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Introduced by
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Referred to Committee on
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Date:
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Subject: Public service; regulation of utility corporations; low-income electric
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bill assistance program
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Statement of purpose: This bill proposes to create a statewide electric bill
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payment assistance program for low income residential customers.
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AN ACT RELATING TO AN ELECTRIC PAYMENT ASSISTANCE
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PROGRAM FOR LOW INCOME VERMONTERS
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It is hereby enacted by the General Assembly of the State of Vermont:
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Sec. 1. 30 V.S.A. § 209c is amended to read:
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§ 209c. Electricity affordability program
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(a) The board of public service shall design a proposed electricity
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affordability program in the form of draft legislation. The program shall be
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developed with the aid of an electricity affordability program collaborative.
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The collaborative, composed of representatives from the electric utilities,
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residential customers, consumer representatives, low income program
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representatives, elderly program representatives, the department of public
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service, the department of human services, and other stakeholders identified by
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the board, shall aid in the development of an electricity affordability program,
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as well as requirements for the implementation and funding of the program.
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The proposed electricity affordability program will be presented to the
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Vermont general assembly in the form of draft legislation for consideration in
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January 2007.
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(b) The proposed electricity affordability program shall provide
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assistance in the payment of electricity bills for eligible low income residential
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customers served by electric companies subject to the jurisdiction of the board.
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(c) In developing the electricity affordability program, the board shall
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review the successes and administrative burdens of similar programs in
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operation in other states and consider the following goals, which shall be
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afforded equal weight in formulating the program:
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(1) The need to provide payment assistance to low-income customers at
and below 150 percent of the Federal Poverty Level;
(2) The need for automatic screening and enrollment methods of
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eligible customers by means of information obtained from existing means-
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tested financial assistance programs administered by other Vermont agencies
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such as food stamps, Medicaid, LIHEAP or TANF; and
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(3) The need to design a program that is funded by all customer classes
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in an equitable and reasonable manner and that results in the reimbursement of
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net incremental costs incurred by electric utilities to implement the program,
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taking into consideration the benefits as well as the costs. (Added 2005, No.
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208 (Adj. Sess.), § 10a.)
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§ 209c. LOW INCOME ELECTRIC ASSISTANCE PROGRAM
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(a) Purpose. It is the purpose of this section to:
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(1) Recognize that electricity is a basic necessity to which all residents
of the state should have access;
(2) Provide payment assistance to residential consumers whose
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electricity bills represent a disproportionate share of household income in
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comparison to the statewide average and who qualify based on income using
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program designs that minimize the administrative costs to be incurred in the
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development and implementation of the assistance program;
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(3) Encourage participating customers to use electricity efficiently and
participate in conservation and energy efficiency measures that reduce the
customers’ bills and payment requirements; and
(4) Establish a funding mechanism for the provision of payment
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assistance that is sufficient to cover all costs to be incurred in the development
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and implementation of the program that avoids the imposition of un-
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compensated costs on the agency of human services or participating electric
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companies.
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(b) Definitions. For the purposes of this section:
(1) “Amount overdue” means the amount that an electric company has
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properly billed to an eligible customer that has not been paid by the due date of
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the bill or by a date otherwise agreed upon.
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(2) “Eligible customer” means any residential customer of an electric
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company who is taking, or seeks to establish, residential service, not including
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seasonal service; and who meets one of the following requirements:
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(A) The customer’s household receives assistance from any program
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administered by the agency of human services for which eligibility is based on
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a means-test with a threshold at or below 150 percent of federal poverty
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guidelines as defined annually by the U.S. Department of Health and Human
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Services as certified by the agency of human services; or
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(B) The customer’s household income is at or below 150 percent of
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federal poverty guidelines as defined annually by the U.S. Department of
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Health and Human Services and certified by the agency of human services.
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(3) “Fiscal agent” means an entity selected by the public service board
to receive and disburse funds under this section.
(4) “Low Income Electric Assistance Program” (LIEAP) is a statewide
program to assist eligible customers in paying their electric bills.
(5) “LIHEAP” means “Low Income Home Energy Assistance
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Program,” which is a federally funded program that provides financial
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assistance grants to needy households for home energy bills and is
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implemented by the agency of human services.
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(6) “Participating customer” means an eligible customer who has
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applied and has been determined to be eligible for LIEAP by the agency of
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human services.
