Nebraska Energy Burden Study 2013 Update The Second Annual Nebraska-Western Iowa Symposium on Homelessness August 7, 2013 Kearney, NE Jerry Deichert Center for Public Affairs Research University of Nebraska at Omaha

Why Look at Energy Burden? Roger Colton of Fisher, Sheehan, and Colton advocates that the maximum affordable level of energy expenditures for the average household should be about 6% of income Defining Affordable Level of Energy Expenditures – Moderate Shelter Burden = 30% of income – Median residential energy costs for low income households = 20% of shelter costs – Affordable residential energy burden = 30% * 20% = 6% of income

Actions Taken Because of High Energy Bills: 2008 Statewide Survey

Nebraska Energy Burden Study: 2013 Update The purpose of this study is to update the estimates of the energy burden of households in Nebraska that were developed in This study reviews information for the period. Previous studies analyzed information for the , , , and periods.

Data Source Main Data Source: U.S. Census Bureau, American Community Survey, Three-Year Public Use Microdata Sample: through Energy Burden Data Elements Household income Cost of electricity Cost of gas Cost of oil, kerosene or wood Housing Cost Data Elements Selected monthly owner costs Gross rent

Important Concepts Used in the Study Energy Expenditures Selected Monthly Owner Costs Gross Rent Energy Burden Affordable Level of Energy Expenditures (Defined Earlier) Energy Gap

Energy Expenditures Energy expenditures are the total energy bills paid by a household They take into consideration both the price of energy as well as the amount of energy consumed. They are recorded if paid by or billed to occupants, a welfare agency, relatives, or friends. However, for a few households, some or all of their energy costs are paid by landlords, included in the rent payment, or included in condominium or cooperative fees. Therefore data in this study are for households where no energy costs are included in rent.

Selected Monthly Owner Costs Selected monthly owner costs provide information on the housing cost expenses for owner occupied units. Selected owner costs are the sum of payments for mortgages, deeds of trust, contracts to purchase, or similar debts on the property; real estate taxes; fire, hazard, and flood insurance on the property; utilities; and fuels. It also includes, where appropriate, the condominium fee for condominiums and mobile home costs. When the data are used in conjunction with income data, the information offers an excellent measure of housing affordability and excessive shelter costs.

Gross Rent Gross rent is the contract rent plus the estimated cost of utilities and fuels if these are paid by the renter (or paid for the renter by someone else). Gross rent provides information on the monthly housing cost expenses for renters. When the data are used in conjunction with income data, the information offers an excellent measure of housing affordability and excessive shelter costs.

Energy Burden Energy burden may be defined as the percentage of annual household income that is used to pay annual energy bills Energy burden = (Annual Energy Bill) / (Annual Income) * 100 percent

Energy Gap Energy gap is defined as the difference between the affordable level of energy expenditures (6% of income) and actual energy expenditures

Energy Expenditures By Income In general, annual energy expenditures are slightly lower for households with lower incomes, but the energy burden is substantially higher. For Nebraska households with incomes less than $10,000 in Average annual energy expenditures were $1,923 Average energy burdens were 45.9%

Table 1. Energy Burden by Income Group for Households Where No Energy Expenses Are Included in Rent for Nebraska: to Income Group Time period Less than $10,000 $10,000 to $19,999 $20,000 to $29,999 $30,000 to $39,999 $40,000 or more All households Mean annual energy expenditures $1,944$1,918$1,954$2,041$2,350$2, $1,988$2,014$2,053$2,139$2,473$2, $1,875$1,984$2,000$2,126$2,439$2, $1,845$2,024$2,055$2,153$2,472$2, $1,923$2,086$2,096$2,162$2,522$2,358 Mean annual household income $5,629$15,125$24,915$34,658$86,646$60, $5,445$15,008$24,945$34,833$89,175$64, $5,510$15,197$25,096$34,855$88,882$62, $5,237$14,873$24,852$34,701$89,989$64, $5,115$15,026$24,904$34,713$93,224$66,532 Mean energy expenditures as a percent of household income

Table 2. Energy Expenditures and Burdens by Relation of Income to Poverty for Nebraska Households Where No Energy Expenses Are Included in Rent: Ratio of income to poverty Annual energy expenditures (mean) Energy expenditures as a percent of household income (mean) Number of households Under 100%$2, ,296 Under 125%$2, ,272 Under 150%$2, ,826 Under 200%$2, ,333

Map 1. Nebraska Regions

For , some of the highest mean annual energy burdens are for households that:  Have incomes below $30,000 or below 200 percent of poverty  Are linguistically isolated  Live in a rental housing unit  Live in a housing unit that is owned free and clear  Consist of families with female householder with no spouse present  Consist of persons living alone, especially single women  Have no children under 18 years living in the household  Have exactly one person 60 years or older living in the household  Have exactly one person 65 years or older living in the household  Live in housing units with 6 or fewer rooms  Heat with a fuel other than electricity or utility gas  Live in a house built prior to1950 Live in Greater Nebraska, Eastern Douglas County, or North Lancaster County

Energy Gap Energy gap is defined as the difference between the affordable level of energy expenditures (6% of income) and actual energy expenditures