For all of the mountains turned to rubble and streams turned to orange in the coalfields of Appalachia, one consolation for the region has always been to have some of the lowest electricity rates in the nation. With coal being literally under their feet, Appalachian utilities have delivered cheap and reliable electricity for about as long as King Coal has been firing up the boilers that make the steam that spins the generators that juice the wires that light up our lives in so many magical ways.
But everything is relative. Rates in this region may be lower than in other parts of the country, but they have been rising over the past few years, due mainly to price hikes in coal and retrofitting of coal-fired power plants with smokestack scrubbers and the like, to meet environmental regulations.
Another thing that has been rising in recent years in a region that is known for high poverty rates: even higher poverty rates. Of course this has gone hand-in-hand with higher unemployment, a` la the Great Recession.
Snapshot: Appalachian Poverty by the Numbers (2010)
- US Poverty Rate: 13.8%
- Appalachian Poverty Rate 15.6%
- Appalachian County with Highest Poverty Rate: Wolfe County, KY (42.2%)
- Appalachian County with 2nd-Highest Poverty Rate: Owsley County, KY (41.5%)
- Number of Appalachian KY Counties with Poverty Rate 20% or above: 45
- Number of Appalachian Tennessee Counties with Poverty Rate 20% or above: 16
- Number of Appalachian Tennessee Counties with Poverty Rate Above 30%: 2
Source: Appalachian Regional Commission
Even as rates climb, an electric bill might not yet be a particularly burdensome budget item for middle to upper income households. But as income inequality continues to widen, more and more Appalachian households are asking hard questions about how they keep their lights on while trying to pay for other basic necessities.
A 2008 Economic Opportunity Study determined that residential energy bills are upwards of 26% of the budget of households in poverty, while households with incomes higher than the eligibility ceiling for emergency utility assistance (LIHEAP) spent about 4% of their income on utilities. And lest anyone assume generally wasteful energy habits on the part of poor people, the study shows that energy consumption in low-income households is somewhat less than in higher-income households. This, despite the fact that low-income housing is typically much less energy efficient than the houses of rich people.
If at some point higher-income homeowners want to get a better handle on rising utility bills, they have the financial means to do this, typically by taking out a loan to weatherize their house. Depending on terms and extent of the upgrades, this type of loan more than pays for itself over time in reduced energy bills. However, between the down payment and credit score requirements of conventional loans, this is rarely a realistic option for lower-income homeowners.
This is the reality that the nonprofit organization Appalachian Voices is working to change.
Based in the North Carolina high country town of Boone, App Voices has been organizing to protect the region's natural resources and beauty since 1997. Yet beyond taking stands against various unsavory and unsustainable practices of the region's extractive industries, this multi-state organization promotes a very practical alternative economic vision that undermines the classic "jobs versus environment" argument.
The recently launched Energy Savings for Appalachia Campaign aims to develop energy efficiency and related jobs to shore up the long term economic and environmental health of Appalachia. App Voices Energy Policy Director Rory McIlmoil explains that the basic plan is to work with member-owned rural electric cooperatives in North Carolina, Virginia, and Tennessee to develop more broadly affordable energy efficiency financing programs that lower electricity bills while strengthening the region's energy services industry.
"We're reaching out to co-ops and their members to look at financing models that reduce demand and save money for the cooperatives as well as their members," says Mr. McIlmoil, who recently did some co-op hopping around to a number of east Tennessee electric cooperatives, trying to get a sense of how open their managers are to developing new energy efficiency programs. "The initial response is encouraging," he says. "We're definitely not getting blown off, particularly in Tennessee." He says that the co-ops do have concerns about the administrative costs of a new loan program. But they also recognize that they have a large customer base that could benefit from a low-interest, nothing-down, weatherization loan where members qualify based on electric bill payment history rather than income and credit scores (see, for example, Electric Cooperatives of South Carolina's quite successful Help My House Loan Pilot Program).
While it may seem counter-intuitive for an entity in the business of selling electricity to put any effort into helping its customers use less energy, there are clear benefits to a utility that promotes energy efficiency. No utility has enough of its own generating capacity to meet the needs of its customers during peak demand periods during the dog days of summer, winter's deepest freezes, and other extreme weather events. During these localized events it is common practice for a utility to purchase power from other utilities outside its local or regional grid to supply the deficiency. This external power has been subject to the same upward pressure on costs as home-grown power, plus the premium placed on it during peak demand. So any measures a utility can take to shave demand becomes a return on investment during peak demand.
By helping electric cooperatives implement and grow energy efficiency financing programs for low and moderate income homeowners, Appalachian Voices aims to juice the small but growing energy services industries in the region, including home energy audits, weatherization retrofits, building materials and energy efficient appliance sales.
Don't call it "jobs versus the environment" anymore. Don't even call it a "green economy." Call it "jobs that save the mountains, and money on your electric bill."