Formed in 2015, TEPRI’s original goal was to better understand and address the challenge of energy affordability in the state of Texas.
TEPRI’s research takes into account the concept of energy insecurity – a comprehensive view of the physical, behavioral, and economic factors that contribute to a household’s difficulty maintaining energy services. This concept specifically describes an inability to adequately meet household basic energy needs, including heating, cooling, and lighting.
We use the term energy poverty to refer to a situation where the cost of energy needed to maintain a healthy lifestyle creates a significant or unnecessary economic burden. Energy burden is the amount of a household’s income that goes towards household energy expenses. Households with energy costs exceeding 6% of household income are considered highly energy burdened. TEPRI considers a household to be extremely energy burdened (i.e. in energy poverty) if 10% or more of their income is spent on energy costs.
While energy burden is a useful metric, it does not paint a full picture. Our research found that overall financial well-being, housing type (e.g., number of units), condition of structure and its appliances, and tenure status (home rental vs. ownership) all influence the ability of a household to affordably meet their basic energy needs.
Energy expenses are considered unaffordable (high energy burden) when more than 6% of a household’s income goes towards those costs. Across the US, electricity prices are expected to continue rising. For every 10% increase in home energy costs, we estimate that the average American household will pay between $100-500 more annually. This increase in household spending risks pushing hundreds of thousands of Americans into poverty as a result.
41% of the Texas population is considered low-income. Texas has one of the highest poverty rates in the United States. Nearly 4 million Texans, or 14% of the population, are below the federal poverty line. According to the Department of Energy, these families pay an average of 16% of their annual income on energy costs, with some low-income households paying as much as 28% of their monthly income to cover their energy needs. High income households, by comparison, pay closer to 2% on energy costs. Disproportionately high energy costs put households at risk of energy insecurity – defined as the inability to meet basic energy needs, including heating, cooling, and lighting.
Unlike the rest of the country, Texas has an independent power grid. ERCOT – the state’s grid operator – manages the power grid separately from the larger Western and Eastern Interconnections. Our independent power grid offers unique benefits and challenges, including retail electric choice in 75% the state. As extreme weather events continue to rise in frequency, TEPRI aims to support solutions that deliver reliable energy to households in Texas – particularly for those most vulnerable. Our energy system (power plants, transmission, distribution and end users) must adapt to offer energy reliability – whether it’s snowing in the Panhandle or 105 degrees on the coast. TEPRI is exploring how new technologies, improved weatherization measures, and renewable energy generation can improve energy reliability across the state.
Every day, energy insecurity forces families across Texas to make tradeoffs – like delaying or skipping food purchases and not filling prescriptions – just to keep their gas and electricity connected. At the same, these families are often the ones most affected by weather-related disasters like flooding and hurricanes. On top of everything else, the cumulative impact of the pandemic exacerbated social, economic, and health disparities across our current systems.
To better understand the impacts of high energy costs on Texas households, TEPRI regularly conducts surveys and engages with community members and area stakeholders across the state. This data helps us inform our strategy for developing lasting energy solutions and provides useful information to stakeholders across the energy industry and policymaking landscape.
What are the common tradeoffs Texas households are making?
High energy costs means that households often have to make difficult decisions in order to keep the lights on. Common trade offs include clothing, food, transportation, and medicine.
“[We trade off by] buying less food, we have been known to open the windows and go without AC in the summer and just turn on fans, and it does get hot sometimes. And we cut corners elsewhere, not going out to movies and doing things with the kids.”