Steep Utility Costs Plague Memphis’ Poor

Mary Reid, a beneficiary of Share the Pennies, sits by her new double-pane windows in her dining room. (Ariel Cobbert)

The windows in Mary Reid's Memphis home sparkle with double panes and a clean white finish – all while keeping the precious cool air in during the scorching summer and the harsh cold drafts out during the bitter winter.

It is quite an improvement on the old windows at her home on Devenshire Lane in Southeast Memphis.

"It would rain inside the house. The windowpanes were that bad," Reid said. "Now, I have the insulation. It is not raining in my house anymore. And I can definitely tell the difference."

Reid is a success story for Share the Pennies, a Memphis Light, Gas and Water program that rounds up customer bills to the nearest dollar and then uses the extra money to pay for weatherization improvements to low-income customer homes.

Since 2018, the program has spent nearly $8.2 million, money used to complete weatherization improvements on 1,099 homes. The owners of those homes report that they typically now pay $35 less a month on their power bills, saving about $420 a year.

Those savings may seem small, but they can be huge for poor families struggling to make ends meet. Share the Pennies isn't labeled as an anti-poverty program, but in many ways it is just that.

Yet, for all its success, Share the Pennies does not come close to meeting the need in Memphis, where one in four people live below the poverty line, making it one of the nation's poorest cities.

Fewer than a third of the people who apply for the exclusive program get in. Many others are not eligible. The program is open to homeowners only. Renters are ineligible. So are homeowners who fall behind on their property taxes or utility bills.

All the while, homes throughout Memphis' urban core are bleeding energy, hampered by poor insulation, leaky windows and outdated thermostats. Many others have inefficient heating and air systems that bleed electricity and waste natural gas.

Memphis No. 1 in unaffordable energy

Power lines in Midtown Memphis in 2022. (Marc Perrusquia)

A 2016 report from the American Council for an Energy Efficient Economy (ACEEE) ranked Memphis as having the most unaffordable energy of any major metro area in the nation. Despite Memphis' relatively low electricity rates, the report found that Memphians pay the highest percentage of their incomes for energy in the country – 6.2 percent.

It is even worse for low-income Memphis residents, who paid 13.2 percent of their income toward utility bills, also No. 1 in the U.S. A quarter of all low-income residents in Memphis paid upwards of 25 percent of their entire annual income just on utility bills, the report said. Memphis also ranked No. 1 for unaffordable energy bills for low-income African American and Latino residents.

ACEEE's report was updated in 2020, and it does not specifically include Memphis data. But the 2020 update confirmed that Tennessee residents are in the region of the country where low-income people pay some of the highest percentages of their annual incomes on energy.

Any household that pays more than 6 percent of its annual income on energy is considered to have a "high energy burden." Nationally, 13 percent of households fall into that category. In Tennessee, it's 38 percent.

Any household that pays more than 10 percent of its income on utilities is considered in the "severe energy burden" category.

In Memphis, where the median household income is $48,090, anyone at that income level paying more than $240 in a monthly MLGW bill is facing a "high energy burden." Anyone at that level paying more than $400 is facing a "severe energy burden."

ACEEE's 2020 report said that people in the "high energy burden" category get caught in a cycle of poverty that leads to a lifetime of economic stress and poor health. The solution, according to the report? Weatherization.

It is not just about saving money. Weatherization can help people out of poverty and into a better life.

The more a low-income person pays for energy, the less there is for food, rent and prescription medication, said Chris Carnevale, climate advocacy director for the Southern Alliance for Clean Energy.

"Many studies have looked at how unaffordable energy bills are linked to poverty, and Memphis rises right to the top where energy bills are unaffordable," Carnevale said. "That 2016 report found a shocking number of people in Memphis, a quarter of the households with low income, were paying 25 percent of their income on energy. That is an astounding amount."

Boost came in 2017

The big change in Share the Pennies came in 2017 when Memphis City Council altered the program from opt-in to opt-out. Now, utility customers who do not want their extra pennies steered into the program must specifically opt out.

Prior to the change the program generated about $40,000 for weatherization every year. But after the change, the collections ballooned within a few years to more than $1 million per year.

The change also coincided with a $1 million grant from the Tennessee Valley Authority that same year. It was a huge boost, but six years later, the weatherization program remains a program that shares pennies when dollars are needed.

The U.S. Census Bureau estimates that Memphis has 191,000 single-family homes. Since 2018, Share the Pennies has assisted 1,099 of those homes with weatherization, which is less than half a percent of all homes. Hundreds of other applications were received but not accepted.

Godsend for a few

Share the Pennies recipient Rebecca Maino is delighted with her new Lennox HVAC system. She holds her emotional support dog, Lily, outside her home in July. (Ariel Cobbert)

In September 2023, Reid had 10 windows, three smoke detectors and a carbon monoxide detector installed at her 1,600-square-foot home – at no charge to her.

While it is too early to compare her summer MLGW bill to last year, she praised the program as improving the quality of her life and reducing her monthly bill. A year ago her summer MLGW bills were topping $300 a month.

"Those bills get really high. You know that's why everyone calls it Memphis, Gas, Light and Robbery," Reid told a reporter who visited her cool and comfortable home last month as the temperature reached 97 degrees outside.

Reid also recognized she was fortunate to qualify for the program.

