How Low-Income Customer Programs Lower Energy Costs for Everyone

The briefing highlights a rising utility debt crisis in the US, where household debt grew to $23 billion by June 2025. It argues that targeted affordability programs—such as arrearage management plans, percentage-of-income payment plans, discount rates, and energy efficiency upgrades—benefit both vulnerable customers and the broader ratepayer base by reducing bad debt, collection costs, and service instability.

• Household utility debt in the United States increased by 31 percent, rising from $17.5 billion at the end of 2023 to $23 billion as of June 30, 2025. This has left approximately 21 million households behind on bills, with projected shutoffs reaching 4 million this year.
• Arrearage management plans (AMPs) help customers eliminate debt through gradual payments and forgiveness. An evaluation of Pepco's AMP showed that participating customers had bill coverage rates 16 percentage points higher than nonparticipants, average shortfalls reduced by $370, and a significant drop in collection actions from 36.7 to 1.8 per customer.
• Percentage-of-income payment plans (PIPPs) and low-income discount rates (LIDRs) effectively limit debt accumulation. A PIPP pilot in California saw average arrears decline by $131 per household in its first year. In New York, the Energy Affordability Program's discount rates saved the residential customer base an estimated $89 million in arrears relief between 2020 and June 2022.
• Low-income energy efficiency programs, such as weatherization, reduce long-term bills and bad debt write-offs. In Pennsylvania's Low-Income Usage Reduction Program (LIURP) for 2021–2022, average net arrears fell statewide by $25, with larger reductions for PPL ($99), PECO ($51), and Duquesne Light ($39) participants.
• Affordability programs provide system-wide financial benefits by lowering uncollectible balances and collection costs. RMI analysis indicates that reductions in utility debt alone can offset nearly half of the costs associated with these programs.

APA

RMI (2025). How Low-Income Customer Programs Lower Energy Costs for Everyone. https://rmi.org/resources/how-low-income-customer-programs-lower-energy-costs-for-everyone/

Chicago

RMI. How Low-Income Customer Programs Lower Energy Costs for Everyone. 2025. https://rmi.org/resources/how-low-income-customer-programs-lower-energy-costs-for-everyone/.

Wikipedia

{{cite report |author=RMI |title=How Low-Income Customer Programs Lower Energy Costs for Everyone |date=15 October 2025 |url=https://rmi.org/resources/how-low-income-customer-programs-lower-energy-costs-for-everyone/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2025how, author = {{RMI}}, title = {{How Low-Income Customer Programs Lower Energy Costs for Everyone}}, institution = {RMI}, year = {2025}, month = oct, url = {https://rmi.org/resources/how-low-income-customer-programs-lower-energy-costs-for-everyone/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }