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Lowest Income Families Faced Hardest Energy Burden in Ohio, Says Study From Americans for Balanced Energy Choices

Posted on: Monday, 25 February 2008, 09:01 CST

Ohioans who least could afford it spent nearly half their incomes last year on energy, and the bulk of middle-income Ohio families also suffered disproportionately from rising energy costs, a new report reveals.

The results of the study* provide a sound argument for making coal and the potential for ultra-clean coal part of Ohio's and the nation's energy and environmental policies, says Americans for Balanced Energy Choices (ABEC).

Almost 350,000 Ohio families had annual incomes of less than $10,000, and although they spent the least dollars on energy, their burden was more than 47% of their after-tax incomes. Families making more than $10,000 but less than $50,000 spent up to 19% on energy. But those making more than $50,000 spent less than 8% on energy.

ABEC notes that coal was a significant player in helping control electricity cost inflation, while other energy costs more than doubled. In 2007, 85% of Ohio's electricity was coal-generated.

"Coal has played a big part in easing the effects of skyrocketing energy costs," said Joe Lucas, ABEC executive director. "Many families already are sacrificing to pay for their energy needs, and for lots of people it threatens to be a budget-buster. That's why it's essential to keep coal in the energy mix as an efficient, affordable energy source in Ohio's future."

Ohioans have seen gasoline costs rise 104%, heating oil 125% and natural gas 67% since 2002. Electricity costs rose a modest 26% in that period.

ABEC believes coal is a vital resource helping to control rocketing energy prices and resulting burdens, and Ohio has an abundant supply of low-cost coal and potential to produce ultra-clean coal fuel products for consumers and industry.

Ohio lost 207,600 high paying manufacturing jobs between 2000 and 2005, in part because of soaring natural gas prices.

Energy impact on Ohio families

Annual income

<$10K

$10-30K

$30-$50K

<$50K

>$50K

Total

Residential energy

$1,412

$1,712

$1,982

$1,778

$2,487

$2,027

Transportation

$1,144

$1,941

$3,657

$2,521

$3,701

$2,997

Total energy cost

$2,556

$3,653

$5,639

$4,299

$6,188

$5,024

Average pre-tax income

$5,400

$19,695

$39,388

$25,597

$106,497

$62,939

Effective federal tax rate

0.0%

9.1%

14.1%

9.8%

23.2%

17.8%

Est. after-tax avg. income

$5,400

$17,903

$33,834

$23,088

$81,790

$51,736

Total after-tax energy burden

47.3%

20.4%

16.7%

18.6%

7.6%

9.7%

"Taking a wrong turn on our energy policies will, even if it is inadvertent, severely impact many Ohioans," Lucas added. "There simply is a point where individuals and families can no longer balance the essentials of food, housing, healthcare and energy costs with their take home pay."

The study notes that Ohio has an ample reserve of coal for electric generation and for the production of ultra-clean coal fuel products for industry and consumer uses.

"As we work for energy independence and environmental improvements, we should remember that electricity, produced mainly from domestic coal, has offered the most stable price trend over the past decade," Lucas said.

*The Rising Burden of Energy Costs on Ohio Families

To see a full copy of the report, go to www.americaspower.org.

Americans for Balanced Energy Choices is a non-profit, non-partisan group that promotes a dialogue with community leaders across the nation to discuss balancing America's growing demand for electricity with the need to protect the environment. ABEC counts more than 150,000 members nationwide, with 5,000 living in Ohio. Because of its prominence in the nation's energy mix, electricity from coal is a major focus of the dialogue. The Web site is www.americaspower.org.

Source: Business Wire

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