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NRRI The National Regulatory Research Institute Myths Regarding Low-Income Consumers: Implications for Consumer Education
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NRRI Myths Regarding Low-Income Consumers: Implications for Consumer Education 2005 Joint Low Income Energy Conferences Phoenix, Arizona June 14, 2005 Presented by: Francine Sevel, Ph.D. NRRI Senior Consumer Affairs Program Manager
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NRRI Overview of Myths 1. Low-income consumers can afford high energy bills 2. Problem of energy affordability is not serious 3. Low-income consumers do not practice energy conservation
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NRRI Myth 1: Can afford high energy bills Low-income households spend a greater % of household income on energy Choose between energy services and food, rent, other bills
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NRRI Myth 1: Can afford high energy bills 2003 official poverty rate:12.5 percent, vs. 12.1% in 2002. 2003, 35.9 million people in poverty, vs. 1.3 million in 2002.
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NRRI Myth 1: Can afford high energy bills In 2000, 31 million people or 11.3% lived in poverty 6.4 million were “working poor”
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NRRI Myth 1: Can afford high energy bills $15.37 national housing wage $14.00 is the median hourly wage in US >$10.00 earned by ¼ of population
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NRRI Hourly Wage Needed to Afford 2 Bedroom Apartment StateHourly Wage CA$21.24 MA$20.93 NJ$20.35 MD$18.25 NY$18.18 Ct$17.90 HI$17.60 AL$17.07 NV$16.93 NH$16.79
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NRRI Myth 2: Problem Not Serious Impact on healthPercentage W/out food22% W/out medicine or dental care38% Took less meds. Didn’t fill prescription 30% Sick due to cold home21% Related illness resulting in dr. hospital visit 5% Sickness due to hot home7%
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NRRI Myth 2: Problem Not Serious Impact on shelterPercentage Missed rent/mortgage payment 28% Moved in w/ family/friends 9% Homeless4% Heat disconnected17% Used stove for heat30%
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NRRI Myth 2: Problem Not Serious Impact on shelter cont’d Percentage Unable to pay entire energy bill 51% Electricity disconnect8% Heating system broke- unable to pay for repair 10% Unable use AC—due to inability to pay to fix 12%
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NRRI Myth 2: Problem Not Serious PA 2004 disconnect data 15,000 households /out heating 4,496 w/out elec 1,509 w/out natural gas Additional 14,595 disconnected residences are vacant Vs. 5,8000 in 2000
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NRRI Myth 2: Problem Not Serious Percentage of Electric Accounts in Arrears 4/1/03-3/31/04 2004
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NRRI Myth 2: Problem Not Serious Percentage of Gas Accounts in Arrears 4/1/03 - 3/31/04 2004
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NRRI Myth 2: Problem Not Serious Percentage of Gas Account Disconnections 4/1/03 - 3/31/04 2004
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NRRI Myth 3: Energy Conservation Not Practiced Energy Savings Actions by LIHEAP Recipients Percentage Plastic on windows 44% Lowered heat at bedtime 76% Used fans/opened windows 78% Kept shades closed during day in summer 83% Washed clothes in cold water 65% Used compact fluorescent light bulbs 44%
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NRRI Consumer Education Recommendations 1. Targeted consumer education 2. Use of stakeholder groups
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NRRI Targeted consumer education
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NRRI Targeted consumer education
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NRRI Consumer Affairs Federal Commissions Consumer Protection Stakeholders Utilities Billing Houses Billing Parties State Policymakers State Agencies AG Federal Policymakers Stakeholder Organizations & CBOs Consumer Protection Organizations Use of stakeholder groups
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NRRI Stakeholder groups
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NRRI
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