Even before COVID-19, Chicago families were struggling to keep up with increasingly unaffordable gas heating bills. Then the pandemic hit, thousands of jobs evaporated, and, needless to say, thousands of families sank perilously deeper into the red.
Now, Chicago is headed into what is shaping up to be yet another difficult winter, but this time, many of the protections that helped vulnerable families keep their homes warm last year are gone. Federal unemployment benefits have ended. Illinois’ moratorium on utility shutoffs has expired. To make matters worse, the price of natural gas is going through the roof.
One in five Chicago households is more than 30 days behind on its utility bills. In some neighborhoods on the south and west sides, the number is over 50%. For households that have fallen behind, the average unpaid balance is $734 — an amount that research shows is nearly impossible for many low-income families to repay.
When so many Chicago families are unable to afford the energy to heat their homes, the system is broken. It’s time to re-examine the policies and assumptions that got us here.
Chicago is at a crossroads. While it’s clear we must invest in a utility assistance program that is unprecedented in scale, it’s also clear that we must go beyond stopgap measures and address the root causes of the affordability crisis that is burdening so many families.
At the Citizens Utility Board, we’re advocating for city leaders to envision a new way of heating our homes, powered by clean energy. According to our recent analysis, transitioning homes and buildings from fossil fuels such as gas, through a shift to highly efficient electric heat, is the most affordable pathway to fixing our broken energy system. This move would lock in household savings of up to $47,000 and cumulative citywide savings of as much as $29 billion over the next 34 years.
What’s driving up costs
To understand why upgrading homes to clean energy is key to locking in more affordable bills for families, let’s examine the factors that are pushing up costs both this year and long- term.
The first factor is the volatility of natural gas prices. Price spikes are baked into the business model of all fossil fuels — and natural gas is no exception. This winter, gas prices in the Midwest are projected to spike by an astounding 47%, pushing up total gas bills by an average of $262 throughout the course of the winter. These price spikes are cyclical; until we end our dependence on gas, we will continue to get burned.
The second factor pushing up costs is the astronomical cost of maintaining the network of pipelines that deliver gas to Chicago households. When Peoples Gas initially launched a massive pipeline replacement program in 2011, the program was supposed to take 20 years and cost $2.6 billion. Ten years later, the project is far from complete, and the utility is now projecting it will continue through 2040 and cost as much as $11 billion. By the time the project is finished, customers could be paying $750 dollars a year for the program alone — and the total cost per customer could reach $16,000.
This multibillion-dollar investment in Chicago’s gas infrastructure comes as our city looks to transition in coming years to clean energy across sectors. Numerous studies show relying on gas to heat homes is incompatible with meeting our climate targets. Should this money instead be invested in the transition away from fossil fuels in homes?
The first step in exploring a clean energy future is for Mayor Lori Lightfoot to commit to funding two to three pilot programs and a scalability plan that can serve as a roadmap for transitioning homes and buildings to clean energy. CUB, the Environmental Defense Fund, and the Accelerate Group have submitted a proposal to the city, known as Better Heat, for a clean energy technology called geothermal infrastructure in targeted neighborhoods. We hope to collaborate with Lightfoot’s administration on this opportunity to illustrate the money-saving potential of this clean energy technology.
The painful winter ahead is forcing difficult questions about our city’s energy system and whether it’s meeting the needs of our communities. City leaders must take this opportunity to reconsider our investments and put our city on a path to a healthier and more affordable clean energy future.
Dave Kolata is the executive director of the Citizens Utility Board.
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