The City of Los Angeles has committed to transition to 100% renewable energy by 2035. In 2021, the Los Angeles Department of Water and Power (LADWP), in partnership with the National Renewable Energy Laboratory (NREL), determined the technical feasibility and necessary investments to transition to 100% renewable energy. To ensure that the benefits of 100% renewable energy are equitably distributed, LADWP launched the LA 100 Equity Strategies Study in partnership withNREL and UCLA.

An integral part of that equity effort has been to better understand and document the challenges facing small ethnic-owned businesses (EOBs), which are a vital part of Los Angeles’ business sector and form the backbone of our economy, generating jobs and wealth. To better understand the challenges facing EOBs and to assist LADWP in developing equitable policies, programs, and practices, the UCLA Center for Neighborhood Knowledge (CNK) and the UCLA Latino Policy and Politics Institute (LPPI) embarked on a one-year community-informed research project to learn more about the hurdles facing small EOBs and entrepreneurs in the Los Angeles region regarding the effects of the pandemic, environmental sustainability, energy burden, the anticipated effects ofclimate change, and potential challenges to adapt to the transition to 100% renewable energy. The study included two major components: a survey of over 500 EOBs and qualitative insights provided by stakeholders, LADWP staff, and pilot workshops.

A new report authored by the UCLA Luskin Center for Innovation and Center for Neighborhood Knowledge measures the extent of utility debt accumulation among customers served by the Los Angeles Department of Water and Power. 

Disparities in unpaid bills predate COVID-19 but have deepened since the pandemic’s outbreak. Using data from a November 2020 California State Water Resources Control Board survey, the researchers found one-quarter to one-third of all Los Angeles households faced financial difficulties paying for their utilities. 

“We didn’t expect the magnitude to be this big,” said Silvia R. González, co-author of the study and a senior researcher at the Luskin Center for Innovation. “For many families, this means choosing between keeping their lights on or skipping meals or medical treatment.”

The debt burden is unevenly distributed across Los Angeles — 64% of the population in severely affected neighborhoods are Latino. Black communities also face disproportionate debt, and racial disparities persist even after accounting for socioeconomic characteristics. Further, the study found that lower-income neighborhoods, residents with limited English proficiency and renters face unequal debt burdens. 

Early on in the pandemic, Governor Newsom suspended water and energy utility shut-offs, which has provided continued utility access for households in California. But accumulating debt has not been forgiven, and this crisis will need to be resolved once the suspension is lifted. 

Researchers said they hope to guide policymakers and utility operators in formulating targeted debt-relief programs, and calls for financial support from COVID-19-related aid to ensure that vulnerable Angelenos will still have access to water and energy after the pandemic.  

“We need an equitable relief plan,” said González. “These communities are already historically underserved areas and they’ve been left behind more broadly during the pandemic. These debts will be impossible for many families to repay.”