Exploring bill affordability for low income electricity customers in California

The COVID-19 pandemic and economic recession have made it challenging for many customers to pay their bills on time. Utilities across the country have adopted a number of short-term solutions to assist customers with bill payment, often allowing customers to temporarily accumulate debts. While these interventions offered much-needed short-term assistance, they are unsustainable in the long term. When the crisis ends, it remains an open question which policy levers should be pushed to effectively help utility customers recover from their accumulated debts. In this project, we will work with a public power agency in California, East Bay Community Energy, to run randomized experiments that will allow us to estimate how low-income customers respond to policies that reduce electricity prices and/or provide temporary debt relief. We will evaluate how each intervention changes customers’ behaviors in electricity bill payment, electricity consumption, and payment of other bills. Furthermore, we will explore what drives behavioral changes by considering treatment effect heterogeneity. The results of this study will provide insight into the mechanisms that drive utility customer behaviors in payment and consumption, as well as the policy instruments that will be most effective in recovering from the current crisis.