Nearly 34% of American Households Reduced or Skipped Basic Expenses To Pay Energy Bill
Inflation has hit nearly every aspect of Americans’ lives, from grocery bills to housing costs. Energy costs are no exception. As utility rates rise across the U.S., consumers struggle to afford those bills.
A recent LendingTree survey on late bill payments found that consumers struggle to afford their utility expenses the second most (behind rent and mortgage). Now, we analyze U.S. Census Bureau Household Pulse Survey data to determine the percentage of consumers sacrificing necessities like food and medicine to pay for their energy costs. Here’s what we found.
- Key findings
- U.S. households are forgoing basic expenses to pay energy bills
- After a scorching summer, households in Southern states most likely to forgo basic expenses to afford energy costs
- Households in West Virginia most likely to be unable to pay part of their energy bills
- Black households most likely to report inability to pay part of their energy bills
- As winter approaches, here’s how you can combat high energy costs
- Methodology
Key findings
- More than one-third (33.9%) of U.S. households say they reduced or skipped basic expenses, such as medicine or food, to pay an energy bill in the past 12 months. Nearly one-quarter (23.1%) of U.S. households report being unable to pay at least part of their energy bill in the past year.
- Texas (44.8%) has the highest rate of households that say they reduced or skipped expenses to pay their energy bill. They are joined by fellow Southern states Mississippi (42.9%) and West Virginia (41.7%). In contrast, 20.3% of households in the District of Columbia say they reduced or skipped expenses to pay their energy bill, followed by Vermont (24.4%) and Delaware (24.6%).
- West Virginia is the only state where at least 3 in 10 households say they couldn’t pay at least part of their energy bill in the past year. 30.2% report this in West Virginia. The District of Columbia is at the bottom at almost half that rate (15.2%).
- Black households are most likely to report being unable to pay at least part of their energy bill. This is cited by 40.0% of Black households, versus 35.9% of Latino households, 17.7% of white households and 12.1% of Asian households.
U.S. households are forgoing basic expenses to pay energy bills
While gas prices have made headlines with high inflation and more commuters on the road, consumers aren’t only cutting costs so they can pay at the pump. In fact, more than one-third (33.9%) of U.S. households say they reduced or skipped necessities like medicine or food to pay an energy bill in the past 12 months.
Meanwhile, some households tried reducing their home energy use to make ends meet, even if it meant risking their health. In fact, just over 1 in 5 (20.8%) households say they kept their homes at temperatures that felt unsafe or unhealthy. Regardless of what they’ve done to keep costs down, though, nearly one-quarter (23.1%) of U.S. households report they’ve been unable to pay at least part of their energy bill in the past year.
How energy costs have impacted U.S. households over the past 12 months
| Impact on household | % of U.S. households |
|---|---|
| Household reduced or forwent expenses for basic household necessities, such as medicine or food, to pay an energy bill | 33.9% |
| Household kept home at a temperature that felt unsafe or unhealthy | 20.8% |
| Household was unable to pay an energy bill or unable to pay the full bill amount | 23.1% |
Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.
This comes as electricity prices have increased by 16.0% per kilowatt-hour (kWh) in the past 12 months. In the same period, natural gas prices rose 33.6%. Unexpected gas shortages are largely to blame here, mainly due to international conflicts.
According to the U.S. Energy Information Administration (EIA), natural gas exports from Russia to Europe reached their lowest level in 40 years, prompting the U.S. to export large amounts of its already limited inventory to help fill in the gaps.
Despite rising prices, energy demand has remained high within the U.S. In fact, the EIA estimates that U.S. households consumed 1.7% more electricity this summer than last year’s. That’s because this year brought a particularly sweltering summer — the third-hottest on record, according to the National Oceanic and Atmospheric Administration (NOAA).
After a scorching summer, households in Southern states most likely to forgo basic expenses to afford energy costs
Southerners are most likely to reduce or skip basic expenses to afford their energy bills, according to our analysis of U.S. Census Bureau Household Pulse Survey data. Texas tops the list, with 44.8% of households forgoing necessities for energy. The Lone Star State is followed by Mississippi (42.9%) and West Virginia (41.7%).
Households in these states endured an especially hot summer. Texas saw its second-warmest summer on record, while Mississippi had one of the top-10 warmest Junes on record. 2021 was no breeze, either. In fact, July 2021 was Earth’s warmest month on record, which certainly contributed to rises in energy expenses. West Virginia had its 11th warmest summer in 2021.
States with the highest percentage of households that reduced basic expenses to afford energy costs
| Rank | State | % of households that reduced basic expenses |
|---|---|---|
| 1 | Texas | 44.8% |
| 2 | Mississippi | 42.9% |
| 3 | West Virginia | 41.7% |
| 4 | Oklahoma | 41.6% |
| 5 | Alabama | 41.4% |
Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.
