Energy Costs Are Forcing Drastic Choices

Lacy Isbell, 19, can't even afford to feed herself. "I put [the money] in the gas tank," says the mother from Joplin, Mo. "And whatever I have left goes to my baby because he needs it more than I do."

Robert Coates delivers home heating oil in New York City.

With home energy and gasoline prices skyrocketing recently, low-income families like the Isbells have taken the hardest hit, according to a new national survey of how rising energy costs are impacting households by income. While middle- and upper-income families are eating out less frequently and buying less expensive products to pay their energy bills, lower-income households are sacrificing necessities like food and medicine.

Previous studies have missed the fact that income plays a major role in how families are adapting to rising energy prices, said Mark Wolfe, executive director of the state-sponsored energy organizations that released the survey this morning. "The party is over, and we have to make adjustments, and they're painful," Wolfe said. "But what we're trying to say with this survey is that the pain isn't evenly spread."

The study, which surveyed 500 families across the country, found that to make up for increased home energy and gasoline costs, 70 percent of low-income households reduced purchases of food, roughly 30 percent cut back on medicine, and almost 20 percent changed plans for their own or their children's education. And by the survey's parameters, low-income families represent about a quarter of the American population. "These aren't small numbers," Wolfe said. "That's what is sometimes misleading."

While it was always low-income families that reported difficulties in paying for home energy and gasoline in the past, those of moderate- and middle-income are also cutting back considerably on energy use this year. More than 30 percent of these families closed off part of their home because they could not afford to heat or cool it. In addition, more than 30 percent of low-income and about 20 percent of moderate- and middle-income households kept their home at a temperature they felt was unsafe or unhealthy.

Yet despite these sacrifices, many low-income families were still unable to afford their energy needs. Nearly 30 percent of low-income households skipped paying their home energy bill or paid less than the full bill, and roughly 10 percent had their natural gas and/or electricity shut off. Middle and high-income households were much less likely to report that they faced these problems.

Wolfe said it is important to understand that energy is not linear. "As you go up the economic ladder, you don't need the same percent increase for your house because at some point your house doesn't get any bigger," he said. "You can still only drive one car to work. Even though your income may be five times as high, you aren't driving five cars to work."

When people talk about cutting back in the face of high energy prices, middle- and upper-income households therefore have more discretion. "Upper-middle-income people are making smarter choices, such as buying a Prius," said Wolfe, referring to Toyota's hybrid electric car. "But those of low or moderate income don't have the resources to make those choices."

While all income groups reduced the use of their cars this year, the low-income households were much more likely to increase use of public transportation or ride sharing.

Frances Woods, 66, of Fort Plain, N.Y., said that in the face of rising energy costs, she has started carpooling to the grocery store, as well as using less energy in her home. "I shut everything off," she said. "I have just one light I use. I have to keep my light bill within a budget."

While Woods, like many of the older respondents, said she remains hopeful about the future, the survey found that low-income and younger families were less optimistic. "People are starting to believe that the era of cheap energy is over," Wolfe said.

Wolfe said state energy officials hope that the survey, which was released by the National Energy Assistance Directors' Association and the Energy Programs Consortium and funded by the Surdna Foundation, will push Congress to increase funding for energy assistance. "The survey shows that low-income people are definitely struggling to pay these bills, and many aren't being successful," Wolfe said. "More and more families are falling behind."

At the local level, energy officials said the need has never been greater. Timothy Bruer, executive director of Energy Services Inc., which administers the Federal Home Energy Assistance Program in Wisconsin, said people with emergency needs are coming forth in record numbers this year. While Energy Services received an average of 200 calls a day for emergency energy assistance last year, the organization gets 600 calls per day now. "They've been taking away from food, medical, and basic survival needs, and there's nothing to take from anymore," Bruer said. "Heat and power, which is a basic necessity, has become an unaffordable luxury for literally millions of Americans throughout the country."