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The National Regulatory Research Institute. Myths Regarding Low-Income Consumers: Implications for Consumer Education. Myths Regarding Low-Income Consumers: Implications for Consumer Education. 2005 Joint Low Income Energy Conferences Phoenix, Arizona June 14, 2005 Presented by:
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The National Regulatory Research Institute Myths Regarding Low-Income Consumers: Implications for Consumer Education
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
Overview of Myths • Low-income consumers can afford high energy bills • Problem of energy affordability is not serious • Low-income consumers do not practice energy conservation
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
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.
Myth 1:Can afford high energy bills • In 2000, 31 million people or 11.3% lived in poverty • 6.4 million were “working poor”
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
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
Myth 2: Problem Not SeriousPercentage of Electric Accounts in Arrears 4/1/03-3/31/04 • 2004
Myth 2: Problem Not SeriousPercentage of Gas Accounts in Arrears 4/1/03 - 3/31/04 • 2004
Myth 2: Problem Not SeriousPercentage of Gas Account Disconnections 4/1/03 - 3/31/04 • 2004
Consumer Education Recommendations • Targeted consumer education • Use of stakeholder groups
Use of stakeholder groups Federal Commissions Utilities Federal Policymakers Consumer Affairs Billing Houses Stakeholder Organizations & CBOs Billing Parties State Policymakers Consumer Protection Organizations State Agencies AG Consumer Protection Stakeholders