While the heat makes a big difference, LendingTree chief credit analyst Matt Schulz says it’s not the only factor.
“There’s no question that income plays a big role, too,” he says. “Mississippi and West Virginia are among the lowest-income states in the country, which means less financial margin for error for people who live there. Inflation has shrunk that already-razor-thin margin for error to zero for many people. When that happens, payments get missed and expenses get slashed.”
On the other end of the list, 20.3% of households in the District of Columbia say they reduced or skipped expenses to pay their energy bill — the lowest of any state. D.C. is followed by Vermont (24.4%) and Delaware (24.6%).
States with the lowest percentage of households that reduced basic expenses to afford energy costs
| Rank | State | % of households that reduced basic expenses |
|---|---|---|
| 1 | District of Columbia | 20.3% |
| 2 | Vermont | 24.4% |
| 3 | Delaware | 24.6% |
| 4 | Oregon | 24.8% |
| 5 | Minnesota | 25.1% |
Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.
Households in the District of Columbia and Delaware have income levels above the U.S. median, while the median in Vermont is just below.
The three states have moderate summer temperatures. In D.C., normal summer temperatures are 78.9 degrees Fahrenheit, on average, and the last two summers were only slightly warmer. Vermont and Delaware are similarly temperate. Although both had a few days of extreme heat over the past two summers, Vermont only broke high temperatures twice.
Full state rankings
Percentage of households that reduced basic expenses to afford energy costs
| Rank | State | % of households that reduced basic expenses |
|---|---|---|
| 1 | Texas | 44.8% |
| 2 | Mississippi | 42.9% |
| 3 | West Virginia | 41.7% |
| 4 | Oklahoma | 41.6% |
| 5 | Alabama | 41.4% |
| 6 | Louisiana | 39.0% |
| 7 | Arkansas | 38.9% |
| 8 | Montana | 38.0% |
| 9 | New York | 37.6% |
| 10 | New Mexico | 37.0% |
| 11 | South Carolina | 36.7% |
| 12 | Indiana | 36.0% |
| 13 | Illinois | 35.7% |
| 14 | Nevada | 35.6% |
| 15 | Florida | 35.5% |
| 16 | Georgia | 34.7% |
| 17 | Pennsylvania | 34.6% |
| 18 | Ohio | 34.1% |
| 19 | Arizona | 33.8% |
| 19 | Alaska | 33.8% |
| 19 | New Jersey | 33.8% |
| 22 | Wyoming | 33.6% |
| 23 | Michigan | 33.4% |
| 24 | Rhode Island | 32.6% |
| 25 | Tennessee | 32.3% |
| 25 | Kentucky | 32.3% |
| 27 | Connecticut | 32.0% |
| 28 | California | 31.7% |
| 29 | Kansas | 31.6% |
| 30 | Hawaii | 31.3% |
| 31 | New Hampshire | 30.7% |
| 32 | Missouri | 30.5% |
| 33 | Nebraska | 30.4% |
| 34 | Massachusetts | 30.1% |
| 35 | Washington | 29.7% |
| 35 | North Dakota | 29.7% |
| 37 | South Dakota | 29.1% |
| 38 | Idaho | 28.6% |
| 38 | Virginia | 28.6% |
| 40 | Maine | 28.2% |
| 40 | Maryland | 28.2% |
| 42 | North Carolina | 27.6% |
| 43 | Iowa | 27.2% |
| 44 | Utah | 26.3% |
| 45 | Colorado | 26.0% |
| 46 | Wisconsin | 25.8% |
| 47 | Minnesota | 25.1% |
| 48 | Oregon | 24.8% |
| 49 | Delaware | 24.6% |
| 50 | Vermont | 24.4% |
| 51 | District of Columbia | 20.3% |
Source: LendingTree analysis of U.S. Census Bureau Household Pulse Survey data.
Households in West Virginia most likely to be unable to pay part of their energy bills
By state, West Virginia ranks highest for the percentage of households unable to pay at least part of their energy bill. Within the state, 30.2% say they struggled to pay at least part of one energy bill in the past 12 months, making it the only state above 30%. Comparatively, just 15.2% of households in the District of Columbia say the same — the lowest of any state.
Income plays a similar role here. In West Virginia, the median household income is $48,037 — significantly less than the median household income of $90,842 in D.C. In fact, 38.1% of U.S. households earning less than $50,000 say they can’t pay at least part of an energy bill. That’s compared with 16.1% of U.S. households with an income between $50,00 and $149,999.
