Energy affordability for all: How states are reducing energy cost burdens through rate-setting

By Madeline Thompson, EDF Legal and Regulatory Intern

Energy affordability has become a major concern for customers as utility rates rise across the country. Since 2001, the average cost of electricity per kilowatt has nearly doubled for residential customers, according to the U.S. Energy Information Administration. Low-income households are facing the brunt of this burden. According to 2024 research, low-income households in the U.S. spend about 17% of their income on utilities, about three times the national average.

To combat the effects of rising energy costs and the major toll they take on low-income households, some states have implemented a “low-income discount rate.” The idea is to lower electric bills for those who make less than a certain income threshold, such as below the state median income or the federal poverty line. However, implementation varies from state to…