Which Americans Face the Greatest Risk of Utility Shut-Offs, and How Do they Cope?

Due to a production error, the original abstract we published omitted two pieces of text. We’ve updated the abstract to specify that the study explored the ways households physically cope with utility disconnections. We’ve also updated the key findings to clarify that more than 17 million households, not 17 households, received a disconnection notice and were at risk of a shutoff (corrected 11/8/2021).

About 37 million (or one in three) US households experience energy insecurity, meaning they face challenges paying their energy bills or sustaining adequate heating or cooling in their homes. US households rely heavily on energy to support daily activities required for a healthy life, such as cooking, regulating indoor temperature, and powering electronic and medical devices. However, risking energy costs and other factors that lead to unpredictable monthly bills (like home efficiency levels and seasonal variation) may hurt households with low incomes most.

The health and financial consequences of an energy shutoff can be dire. Research shows energy insecurity is linked to poor respiratory health, poor sleep, food insecurity, and adverse mental health outcomes—at times with fatal consequences. Nonpayment also has economic impacts: it can lead to evictions and foreclosures, low credit scores, and the inability to establish future service accounts.

Previous research focusing on utility disconnections did not distinguish between energy bills and other utilities. To fill the gap, the study’s authors analyzed the frequency of service disconnections, the factors that contribute to them, and the ways households physically cope with utility disconnections. The study uses the 2015 Residential Energy Consumption Survey dataset—a nationally representative set of US housing units that captures disconnection notices, disconnections, and coping responses. The authors model the likelihood of disconnection notices, disconnection, and coping behaviors based on disconnection status.

Key findings

• Households most likely to experience energy insecurity tend to have children, lower incomes, a Black head of household, no high school degree, and are more likely to be renters.
• Black renters, who are disproportionately affected by racial segregation, most often deal with energy inefficiencies caused by poor housing quality.
• Mobile homes, inadequately insulated homes, and old homes in the Northeast and South are most likely to experience energy insecurity.
• More than 17 million households received a disconnection notice and were at risk for a shutoff
• One in three households occupying a mobile home received a notice in 2015. Mobile home occupants are most at risk of receiving a disconnection notice.
• Almost 12 percent of households earning more than the national median income of $56,516 received disconnection notices, and 38 percent of households who received one or more disconnection notices during the year had a gross income of $40,000 or higher. More than half of households with a gross income of at least $40,0000 who received a disconnection notice were headed by someone with college experience.
• Approximately 3 percent of all households (3,376,940) experienced a disconnection in 2015 and went without an energy utility for a period of time.
• Children are most affected by disconnections because they compromise children’s healthy living environment. Disconnections may place children at risk of intervention by child protective services. Additionally, if parents or guardians cannot pay shutoff fees and arrearages, they may be prompted to use their dependents’ Social Security number to set up new utility accounts. This practice may provide children with a safer living environment but may place them at risk for identity theft.
• Some households cope with disconnections by sacrificing food and medicine and enduring unhealthy household temperatures, which harms family members’ well-being and places them at risk for hypothermia and aggravates preexisting conditions. All households in the study reported forgoing basic needs in response to the threat of disconnection.

Policy implications

• To address racial inequities associated with energy insecurity, policymakers should consider addressing discriminatory housing policies and their lasting effects on housing quality.
• To reduce energy insecurity, policymakers should consider expanding consumer protections, including expanding and dedicating more funding for the energy safety net. The safety net includes programs such as the Low-Income Home Energy Assistance Program, state shut-off restrictions, retrofitting and emergency assistance, and deferred payment plans with utility companies.
• Policymakers should consider enacting a “basic energy allotment” that would allow households access to a minimum amount of energy. This would particularly help households with children, who experience a heightened risk of energy insecurity.