Full state rankings
Percentage of households unable to pay at least part of their energy bill
| Rank | State | % of households unable to pay |
|---|---|---|
| 1 | West Virginia | 30.2% |
| 2 | Texas | 29.9% |
| 3 | Alabama | 28.9% |
| 4 | Rhode Island | 28.8% |
| 4 | Pennsylvania | 28.8% |
| 6 | Connecticut | 28.7% |
| 7 | Illinois | 28.5% |
| 8 | New York | 28.4% |
| 9 | Arkansas | 27.4% |
| 10 | Indiana | 26.8% |
| 10 | New Mexico | 26.8% |
| 12 | Oklahoma | 26.6% |
| 13 | Ohio | 26.5% |
| 14 | New Jersey | 26.0% |
| 15 | Louisiana | 25.9% |
| 16 | Mississippi | 24.0% |
| 17 | South Carolina | 23.5% |
| 18 | New Hampshire | 23.1% |
| 19 | Nevada | 21.8% |
| 19 | Massachusetts | 21.8% |
| 19 | Michigan | 21.8% |
| 22 | Florida | 21.7% |
| 23 | Vermont | 21.4% |
| 24 | Georgia | 21.3% |
| 24 | California | 21.3% |
| 26 | Maine | 21.1% |
| 27 | North Dakota | 21.0% |
| 28 | Maryland | 20.9% |
| 29 | Wyoming | 20.7% |
| 29 | Kansas | 20.7% |
| 31 | Missouri | 20.6% |
| 32 | Alaska | 20.4% |
| 33 | Kentucky | 20.3% |
| 33 | Iowa | 20.3% |
| 35 | Idaho | 20.1% |
| 36 | Hawaii | 19.7% |
| 37 | Minnesota | 19.5% |
| 38 | Virginia | 19.4% |
| 39 | Montana | 19.3% |
| 40 | Wisconsin | 18.9% |
| 41 | Arizona | 18.6% |
| 42 | Washington | 18.1% |
| 43 | South Dakota | 16.9% |
| 44 | Tennessee | 16.8% |
| 45 | Oregon | 16.5% |
| 46 | Colorado | 15.8% |
| 46 | North Carolina | 15.8% |
| 48 | Delaware | 15.7% |
| 49 | Nebraska | 15.5% |
| 50 | Utah | 15.3% |
| 51 | District of Columbia | 15.2% |
Source: LendingTree analysis of U.S. Census Household Pulse Survey data.
Black households most likely to report inability to pay part of their energy bills
By race, 40.0% of Black households report they couldn’t pay at least part of their energy bill in the past 12 months. They’re followed by Latino households at 35.9%. Meanwhile, 17.7% of white households and 12.1% of Asian households say similarly.
Data from the Federal Reserve reveals that on average, Black and Latino households earn about half as much as white households. Families of other ethnic and racial backgrounds — which include Asian families — have lower wealth than white families but higher wealth than Black and Latino families.
That income gap indirectly affects one’s likelihood of experiencing extreme heat, too. Densely packed cities experience a “surface urban heat island” effect. A 2021 study published in Nature Communications journal found that Black and Latino residents are far more likely to experience these higher temperatures than white families — which can also impact their energy costs.
As winter approaches, here’s how you can combat high energy costs
After a brutal summer, the fall brings some relief for many families looking to cut back on their energy bills. But that relief won’t last long. In fact, the EIA predicts energy prices will remain historically high through 2023, including oil, natural gas, coal and electricity.
You’ll shell out more for heat this winter, too. The half of U.S. households who use natural gas to heat their homes should expect to spend 28% more than last year when the cold hits, according to the EIA. Those who use heating oil should expect a 27% increase from last winter, while homes that primarily use electricity and propane may pay 10% and 5% more, respectively.
You can do a few things to keep costs down, though. Schulz recommends:
- Revisit your budget. “If you haven’t tweaked your budget since last summer, you should,” he says. “With prices rising everywhere and energy costs being no exception, failing to account for those rising prices can lead to some really unpleasant surprises when those peak winter energy bills come due.”
- Build an emergency fund. While that’s easier said than done, having an emergency fund can be a lifesaver when unexpected expenses like sudden family sickness arise.
- Think small. “You don’t have to adjust your thermostat much at all to reduce your bill,” Schulz says. “Even just lowering it by a degree or two during the winter can have a real impact.” Make sure you keep your basic needs covered (knowing which bills to prioritize can help) and reduce any unnecessary expenses.
Methodology
LendingTree researchers analyzed U.S. Census Bureau Household Pulse Survey data to estimate the percentage of American households that said they reduced or skipped basic expenses to pay an energy bill in the past 12 months.
We also estimated the rate of households that reported being unable to pay at least part of their energy bill in the past year. Researchers tracked these figures at the national and state levels.
The Household Pulse Survey was fielded from July 27 to Aug. 8, 2022.