More than 51 million families across our nation struggle to pay high electricity bills, and rates are still rising.
Across the Southeast, particularly in rural communities, families who work hard to get by are already paying 20% of their entire household incomes to keep the lights on, and even bigger bills are coming. So far this year, utilities have requested an additional $29 billion in rate increases, nearly doubling versus the same period last year. Recently-adopted federal tax increases on renewable energy are projected to contribute towards an additional 9-18% rate increase within the next five years, and the race to build and deliver enough new generation to ensure US energy dominance and AI leadership could push the cost of energy even higher.
Higher rates will mean bigger electricity bills and fewer groceries unless Southeastern states take decisive action.
To take the right decisive action, we must first appreciate that people pay bills, not rates. That means bills can go down even as rates go up if you tackle the root cause of high household energy burdens – which is the terrible state of rural housing across our region. Whether rates are high or low, you’re going to pay a hefty bill if you have no insulation and holes in the roof, floor, and window sashes. Energy efficiency programs on their own can’t fix the problem because housing repair needs stand in the way of deploying efficiency measures.
I see it every day in Groundswell’s work across the Southeast, and I’ve seen it in my own life. My grandparents worked in the cotton mills of West Georgia. In the 1990s, their homes didn’t have air conditioning, heat in the bedrooms, or a stitch of insulation. Keeping the house warm enough for the pipes not to freeze meant a power bill over $400 – and that was 30 years ago. Staying cool wasn’t an option.
It’s no different for thousands of our neighbors now.
More than 50% of the hundreds of Georgia and Alabama homes we have signed up for Groundswell’s SOUL (Save on Utilities Longterm) program can’t move forward with even simple weatherization without extensive repairs, which typically include roof replacement, mold remediation, and repairing wood rot.
To achieve an average energy savings of 34% — which translates to hundreds of dollars in savings for families paying $700/month for electricity during the summer months to cool a 900 square foot home – we deploy up to $20,000 for roof and related repairs. Fixing homes first to enable energy efficiency improvements requires our team to weave together household eligibility, technical, and compliance requirements across multiple federal, state, local, and utility programs that vary in their applicability by street address. We call this morass of well-intended duplication, misalignment, and national mandates that don’t work in local markets the “complexity tax,” and the time, money, and effort it wastes drives up energy costs, rates, and people’s bills.
Repeal the Complexity Tax
So, to repair rural housing and deploy energy efficiency at a scale that would cut energy burdens in half across our region, we must first repeal the complexity tax.
Groundswell does this at the local level with grit, expertise, and our AI data platform, but Southeastern Governors and our Congressional delegation should work together to consolidate efficiency and housing repair programs, align enrollment requirements, and let states take the lead so that the resulting program requirements and delivery mechanisms are a match for each state’s housing stock, contractor market, and related repair and efficiency needs.
One-size-fits-all may sound good in Washington, but it typically means one-size-fits-none on the ground.
It’s important to do hard things the right way, which takes time, and repealing the complexity tax will be hard. The complexity tax is the result of decades of overlapping legislation and regulation that have not kept pace with a dynamic market, and it cannot be repealed and replaced with something contemporary, efficient, and better overnight. To make sure Southeastern families don’t pay the price and don’t end up subsidizing the high infrastructure cost to serve the many AI data centers coming to our region, our region’s leaders should freeze residential rates.
Freeze Residential Rates
State and utility leaders are already wrestling with how to fairly allocate the costs of the massive energy infrastructure expansion we need to meet rising energy demand so that grandma doesn’t bear the cost burden of new transmission and power generation to serve trillion-dollar hyperscalers like Amazon. States base electricity rates on what it costs to serve different types of customers — from residential households to large industrials – and it’s not yet clear what the rapidly evolving cost to serve AI data centers will be. For example, the State of Virginia, led by Gov. Glenn Youngkin, has led an extensive study on the impact of data centers on residential electricity rates. Gov. Brian Kemp of Georgia has praised his state’s recent three-year freeze on residential rate increases, citing how the deal will enable additional economic development, including data centers.
During my service as a Board member of the Tennessee Valley Authority, we instructed TVA to study a new rate class for data centers while approving a power contract to Elon Musk’s xAI. Freezing residential rates, as Georgia has done, gives state leaders time to complete cost studies to make sure data centers and other large energy consumers are paying their fair share while also making room to repeal the complexity tax the right way.
Repair Rural Housing
The Rural Southeast has fed, clothed, and kept the power running for America with its farms, textile mills, natural resources, and labor. Now, our region is powering America’s AI leadership by hosting a growing fleet of data centers. For our people to prosper, our region needs affordable energy. To keep energy affordable, our people need dignified, efficient housing that’s in good repair. And that means we need to see rural housing as energy infrastructure and make the same scale of investment in our rural communities as we do in new generation and transmission to serve new AI data centers.
While many utilities across our region have energy efficiency programs, utilities can’t repair rural housing on their own. For example, as a member of TVA’s Board of Directors, I supported TVA’s most significant single investment in its EnergyRight efficiency program, totaling more than $1.5 billion. Still, even that scale of support can’t reach the homes that need major enabling repairs. Moreover, utilities can only spend ratepayer funds on efficiency measures that have a direct impact on reducing energy consumption, not the roof and other repairs that are necessary but don’t have quantifiable energy benefits. In addition, many municipal utilities are prohibited by state constitutions from investing in private property, which makes sense as an anti-corruption measure, but which also means municipal utilities can’t directly invest in residential energy efficiency – though they can support programmatic approaches using community development funds.
Philanthropic and corporate partnerships can help fill the home repair gap. Still, with federal investments being severely cut or eliminated, states must step up to the plate to restore our region’s rural housing at scale as an investment in energy infrastructure that’s affordable, fair, and helps ensure the Southeast has enough power to keep state economies growing and keep the lights on.
Local solar and energy storage, like Groundswell’s Southeast Rural Power program, can also play a role in energy conservation and bill savings by adding resilience and capacity at the neighborhood level and delivering the resulting infrastructure cost savings to residents.
In conclusion, I’ll say it once more for the folks at the back, people pay bills, not rates.
State leaders can cut bills even as rates rise by reducing the amount of energy people need to keep safe and comfortable at home, which also reduces energy waste and makes more capacity available on the grid. Repairing rural housing is, therefore, an investment in affordable energy infrastructure. State leaders, working with their federal counterparts, must repeal the complexity tax to make way for rural housing repairs – and they must take the time (but not too much time) to do it right. Freezing residential electricity rates like those in Georgia can give Southeastern families some breathing room. At the same time, energy engineers and elected leaders chart a specific and time-bound pathway for how to keep growing and keep the lights on without breaking people’s backs.
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L. Michelle Moore is CEO of Groundswell, author of “Rural Renaissance,” and a former Board member and Audit Committee Chair of the Tennessee Valley Authority.
