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Energy Expenditures Down in 2012, but Low-Income Pay More

April 25, 2013 — The US Energy Information Administration (EIA) reported recently that households spent 2.7 percent of their income on energy bills during 2012, the lowest rate since 2002. However, it also found that lower-income Americans still pay a larger percentage of their household income for energy than do the wealthy.

Aggregate energy expenditures by households decreased $12 billion in 2012 from the previous year. The report said warmer weather and natural gas prices dropping by 3 percent helped contribute to the savings. EIA determined that the average household spent $1,945 on heating, cooling, appliances, electronics, and lighting.

While the overall rate of 2.7 percent is the lowest in a decade, EIA reported that households with the lowest 20 percent of income spent nearly 6 percent of their income on energy bills. These numbers echo previous findings regarding the low-income energy burden. The 2009 LIHEAP Energy Notebook found that 12.3 million low-income households spent over 5 percent of their income on energy needs, while 5.7 million spent over 10 percent of their income. Meanwhile, the current EIA report found that the top 20 percent of households spent less than 3 percent of their income on home energy costs.

The EIA cited data from the Bureau of Labor Statistics for 2012 that found energy costs were the eighth biggest expenditure for households, coming in behind other necessities like shelter, food, healthcare, and transportation.

The EIA income expenditure figure includes home use of electricity, natural gas, fuel oil, propane, kerosene, wood, and coal. It excludes fuels used for transportation.

Sources: US Energy Information Administration, 2009 LIHEAP Energy Notebook, media reports