Shining Light on Electrical Energy Burden: Affordability and Equity in Rate Design

This study explores the concept of electrical energy burden minimization from a utility's perspective. It proposes an equitable rate design that minimizes the electrical energy burden on residential customers while ensuring the economic viability of the utility. We do this by analyzing data on household income, energy consumption, and utility rates. The model incorporates electrical energy burden as a key metric in designing rate structures. Results from the analysis indicate that the proposed rate design can reduce the electrical energy burden for low-income households without imposing significant financial impacts on higher-income households. The highest income census tract in the study experiences a maximum of 11.34% increase in yearly energy costs for a 10 census tract case study.