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(7) “Program administrator” means the agency of human services.
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(8) “Pre-program arrears” means an eligible customer’s electric service
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account amount overdue at the time the customer is determined to be eligible
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for the LIEAP. This amount may consist of a customer’s overdue amount that
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is currently billed on the customer’s electric service account and any other
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prior unpaid bill for residential electric service that is owed by the customer to
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the same electric company.
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(9) “Residential customer” means any person who seeks to establish or
is receiving residential service from an electric company.
(c) The board shall adopt by rule or order a LIEAP that:
(1) Shall be available to eligible customers served or seeking to be
served by electric companies subject to the jurisdiction of the board.
(2) Shall utilize the agency of human services to screen, prioritize and
certify program applicants for participation in the LIEAP.
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(3) Shall be funded by an assessment on the customers of all electric
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distribution companies subject to the jurisdiction of the board. The funding
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amount shall be available for LIEAP benefits, including arrears forgiveness
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payments, and reimbursement of incremental administrative costs incurred by
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the electric utilities and the program administrator. Costs of the fiscal agent
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and the evaluations required by section (o) shall also be paid from the LIEAP
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assessment. Any material changes in the program design, customer assessment
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or budget for the LIEAP shall be adopted by rule or order based on a
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determination by the board that such changes in program design, customer
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assessment, and program budget will ensure that the assistance provided by the
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LIEAP is consistent with the needs of participating customers and that all
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reasonable costs of the program will be reflected in the assessment to be
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charged to the customers of all electric distribution companies. Electric
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distribution companies shall pay the gross receipts tax required by 30 V.S.A §
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received from LIEAP in payment of participating customers’ electric bills, but
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shall not pay the taxes on amounts collected in the form of the affordability
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program charge.
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(4) Shall establish a tiered discount program which shall include two or
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more income tiers. Within each tier, an “affordable” payment amount shall be
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calculated based on X% of income for the average household within the tier.
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(5) For each tier, one twelfth of the difference between the average
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household’s calculated “affordable” payment and the statewide average annual
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residential cost of electric service shall constitute the maximum monthly
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LIEAP credit. The credit shall not exceed the actual current month’s electric
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charges for the individual participating customer. A participating customer is
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responsible for all actual charges for electric service in excess of the fixed
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monthly credit. [See CVPS comments in transmittal letter]
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(6) May permit a distribution company to require the customer to enter
into a budget billing plan. [See CVPS comments in transmittal letter]
(7) Shall include a pre-program arrears forgiveness component to ensure
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participants are able to afford current bills under the program. During each
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participant’s first term of LIEAP, with a particular electric distribution
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company, that company shall offer the participating customer an option to
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obtain forgiveness of the customer’s arrears balance pursuant to an arrears
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forgiveness program. The opportunity for arrears forgiveness shall apply only
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to arrears accumulated prior to the date on which the customer first enrolls in
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LIEAP and shall be available to each customer only once within any given
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utility service territory. Accept for participants enrolling in the LIEAP when it
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is first made available within a given distribution utility service area, only
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arrears incurred __months prior to the time of a participant’s enrollment shall
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be eligible for reimbursement through the pre-program arrears forgiveness
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component. [See CVPS comments in transmittal letter]
(8) Shall ensure that as a condition of program enrollment, a LIEAP
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participant shall accept no-cost or low-cost, demand-side management
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measures and programs that are available to the participant’s dwelling or rental
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unit unless the participant is a renter and the owner or landlord withholds the
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required consent.
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(d) It is the intent of the Legislature that LIEAP assistance will not be
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counted as income or as a resource in other means-tested assistance programs
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for low income households. LIEAP shall therefore be administered in a way
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that seeks to ensure that LIEAP assistance will not result in the loss of other
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federal or state assistance dollars.
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(e) This section does not confer any automatic right or entitlement on any
person.
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(f) The board shall establish by order or rule a nonbypassable volumetric
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charge to retail electric customers for the support of the LIEAP. The charge
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shall be known as the affordability program charge, shall be shown separately
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on each customer's bill, and shall be collected and remitted to the fiscal agent
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by the utility. When such a charge is shown, notice as to how to obtain
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information about the LIEAP shall be provided in a manner directed by the
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board. Balances in the fund shall be ratepayer funds, shall be used to support
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the activities authorized in this section, and shall be carried forward and remain
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in the fund at the end of each fiscal year. These monies shall not be available to
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meet the general obligations of the state. Interest earned shall remain in the
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fund.
