Review of Docket No. 5308
&
New Hampshire Electricity Assistance
Program History
Docket No. 5308

Board Investigation Into the Adoption and )
Implementation of Energy Programs for
)
Low-Income Households.
)

Hearing Officer’s Interim Report and Proposal for Decision


March 1990
Public Service Board Report and Closing Order

March 1993
Review of Docket No. 5308
December 1987 report from the Joint Committee on
Public Power, Public Advocacy, and Basic
Residential Rates of the Vermont Legislature.
The report recommended that “[t]he Public Service
Board, with the assistance of the PSD, the
Department of Social Welfare, and the Tax
Department, should develop a long-term program to
address comprehensive energy needs of lowincome persons, including those who live in rental
property.”
Review of Docket No. 5308
Interim Report and P for D

We do not read 30 V.S.A. §209 as authorizing the Board to abandon costbased pricing in areas other than deposits, disconnects, reconnections and
other areas identified in that section, even if there are powerful policy
arguments in favor of doing so. Programs that deliberately allow major noncost-based cross-subsidies should require specific legislation authorization.
Review of Docket No. 5308
Interim Report and P for D

The DPS argued that the cost of the BENP, equal to the difference between
actual energy usage and the participant’s co-payment amount, would be
covered by the avoided costs of disconnection, reconnection, repayment plans
and working capital and would result in no cross-subsidy. If supported by the
facts, this calculator would overcome objections that such rates are
discriminatory. Unfortunately, on the facts in the current record, the hearing
officers have determined that even with the most optimistic consumptions about
the number of disconnections attributable to low-income households, the
avoided costs are insufficient to cover the costs of the program.
Review of Docket No. 5308
Interim Report and P for D
Any funding source for energy assistance programs should have the following

characteristics:
1.
It should generate sufficient revenue;
2.
It should adjust to changing prices for energy and economic
conditions;
3.
It should not penalize the lowest income;
4.
It should not promote non-cost based fuel switching, and
5.
It should not promote increased energy consumption.
Review of Docket No. 5308
PSB Closing Order
Major steps already taken:
1.
Creation of a broad-based funding mechanism and program
enhancement for the statewide low-income weatherization
program;
2.
Initiation of a comprehensive energy efficiency program for lowincome households, targeted to their specific needs;
3.
Revision to the Board’s Rules regarding utility deposits and
disconnects to better reflect the needs of low-income households;
4.
Continued support for Low-Income Home Energy Assistance
Program (LIHEAP), the Emergency Fuel Assistance Program, etc.
Review of Docket No. 5308
PSB Closing Order
Recommended additional steps:
5.
Pilot programs for bill assistance, lifeline rates and other utility initiatives,
where consistent with utility ratemaking principles;
6.
Creation of a low-cost, flat rate Residential Service Block of electric power
for the initial block of electric use by all residential customers.
Review of Docket No. 5308
PSB Closing Order
Proposed policies and programs should be evaluated using the
following general criteria:
1.
utility rate design should be based on the cost-based price signals in
order to promote the efficient use of natural resources;
2.
Financial support to meet the energy needs of low-income
Vermonters should be provided through broad-based collection
mechanisms, such as income and consumption taxes; here, as in
other areas,1 cross-subsidies among classes of ratepayers through
utility rates should be avoided.
In recent years there have been many proposals to assist various classes of customers through cross-subsidies,
including existing businesses, farms, schools, public facilities and residential customers generally. Under
Vermont’s well-established policy favoring cost-based utility rates, the Board has opposed these measures when
they impose additional costs on other customer classes. Low-income Vermonters benefit greatly from this
general principle and would not necessarily benefit from its abandonment.
1
Review of Docket No. 5308
PSB Closing Order
Proposed policies and programs should be evaluated using the following general criteria:
(continued)
3.
Programs that provide energy needs assistance to low-income households
should not be limited to regulated fuels alone, but should be available to
support the needs of those households with respect to non-regulated fuels
as well. Assistance to low-income households should also be broadspectrum, addressing the weatherization, lighting, heating systems, hot
water, appliance efficiency and financial management needs of those
households.
4.
Programs should be sensitive to efficient use objectives by
avoiding disincentives to conserve.
Review of Docket No. 5308
PSB Closing Order
PSB Order

We conclude that residential ratepayers, generally, and low-income ratepayers,
in particular, would benefit from a moderately-sized, low-cost Residential
Service Block, providing an initial block of electricity to residential customers
within each utility service territory.

We have considered carefully the question of whether the state should adopt
either a PIP or a Lifeline Credit program or some other means of improving the
affordability of electricity for residential customers.
Review of Docket No. 5308
PSB Closing Order
PSB Order

(continued)
A PIP program helps customers pay for a customers last units of energy
consumed, while a Lifeline program helps pay for the first units consumed.

We do not find sufficient evidence in the record to support creation of a
statewide PIP program at this time. The vast majority of low-income households
do not rely on regulated fuels for their primary heating source; thus, a
meaningful PIP program in Vermont would require major regulatory changes
and, potentially, significant administrative costs and could promote inefficient
fuel choices and consumption patterns.
New Hampshire Low-Income History
February 28, 1997

As part of the statewide electric utility restructuring plan, the Commission
authorized the establishment of a low-income assistance program to be funded
by a systems benefit charge.
August 28, 1998

Low Income Working Group recommended implementation for a fixed credit
payment plan based on a low-income customer’s historic energy usage and
annual income. The program would also have an arrearage forgiveness
component.

During hearings, the issue of the complexity and administrative cost to
implement and continue this type of program was raised. The Commission
decided to forge ahead.
New Hampshire Low-Income History
August 28, 1998 (continued)

The Low Income Working Group (which consisted of the states
utilities, Community Action Agencies and Commission staff) spent
the next couple of years developing policy and procedure manuals
that described the flow of data and funds from the many entities
required to administer the fixed credit program.
November 19, 2001

Fiscal Committee of the NH Legislature notifies the Commission that
“any statewide low income electric assistance program must be
reviewed and approved by the Committee prior to any action being
taken that advances the implementation of the program.
New Hampshire Low-Income History
December 24, 2001

NHPUC requests utilities to provide an estimate of implementation
and on-going administrative costs for both the original fixed credit
program and an alternative tiered discount program.
May 30, 2002
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NHPUC issues an order abandoning the fixed credit program with
arrearage components in favor of a tiered discount program with a
pre-program arrearage component.
October 1, 2002

Utilities implement tiered discount program.
New Hampshire Low-Income History
Subsequent Issues

Due to sharp electricity price increases, the funding via the Systems Benefit
Charge will likely be increased. The reserve built up as the program ramped up
has been depleted.

A waiting list of 4,000 customers exists.

The NHPUC is contemplating reducing the eligibility criteria from 180% of the
federal poverty level to 150%, which would remove approximately 3,44
customers for the program.

The Legislature held a special session to move funding from the energy
efficiency portion of the SBC to the low-income program for the winter 05/06.
July 27, 2006

NHPUC issues distinct policy alternatives, reflecting different possible
approaches to program design.