PUC Takes Major Steps to Address Energy Affordability for Low-Income Households

Utilities
Revises Policy on Customer Assistance Programs and Initiates Rulemaking for Universal Service Programs

HARRISBURG, PA — In a pair of recent related actions, the Pennsylvania Public Utility Commission (PUC) advanced two major proposals focused on achieving energy affordability for the Commonwealth’s most vulnerable households.

The Commissioners voted 3-2 to adopt a joint motion by Vice Chairman David W. Sweet and Commissioner Andrew G. Place which makes a series of sweeping updates to the PUC’s Policy Statement on Customer Assistance Programs (CAPs) – especially as it relates to lowering maximum “energy burden” thresholds for low-income individuals and families, which is the percentage of household income spent on energy usage, including heat and light.

Additionally, the Commission approved a joint motion by Chairman Gladys Brown Dutrieuille and Commissioner Place by a 3-2 vote, beginning the rulemaking process to develop new CAP regulations and update existing regulations for low-income utility-operated Universal Service and Energy Conservation Programs (USECPs) – with an emphasis on fulfilling the Commission’s mandate to “continue the protections, policies and services that now assist customers who are low-income to afford utility service.”

In their joint motion on the PUC’s CAP Policy Statement, Vice Chairman Sweet and Commissioner Place emphasized that revisions to these essential assistance programs are the result of a two-year holistic review of CAP and a thorough examination of energy burdens – underscoring the extremely high costs facing the poorest households in the state, even with existing assistance programs.

“The (PUC’s 2019) Energy Affordability Report noted that CAP customers – despite receiving discounted payments and/or debt forgiveness – had significantly higher energy burdens on average in comparison to non-CAP customers.  While non-CAP customers had an average combined energy burden of 4%, the average combined energy burden for a CAP customer was 12% to 14%. The study also illuminated that CAP households with an income at or below 50% of the FPIG (Federal Poverty Income Guidelines), regardless of heating or non-heating status and energy type, often had energy burdens well above the limits established in the CAP Policy Statement – for some utilities, as high as 20%. To put this into perspective, under existing policies, a customer with an annual household income of $10,000 can spend anywhere from $1,200 to $2,000 a year on electric and gas service combined.”

The policy statement amendments adopted today include a 6% maximum energy burden for the most vulnerable customers, noting that a household with an annual income of $10,000 could potentially save an average of $1,000 annually on electric and gas service.

“This action will have a particularly meaningful impact for the approximately 95,000 households with income from 0-50% of poverty enrolled in Pennsylvania utility CAPs, and all future households that would be income-eligible and in need of energy assistance,” said Vice Chairman Sweet and Commissioner Place.

The policy statement also addresses a series of other associated issues, including:

  • A multi-tiered approach to energy burdens based on a household’s level on the poverty income guidelines (0-50%, 50-100% and 100-150%), providing higher CAP credits to lower-income households,
  • New timelines and procedures to streamline recertification, which is the most common reason consumers are removed from CAP,
  • A standardized definition for “household income,” and,
  • Enhanced consumer education and outreach plans, to help increase awareness and participation in CAP.

“Energy services, whether electric or gas, are essential for health, safety, a livable home, child development and maintaining vibrant communities throughout Pennsylvania. Energy affordability is an unsustainable burden for many thousands of Pennsylvanians and today’s action meaningfully contributes to addressing this impediment while balancing the costs of this fundamental support,” noted Commissioner Place.

Vice Chairman Sweet and Commissioner Place offered statements in support of the motion while Commissioners John F. Coleman Jr. and Norman J. Kennard offered dissenting statements.

In a separate, but closely related action today, the Commission directed the PUC’s staff to prepare a rulemaking which addresses all of the amendments to the CAP Policy Statement that were approved today – giving the Commission definitive tools to enforce any necessary changes to the utilities’ CAPs, energy burden levels, CAP credit limits and customer education requirements.

Additionally, the rulemaking may address the Commission’s ongoing review of rules related to Low-Income Usage Reduction Programs (LIURPs), along with any other changes to ensure efficient and effective utility programs for low-income households.

That proposed rulemaking for universal service programs will be developed by the PUC’s Bureau of Consumer Services and Law Bureau, for consideration by the Commissioners during the first quarter of 2020.

Commissioner Coleman issued a dissenting statement.

Source: Pennsylvania Public Utility Commission

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