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(g) Program funding associated with the costs of the LIEAP shall be
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recovered from all customers of each electric distribution company by means
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of the affordability program charge. The statewide revenue generated by the
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affordability program charge shall not exceed $_____ for any program year. In
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any year in which the cost of the program exceeds the cap on program funding,
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the agency of human services shall prioritize enrollment on the basis of
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income.
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(h) The board shall require electric distribution companies to maintain
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sufficient data on participating customers so that the costs of and savings
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associated with the program can be determined, including participating
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customer arrearages, incidence of nonpayment, disconnection of service,
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reconnection of service, frequency of bill payment, overdue balances incurred,
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write-off of uncollectible expense, LIEAP customer contacts and disputes,
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payment arrangement terms, and other relevant electric company operations
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and maintenance expenses, and impacts on electric company cash and working
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capital.
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(i) The program administrator shall implement the LIEAP in coordination
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with the delivery of LIHEAP and the weatherization assistance program, other
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statewide financial assistance programs, and community-based organizations
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that already have a significant role in the implementation of energy and
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financial assistance programs for low income households to assure the most
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efficient determination of eligibility and benefit amount in coordination with
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existing programs in this state.
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(j) The fiscal agent shall be selected by the board after competitive bidding.
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The duties of the fiscal agent shall be determined by a contract with a term of
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not greater than five years.
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(k) During each program year, the program administrator and the fiscal
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agent shall track and monitor all funding, benefits and expenses of the
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program. The fiscal agent shall provide the board and the program
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administrator with monthly reports in electronic data format. The board and the
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program administrator shall annually provide the legislature with a report
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detailing the revenues collected and the expenditures made for the LIEAP
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under this section.
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(l) The program administrator shall be entitled to receive actual incremental
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administrative costs associated with the implementation of the LIEAP,
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including reimbursement of costs incurred by any local community-based
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organizations. The fiscal agent shall reimburse electric companies for their
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actual reasonable incremental costs associated with the implementation and
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administration of the LIEAP.
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(m) The program administrator shall develop an automatic enrollment
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method such that potentially eligible participants are identified by the
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administrator and enrolled in the LIEAP. The board shall require that any
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entity that obtains access to customer-specific account and income information
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shall assure that such information remains private, and that the entity’s use of
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this private information will be limited to the implementation and goals of
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LIEAP. The efficiency utility established under 30 V.S.A. § 209 shall be
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informed of all participants in the home heating fuel assistance program and
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the LIEAP. The transmittal of customer-specific information designed to
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screen electric customers for enrollment in LIEAP is intended to implement an
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additional benefit within the meaning of the consumer privacy policies of the
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federal Social Security Act.
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(n) The board shall require that customers who are automatically screened
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and enrolled in the LIEAP through the data matching process in subsection (m)
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of this section shall be informed of their enrollment in the program, the amount
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of the fixed credit that will appear on the customer’s electric bill, how to
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participate in the arrears forgiveness program, and the customer’s obligation to
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participate in no-cost or low-cost energy management services. Each customer
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shall also be offered an option to forego participation in or to opt out of the
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program.
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(o) The program administrator shall contract with an independent, third-
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party entity every two years to conduct an evaluation of the process and impact
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of the LIEAP, which shall analyze and determine the impact of the program on
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program participants and their ability to pay for and retain electric service, the
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efficiency and effectiveness of the administration of the program, the impact of
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the program on electric company credit and collection expenses, including cash
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working capital and uncollectible expense, and generally assess the costs and
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benefits of the program. The reasonable costs of the evaluation required under
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this section shall be reimbursed from the LIEAP funds.
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(p) The program administrator, the board, the department of public service
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and the electric companies shall work together to identify cost-effective ways
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to transfer information electronically and to employ available protocols that
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will minimize administrative costs.
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(q) The electric companies shall bill and collect the monthly bill of a
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LIEAP customer pursuant to the same programs and policies as applicable to
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residential customers generally.
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(r) Each electric distribution company shall file quarterly and annual
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reports with the program administrator, the board and the department of public
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service that cumulatively summarize and update program information.