"If I at that time had made just $20 more a month, I would not have qualified. I think there needs to be some more leeway to allow more people to participate," said the 64-year-old Reid, who is now retired. "I was fortunate, but I know a lot of people who need help will not qualify. We need to get more people to be eligible to have this kind of thing done."

It is the same success story for Rebecca Maino, whose home on Lynn Road in Memphis' Avon Gardens area was recently weatherized. Maino has become an evangelist for MLGW Share the Pennies. She even attended a December City Council meeting urging government to get behind the Share the Pennies program and find more money for home weatherization.

"We need to get way more money into this program," Maino said. "We need to break down the barriers. I know of people who are in critical need for this."

Thanks to a new Lennox air system paid for in part by Share the Pennies, the 60-year-old Maino, mother of a teenage son and owner of two dogs, was raising the thermostat last month on a 93-degree day, even as she was paying about $35 less on her monthly MLGW bill.

Maino estimated that a year ago it was costing her at least $200 month just to run her air conditioning unit, and this summer she got that down to $130, thanks to the improvements.

It was so comfortable in Maino's house last month that she was able to turn the thermostat up from 73 to 75 degrees to save a little money, not needing a single electricity-hogging fan.

"I can tell you this much. In the past I would never have been able to sit in my living room. I would be in the back bedroom. And I would have fans running in every room in the house just to keep my house cool, and right now I have to turn my air up because I am chilly," Maino said.

Many limitations

Since its 2018 rebranding, Share the Pennies has rejected applications from 2,575 families because of restrictions and limitations.

A 2013 advertisement promoting Share the Pennies featuring then-University of Memphis basketball coach Josh Pastner

First, the program is only for homeowners who live in their home. David Wright, lead energy technician for MLGW, said that 53 percent of the housing units in Memphis are rentals, and of those, 24 percent are owned by people outside of the city.

The program operators, justifiably, will not put public money into a rental unit only to have the landlord raise the rent after the work is done, Wright said.

There are income restrictions, too. To get involved the homeowner must make less than 200 percent of the federal poverty guidelines. In Memphis, it means a family of four must have less than $60,000 in annual income, Wright said.

There here are other requirements that keep some people out. For example, participants must be up to date on their monthly MLGW bill. And property taxes need to be current.

There is also a general lack of contractors qualified and willing to do the work. The process is stringent and requires a rigorous inspection before and after the weatherization work is completed, said Mike Villanueva, MLGW's supervisor of residential energy programs.

MLGW also must limit the applications based on its workload, funding and its ability to support the homeowners through the process.

Another limitation is that no single home can receive more than $9,000 in improvements. On average, the homeowners participating in the program have received $7,429 in weatherization improvements.

Keys to weatherizing a home

The single best way to reduce energy and lower an MLGW bill is to install a solid 14-inch blanket of insulation on an attic floor, said Jason Hamrick, operations manager for Mitch Wright Plumbing, Heating and Air of Southaven, Mississippi. Keeping the attic heat out of a home's living space during summer is key.

Another idea to help with summer-time attic heat is to install a solar fan, which requires no electricity because it is powered by the sun. And of course, there is no substitute for installing an entirely new system. But that is expensive, often topping $10,000.

And installing new, double-paned windows could cost upwards of $30,000, depending on how many windows a home has.

"Finances is what keeps many people from having energy efficient homes," Hamrick said. "People just do not have the money to do what needs to be done."

One low-cost idea is to install a programmable thermostat, which will automatically control the temperature during the day while a home is empty, Hamrick said. Savvy homeowners can buy one for about $40 and install it themselves.

Yet the bigger issue for Memphis is that it is filled with older homes that were never weatherized properly, especially now when average temperatures are rising due to climate change. Energy efficiency was not a concern until recent decades.

"You can even go into some new homes around here and see things that are not insulated very well," Hamrick said. "These things are expensive to do, so I am not that surprised."

Some of the things that have been done to Memphis homes thanks to Share the Pennies include sealing around windows, adding insulation to walls, putting insulation into crawl spaces, and even installing new heating and air systems.

The next steps

The program needs to be expanded, said former City Council member Patrice Robinson who championed the Share the Pennies' overhaul in 2018. She thinks Share the Pennies is only scratching the surface of the problem of Memphis homes bleeding energy.

"We are focusing right now on low-income people, but the working people of our community need help as well," Robinson said. "That is my dream, and I know it can be done. I would encourage MLGW to expand the program to working people. They need the same opportunity."

But such a step should not come at the expense of current MLGW customers, said Robinson, a former supervisor at MLGW.

Robinson suggested that MLGW could help people borrow money at low interest rates to help weatherize their homes, then add loan payments to their monthly MLGW bills.

There might be other options. MLGW is the largest single electrical customer of TVA, which could use its considerable influence to promote low-income weatherization. The Inflation Reduction Act approved by Congress in 2022 will also make billions available to communities to help with weatherization.

Robinson isn't the only one who is encouraging MLGW to be more aggressive in finding money for weatherization. State Rep. Justin Pearson says his constituents are in dire need of help.

"I have had several people who have tried to benefit from the Share the Pennies program and have tried to participate in the program for years but not been successful," said Pearson, D-Memphis. "The program is well intentioned and well meaning, but it is not nearly enough. We are a city of 600,000 people, and we have probably 100,000 homes that need to be properly weatherized. We need so much more."