Energy Costs Hurting Already Strained Family Budgets

 Energy costs continue to eat up a disproportionately large share of American family budgets, particularly for low and fixed-income families. These are the findings of a new study released today by the American Coalition for Clean Coal Electricity (ACCCE).

The annual assessment based upon data from the U.S. Department of Energy and the U.S. Census Bureau, shows that half of American families are spending nearly 20 percent or more of their total household income to cover energy-related expenditures.

"Energy costs are still eating away at family budgets," said Joe Lucas, senior vice president for communications for ACCCE. "As we continue to rebuild our economy and help those who are having the hardest time making ends meet, policies that ensure access to affordable, reliable electricity should be a high priority. That is why low-cost coal – the largest domestically-produced source of energy – is so important."

According to ACCCE, the survey’s findings are particularly timely. Both federal and state policy makers are debating energy and environmental proposals, some of which could significantly raise energy prices.

"Meeting America’s demand for affordable, reliable, and clean energy will require the prudent use of all of our available domestic energy resources, especially coal," said Lucas. "Now, and as we bring new technologies to the marketplace to reduce carbon emissions, coal will remain a good value for the American consumer. Generating electricity from coal will provide our nation with continued access to affordable, reliable, and increasingly clean energy using a resource that is found and creates jobs right here at home."

The following are just a few of the key findings discovered by Eugene M. Trisko, the study’s author:

• Energy costs are taking up a large percentage of household incomes. Approximately one-half of U.S. households have average pre-tax annual incomes of less than $50,000. In 2010, these households are projected to have after-tax incomes of approximately $22,711, of which, they will spend about 19% on energy-related expenditures. The 27 million households earning between $10,000 and $30,000, representing 23% of U.S. households, will devote 22% of their 2010 after-tax income to energy, more than twice the national average of 10%.

• Lower-income families are more vulnerable to energy cost increases than higher-income families because energy represents a larger portion of their household budgets. Families earning less than $10,000 pay over 69 percent of their after tax income for energy expenditures.

• Household expenditures for gasoline have more than doubled in the past decade. In 2001, the average household spent an average of $1,680 on gasoline compared to a projected $3,456 per household in 2010. Increased gasoline costs account for nearly three-fourths of the $2,395 average household energy cost increase since 2001.
• Among consumer energy products, electricity has maintained relatively low annual rates of price increase since 2001. Coal-based generation provides about one-half of America’s electricity supply and has contributed to the holding down electricity prices.

The study relies on historical energy consumption survey data and current energy price forecasts from the U.S. Department of Energy’s Energy Information Administration (EIA). Energy costs are summarized by household income category for all U.S. households, and for African-American, Hispanic, Asian and Caucasian families using data from the U.S. Bureau of the Census.

A complete copy of the study can be found on www.americaspower.org.

About the researcher - Eugene M. Trisko is an environmental attorney and energy economist who represents labor and industry clients. He previously served as an attorney in the Bureau of Consumer Protection of the U.S. Federal Trade Commission. Mr. Trisko concentrates on issues surrounding the federal Clean Air Act.