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Sec. 2. 30 V.S.A. § 209(b)(4) is added to read:
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(4) Prescribe a monthly and rolling 12-month cumulative reporting
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requirement for electric distribution companies that may include information
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on disconnection of service, reconnection of service, deposits, payment
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arrangements, and other indicia of electric company credit and collection
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programs. Such reporting requirements shall require that, with respect to
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residential customer class information, the reporting data be reported
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separately for residential customers as a whole and for those customers
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identified in the electric company’s records as low income residential
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customers as indicated by receipt of financial and energy assistance applied to
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the customer’s account.
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Program funding alternatives 1: volumetric charge apportioned equally
among customer classes based on usage (duplicated from the full draft
above)
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(f) The board shall establish annually by order or rule a nonbypassable
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volumetric charge for the support of the LIEAP. The charge shall apply to all
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customer classes in proportion to their electric usage. The charge shall be
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known as the affordability program charge, shall be shown separately on each
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retail electric customer's bill, and shall be collected and remitted to the fiscal
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agent by the electric distribution utility. When such a charge is shown, notice
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as to how to obtain information about the LIEAP shall be provided in a manner
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directed by the board. Balances in the fund shall be ratepayer funds, shall be
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used to support the activities authorized in this section, and shall be carried
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forward and remain in the fund at the end of each fiscal year. These monies
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shall not be available to meet the general obligations of the state. Interest
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earned shall remain in the fund.
Program funding alternatives 2: fixed per-meter charge apportioned
unequally across customer classes.
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(f) The board shall annually establish a nonbypassable, fixed, per-meter
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charge sufficient to meet the funding requirements of the program. The charge
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shall be established such that X percent of total program funding shall be
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supported by a fixed charge on electric residential customers, Y percent by a
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fixed charge on electric commercial customers and Z percent by a fixed charge
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on electric industrial customers. The charge shall be known as the affordability
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program charge, shall be shown separately on each retail electric customer's
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bill, and shall be collected and remitted to the fiscal agent by the electric
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distribution utility. When such a charge is shown, notice as to how to obtain
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information about the LIEAP shall be provided in a manner directed by the
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board. Balances in the fund shall be ratepayer funds, shall be used to support
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the activities authorized in this section, and shall be carried forward and remain
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in the fund at the end of each fiscal year. These monies shall not be available to
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meet the general obligations of the state. Interest earned shall remain in the
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fund.
Program funding alternatives 3: charge apportioned across customer classes
based on revenue rather than usage.
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(f) The board shall establish annually by order or rule a nonbypassable
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charge for the support of the LIEAP that shall be calculated as percentage of
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utility revenue. The charge shall apply to all customer classes in proportion to
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their electric usage. The charge shall be known as the affordability program
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charge, shall be shown separately on each retail electric customer's bill, and
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shall be collected and remitted to the fiscal agent by the electric distribution
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utility. When such a charge is shown, notice as to how to obtain information
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about the LIEAP shall be provided in a manner directed by the board. Balances
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in the fund shall be ratepayer funds, shall be used to support the activities
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authorized in this section, and shall be carried forward and remain in the fund
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at the end of each fiscal year. These monies shall not be available to meet the
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general obligations of the state. Interest earned shall remain in the fund.
Program funding alternatives 4: volumetric charge on residential customers;
per-meter charge on commercial and industrial customers.
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(f) The board shall establish annually by order or rule a nonbypassable
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volumetric charge for the support of the LIEAP. The charge shall apply to
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residential customers and shall be designed to fund X percent of the costs of
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the LIEAP program. The board shall establish separate, per-meter charges that
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shall apply to commercial and industrial customers and shall be designed to
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fund Y percent of the costs of the LIEAP program. The charge shall be known
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as the affordability program charge, shall be shown separately on each
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customer's bill, and shall be collected and remitted to the fiscal agent by the
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electric distribution utility. When such a charge is shown, notice as to how to
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obtain information about the LIEAP shall be provided in a manner directed by
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the board. Balances in the fund shall be ratepayer funds, shall be used to
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support the activities authorized in this section, and shall be carried forward
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and remain in the fund at the end of each fiscal year. These monies shall not be
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available to meet the general obligations of the state. Interest earned shall
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remain in the fund.
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