Senators: Higher energy costs could force almost 1 million into poverty

A 10-percent increase in home energy costs could push 840,000 people into poverty, according to a new white paper by two GOP senators.

Republican Sens. Lisa MurkowskiLisa Ann MurkowskiSenate leaders face pushback on tying debt fight to defense bill Congress should reject H.R. 1619's dangerous anywhere, any place casino precedent Democratic frustration growing over stagnating voting rights bills MORE (Alaska) and Tim ScottTimothy (Tim) Eugene ScottHow expanded credit data can help tackle inequities Dems erupt over GOP 'McCarthyism' as senators vet Biden bank watchdog pick Why Democrats' prescription drug pricing provision would have hurt seniors MORE (S.C.) argue that lawmakers should consider the impact of policy changes and federal regulations on the energy expenses incurred by households.


"Too many Americans suffer from energy insecurity; they cannot afford the energy required to heat or cool their homes or secure other basic needs such as refrigeration," Murkowski and Scott argue in the paper, which they will unveil Thursday at a Washington event.

The senators recommend the use of Indicators of Energy Insecurity (IEIs) to estimate how policies would impact energy prices.

The indicators look at three things: the number of households that incur a significant cut in their spendable budget, the number of households pushed below the poverty line and the average household energy burden, estimated based on average gross income.

"Any policy proposal that would tend to increase the cost of energy should therefore be fully evaluated for its impact on energy insecurity, in order to give policymakers a complete picture of its potential consequences," the senators write.

"Pushing more families into poverty triggers a number of significant socioeconomic issues, including increased government spending and a growing dependence on government social and safety net programs."

The paper estimates the impact of what a 10-percent increase in energy costs would look like based on the indicators, claiming that such a spike in price is possible.

A town in Alaska, Murkowski says, has experienced a 66-percent increase in heating oil costs over the last seven years.

An analysis from the Energy Information Administration, the Energy Department's stat shop, says electricity prices will increase an average of 3.1 percent this year, accounting for only currently enacted policies.

While Murkowski and Scott make no mention of the Environmental Protection Agency's (EPA) proposed rule on carbon emissions from existing power plants, their analysis implies it is considered.

"A 10-percent increase in energy costs was chosen because it is realistic, and could be the result of the enactment of public policies, shifting market conditions, or unexpected events. Higher increases are also possible," the senators write.

According to the EPA's proposal, the new rule, which requires the nation's power plants cut pollution 30 percent by 2030, should cut electricity bills by 9 percent by the time it goes into effect.

That is based on the cooperation of states, which are expected to improve their energy efficiency, which in turn will lower energy use.