Efficiency Vermont’s Targeted High Use (THU) program provides direct installation of electric-saving products and appliances, including refrigerators, freezers, clothes washers, dehumidifiers, heat pumps, and heat pump water heaters, to qualifying households with high electricity usage. Through an annual direct mail outreach campaign, Efficiency Vermont historically promoted its THU program to customers who were likely to be income-eligible and were confirmed through available utility data to have used at least 10,000 kwh/year, a high level of electricity usage for residential customers in Vermont.

But in 2019, Efficiency Vermont elected to shift to its tactic in order to reach more eligible customers who were excluded from prior mailing lists due to unconfirmed utility account data. They sent a mailing to 50,000 known low-income customers across the state, and while 68% of people called in response, most of the customers failed to qualify because they did not meet the program’s high electric usage requirement. Unsurprisingly, customer feedback was overwhelmingly negative after receiving this information, leading to a substantial reduction in customer satisfaction.

Efficiency Vermont responded to this feedback and redesigned the THU program by addressing three dimensions of equity: including representative voices in program design and delivery, defining target populations, and determining disparate impacts of programs.

This article will cover the second of these dimensions: defining target populations. You can read about including representative voices in our previous article; disparate impacts will be published later in this series.

Defining Target Populations

Overview of Concept

Defining underserved (or target) populations is a necessary first step in addressing equity. The characteristic used most often in the clean energy industry to define target populations is “low-income.” To a lesser degree, the research uncovered references to “energy burden,” a metric used to quantify the amount of income spent on energy relative to overall income. Other underserved populations could be defined by race, education level or age. Most importantly, the research team found that when target populations are not defined and targeted, customers served by programs do not represent the general population.

Underserved customers may be unable to access their equitable share of services for various reasons. Low-income customers may not have the financial capital available to invest in energy efficiency upgrades. Rural customers may not have the internet bandwidth to engage with online marketing efforts as easily. Some may simply not have the available time to fully investigate the program options available from their utility. In addition, most utilities print and design marketing materials in English. Communities that speak English as a second language and are more comfortable with material from their native language therefore tend to be underserved. To adequately reach and serve these customers equitably, a targeted approach is essential.

In rural states, the Energy Trust of Oregon and Focus on Energy in Wisconsin have targeted rural customers, attempting to increase participation in program offerings. Burlington, Vermont is a refugee resettlement community and Burlington Electric Department has targeted low-income New Americans by translating documents to Arabic and Nepali. Outside of Energy Trust of Oregon, the research team did not find references to programs targeting populations by age, race, or ethnicity.

The Energy Trust of Oregon has developed a sophisticated set of metrics including racial and ethnic diversity, contracts with women-owned businesses, and relationships with community organizations in underserved areas. But in general, the metrics used to define target populations in the clean energy industry are most often:

Low income. This is a standard (and often the sole) definition used to address the needs of underserved customers. In a low-income market characterization study in Maryland, households at or below 200% of the federal poverty level are considered low-income. Other programs define low-income customers as having incomes less than 60 or 80% of State or Area Median Income.

High energy burden. Energy burden is calculated by estimating the household’s annual spend on energy divided by a household’s annual income.

Geographic analyses using census data and spatial data have been used to target underserved communities. In one example, VEIC prepared a report for Efficiency Vermont using spatial analysis to identify neighborhoods with high energy burdens. Survey data, geo-spatial modeling and energy use data were used to estimate average energy spending and burden for households in each Census block group in Vermont. This analysis initiated targeted energy efficiency spending efforts to underserved customers with high energy burdens.

Efficiency Vermont Experience

Efficiency Vermont changed its definition of target populations in 2019. This led to a significant increase in the number of customers who are now served by Efficiency Vermont’s low-income programs. Whereas the THU program historically served approximately 350 customers per year, the program is now positioned to serve 2-3 times that number each year.

The two criteria for the THU program prior to 2019 were: 1) household income of less than 80% of the Area Median Income (AMI) and 2) household annual usage over 10,000 kwh of energy usage. Research conducted by Efficiency Vermont identified that energy burden carried by a single occupancy household using 8,500 kwh per year is significantly greater than a household of five using 10,000 kilowatt hours per year. At that time, the THU program was only identifying the latter as a target customer in need of comprehensive low-income program support.

Through data modeling, Efficiency Vermont was able to identify customers who were being served by the program, but whose energy burden was as low as 1.6%. Ironically, many customers with energy burdens of over 10% were not being served. Based on this analysis, Efficiency Vermont changed its criteria for THU customers to: 1) less than 80% AMI and 2) electric energy burden greater than or equal to 3%.

This change in definition of target populations means that customers using less than 10,000 kilowatt hours per year can now qualify for assistance if their annual income creates an electric energy burden over 3%. Efficiency Vermont also added a new program, the previously described Appliance Replacement Voucher program, to serve customers with energy burdens under 3% who do not qualify for the THU program. Together, the two programs ensure that all low-income Vermonters can access meaningful programs to reduce their electric energy burden.