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Transitioning from Fuel Oil to Electric Heating – Ensuring Low-Income Households Aren’t Left in the Lurch

by Chris Meyer, LEAP Executive Director

The longer I spend in my role at LEAP, the more aware I become that the challenges of switching fuels for residents have become both more apparent and necessary to meet climate change goals. While visiting WA state for a family vacation this summer, I read about the Mayor of Seattle’s new proposal to tax heating oil and use the revenue to support low-income households in a transition to electric heating. That new proposal, along with new climate action plans in development for the greater Charlottesville region, led me to investigate further into the topic.

More and more municipalities seem to be taking the lead on this, and I remember colleagues at my former employer, Environmental Defense Fund (EDF), celebrating when NYC banned a certain type of heating oil. While the Seattle and NYC policies are different, they are getting at the same thing. Importantly, both included cost mitigation measures for low-income residents.

Seattle’s new tax on heating oil, at $.24/gallon, is substantial and was quickly called an “old people’s tax”, per older people being more likely to be living in houses that use heating oil. However, 1,000 low-income residents of the 18,000 total residents thought to use heating oil will be eligible for fully-funded conversions. Annual savings on heating energy bills are projected to be $850/year – a significant amount for low-income households.

For market-rate household conversions, an on-bill financing option would make such a new policy more palatable and politically possible. I would think large utilities, both investor-owned and the cooperatives, would be interested in adding this demand to their systems to offset reductions from energy-efficiency programs. However, not moving much away from the status quo seems to be the preference for many of the utilities, but I hold out hope for some of the more innovative ones in our state.

Setting the utility lawyers aside, I hope to see a municipality in Virginia take the leap and start with a “pilot” program in the near future (2020 anyone?) to tackle this important issue. Ensuring any program includes some kind of subsidy for low-income households to ease their conversion will be necessary. As with all new policy or pilot, getting the first couple dozen done, learning from them, and then adjusting will be required. Let’s get moving on these. If you’ve had experience with designing or implementing such a program, please contact us, as we would like to hear from you.

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