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Low Income Consumer Protection

| Written by John Farrell | No Comments | Updated on Jan 27, 2009 The content that follows was originally published on the Institute for Local Self-Reliance website at https://ilsr.org/low-income-consumer-protection/

Funding commitments for low-income energy programs is a critical component of a sound energy policy. Typically, low-income energy programs are focused on helping families pay their energy bills. In many cases there is also a component of the program that targets energy-efficiency improvements for low-income households. Overall, funding for low income households held firm or modestly increased after electric restructuring in the 1990s, although in many cases the before and after comparison is misleading because utilities decreased their spending on low income households significantly between 1993 and 1998.

Wethink that the states below have made the best commitments to low-income households in the era of electric restructuring since they are spending a higher percentage of utility revenues on these customers.

New Hampshire
Electric restructuring legislation was passed into law in New Hampshire in 1996 and contained provisions that authorized funding for low-income programs. In June 2000 the legislature passed additional legislation that required utilities to charge their customers a system benefits charge (SBC) for energy efficiency and low-income programs of 2.0 mills/kWh. In November 2000, the NH Public Utilities Commission allocated 1.2 mills/kWh to low-income programs and and 0.8 mills/kWh to energy efficiency.

NHLow Income Spending – $10.4 million/yr (1.2 mills per kWh, $0.0012/kWh)equivalent to about 1 percent of utility revenues, and $8.65 per capita

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Ohio
Ohio’s electric restructuring law (Substitute Senate Bill 3) was passed in July 1999 and contained provisions requiring utilities to charge their customers a system benefits charge (SBC) for various programs. The law also included a universal service rider for low-income energy assistance and efficiency programs.

Oneparticularly nice program is the Percentage of Income Payment Plan(PIPP). PIPP is an extended payment arrangement that requires regulated gas and electric companies to accept payments based on a percentage of the household income.

Eligibility for PIPP?

  • Your utility company must be regulated by the PUCO;
  • You must apply for all energy assistance for which you are eligible; and,
  • You must have a gross yearly household income at or below 150 percent of the federal poverty level. If you are not eligible based on the 12-month "test," you may qualify for PIPP based on your income for the most recent three months.

PIPP allows eligible customers to make lower energy payments. If you qualify, you can pay 10 percent of your gross monthly household income to the utility company providing your main heating source and five percent to the utility company providing your secondary heating source. You can choose to join PIPP for only one utility service. If the company provides both gas and electric services or if the customer has an all-electric home, the payment is 15 percent of the gross monthly income. If your monthly household income is at or below fifty (50%) percent of the Federal Poverty level, PIPP customers will pay three percent instead of five percent for the secondary source of heat.

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Pennsylvania
Pennsylvania’s electric restructuring law was passed in 1996 and contained provisions for energy efficiency and low-income funding. The law required minimum funding levels and individual utilities have been exceeding those levels in their individual plans. The low income programs include 20 percent for efficiency.

Pennsylvania low income spending – $85 million/yr (0.7 mills per kWh, $0.0007/kWh)equivalent to about 0.9 percent of utility revenues, and $7.08 per capita

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Colorado
Another example that provides a good framework for a low-income energy program can be taken from the results of the settlement aggreements during the Northern States Power/New Century Energies merger proceedings that created Xcel Energy. The Colorado Public Utilities Commission approved the settlement between the utilities and alow-income advocacy alliance of Catholic Charities of Metropolitan Denver (CC) and the Colorado Energy Assistance Foundation (CEAF). The settlement addressed a host of low-income issues including:

  • Energy Assistance and energy efficiency assistance to low-income Colorado residents.
  • Funding for social agencies for computers, internet access and training for energy assistance agencies over a two-year period.
  • Design and implementation of a rate-affordability system for testing cost-effective means of delivering rate assistance to low-income consumers.
  • Annual reports on low-income payment troubles through 2009. The reports include information on termination of service, payment agreements, households in arrears, PUC complaints, impacts of energy efficiency and rate-affordability programs, and related matters.

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About John Farrell

John Farrell directs the Energy Democracy initiative at the Institute for Local Self-Reliance and he develops tools that allow communities to take charge of their energy future, and pursue the maximum economic benefits of the transition to 100% renewable power. More

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