electricity with the need to protect the environment. ACCCE also advocates for the development and deployment of advanced clean coal technologies that will produce electricity with near-zero emissions.

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