Americans face challenges covering utility bills due to 'energy poverty,' study finds

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FILE-A person looks at a utility bill. (Photo by David Potter/Construction Photography/Avalon/Getty Images)

The soaring costs of utility bills can be overwhelming for some Americans when it comes to figuring out how to cover the expense. 

Sometimes this type of financial juggling may entail using money allocated for other daily needs or expenses to pay the utility bill.

But a recent study by Payless Power shows that this is becoming a new normal for some households dealing with "energy poverty."

What is "energy poverty"?

Why you should care:

"Energy poverty" is the inability to afford essential energy needs without relinquishing other necessities like food or medication, according to a study by Payless Power. The report revealed that 57% of low-income Americans are dealing with energy poverty. 

Energy costs consume most household incomes

By the numbers:

Forty-two percent of respondents in a survey from Payless Power said they spend 10% or more of their monthly income on energy bills. While 31% admit they had delayed or skipped buying essentials like food, medication, or hygiene products just to afford their energy bill. And 8% said they postponed paying their utility bill every month because they can’t afford it.

Separately, the study revealed 19% of Americans had their electricity turned off because they couldn’t afford it in the past year. Millennials were the most likely to lose power (22%), followed by Gen X (20%), Gen Z (17%), and baby boomers (11%). And 11% went without power for 1–3 days.

Another 65% of respondents said they felt increased stress or anxiety because of energy insecurity, compared to 44% who shared that they endured physical issues like sleep problems and illness from extreme temperatures (10%), while 21% felt ashamed or depressed by their living circumstances. Meanwhile, 25% said they lived in unsafe or unhealthy indoor temperatures to keep their bills low.

Study shows groups most impacted by energy poverty?

Dig deeper:

Approximately 60% of Gen Z and 59% of millennials living in low-income households admit in the Payless Power study that they struggle to meet their basic energy needs. Generation X trails at 56%, while nearly half of baby boomers (48%) are also impacted.

According to the study, many Americans are taking significant steps to reduce their spending with some of the main strategies being using fans or space heaters (45%) in their homes, unplugging electronics (45%), and skipping heating or air conditioning altogether (44%).

Moreover, the study noted that the state most affected is Texas, where more than three in five low-income residents report living in energy poverty. Twenty-eight percent had their power turned off in the last year, with cities like Houston (30%) and Austin (28%) seeing the highest rates of disconnection because of unpaid bills.