Greater Energy Equity Ahead, in both Maryland and Virginia
New state laws in MD and VA will lower spiking electric bills for those least able to afford them, through better-designed home energy efficiency improvements.
Two neighboring states – Maryland and Virginia – are leading the way on taking equitable climate action: newly passed laws in each state (Maryland’s law was patroned by Delegate Lorig Charkoudian and Senator Brian Feldman, and the state senator that sponsored Virginia’s law is Senator Ghazala Hashmi) both recently received strong, bipartisan support. That’s not surprising, since the laws will give folks getting by on lower incomes better access to the most effective and equitable tool for lowering energy bills and making homes healthier and more comfortable: energy efficiency.
What’s energy efficiency, and why is it important?
Energy efficiency improvements, like better insulation, LED lighting, and tuned-up HVAC systems, go a long way towards improving the health, comfort, and living expenses of residents. That’s especially the case for lower-income residents, who are often unable – unlike the more affluent among us – to make the upfront investment in making such energy improvements.
What do these two new laws do?
Through these two state laws, Maryland and Virginia will deliver improved efficiency programs to low-income customers, elderly residents, people with disabilities, and veterans. These laws will do so by using a very simple, widely used mechanism: setting a performance standard (usually referred to as an “energy efficiency resource standard”) that requires energy efficiency programs to deliver a minimum amount of bill savings, specifically for those low-income customers.
Simply put, the laws ensure that efficiency programs designed to reach hard-to-serve segments of the population, like low-income residents and renters, deliver actual energy savings, as intended. And by saving energy, households will reduce their energy bills and save money that could be used for other vital needs, like groceries or healthcare.
In Maryland, the Department Housing and Community Development will be in charge of making sure that these savings get to the customers who most need them. In Virginia, the state’s largest utility, Dominion Energy, will be responsible for ensuring their low-income programs meet a minimum level of energy savings, and show that they are doing so to their regulators at the State Corporation Commission.
Ensuring that energy efficiency programs deliver effective savings for consumers is not only the right thing to do, it’s common sense. The cheapest form of energy is the energy that is never used. Unlike the outdated investments in fossil fuel technology often proposed by utilities, energy efficiency provides a huge return on investment that no other resource can match. And given that lower income folks have older, more energy-draining homes, it makes sense to target those homes first for maximum economic and climate benefits.
For years, NRDC and partner organizations have highlighted the high, inequitable energy burdens felt by low-income and minority residents in cities and states across the country, energy burdens that are, moreover, disproportionately higher than for others. A high energy burden (that is, the higher proportion of limited income spent, and often wasted, on a monthly energy bill) limits the quality of life of Marylanders and Virginians.
In a time of increasing energy costs, ensuring equal access to programs that can lower energy bills is imperative and just.
What’s next for energy efficiency?
NRDC will be monitoring the implementation of these new laws and shepherding our resources to ensure better efficiency savings through the low-income efficiency performance standards just passed into law. The creation of these two laws – one signed by a Democratic governor and the other by a Republican governor – shows the way for other states across the country to advance similar laws to address energy burdens and energy efficiency for low-income families.
Addressing energy and climate equity is an urgent challenge for all of us. Maryland and Virginia have just made a big step in the right direction – one that other states should follow.