Income

Proposed low-income electricity rate could increase costs for some of Connecticut’s poorest customers

Advocates for low-income electric customers say a proposed discount rate could end up costing some of the state’s poorest residents more on their electric bills.

The Public Utilities Regulatory Authority is proposing a reduced rate for low-income electric customers, but the proposal would also end the below-budget payment scheme, which caps monthly payments at $50 for about 5,700 of the poorest electric customers in the state.

PURA’s proposed rate would instead offer a 10% discount on monthly bills for customers earning less than 60% of the state’s median income (about $76,000 for a four-person household) and a 45% discount for poorer clients eligible for benefit programs including Medicaid, Supplemental Nutrition Assistance Program (SNAP), and Supplemental Security Income (SSI).

Bonnie Roswig, an attorney at the Center for Children’s Advocacy, said the concept of a low-income discount rate that aims to keep poor customers’ bills within an affordable range could solve some of the longstanding problems resulting from bills. energy sources in Connecticut. .

“If a bill is unaffordable given the reality of an individual’s household income, there will always be challenges related to low-income customers being unable to pay, terminating their service, and all the implications for health and the societal implications that come with that,” Roswig said.

The key is to come up with a fare that’s actually affordable for people, she said.

In its draft decision, PURA said the rebates were intended to reduce electricity bills to less than 6% of a customer’s household income — a threshold used in other state programs to define what what is an “affordable” energy bill.

But it’s unclear that a standard discount for all customers below a certain income threshold will reduce each bill below the threshold by 6%, given the wide range of incomes involved, Roswig said.

“That income range varies, and so do monthly bills, so the question becomes, are these two rate tiers really going to make monthly bills affordable?” Roswig said.

The issue is particularly acute for people on the under-budget payment plan — available to customers who have electric heat and receive SSI — whose bills are now capped at $50.

About 5,700 customers were enrolled in the program as of June, Roswig said, but PURA’s decision orders Eversource and United Illuminating to end before the 2023 heating season.

PURA’s Office of Education, Outreach and Enforcement said the program incentivizes clients receiving government assistance to deliberately miss payments so they can create a backlog and be placed in the program. paying below budget with a lower monthly bill.

Customers would have the same incentive to avoid subscribing to the new reduced low-income rate if they paid less under the below-budget payment scheme, the bureau said.

Eversource argued that it would be confusing for customers and difficult to implement the low-income rate if the below-budget payment program was still in place.

Because they are on SSI, these customers would qualify for the 45% discount, which sets a target bill of between $93 and $140 per month – or 4-6% of the income of someone earning 160% of the federal poverty guideline. [$42,400 for a four-person household].

That could double or nearly triple the monthly bill for someone on the Under Budget program, Roswig said. And how much the new discount rate helps other customers largely depends on how much energy they use, something lower-income renters might have less control over, she said.

Gannon Long, director of policy and public affairs for Operation Fuel, a nonprofit that provides heating assistance, said she’s also worried that ending the program under budget will leave those customers with bills. higher. She said she disagreed that customers would be incentivized to miss payments and put themselves at risk to qualify for the scheme.

“The idea that you’re putting the wrong incentives in place, I just don’t know how many people are going to say, ‘Oh, let me put myself at risk of being kicked out every month just so I can get this stuff. which I probably never heard of in the first place,” Long said.

The low-income discount rate was a key part of the Take Back Our Grid Act passed by state lawmakers in the wake of the damaging Tropical Storm Isaias in 2020, and PURA studied how to develop a new set of rates that will reduce the burden on electricity customers who cannot afford to pay their bills.

While there are assistance programs to help customers pay their arrears, the low-income rate is intended to help customers pay before they accumulate overdue bills, PURA said in its draft decision – leaving fewer people at risk of having their service shut down, and resulting in a lower amount of unpaid bills that other taxpayers have to cover.

But Long said it was unclear whether the low-income rate would actually help all low-income customers, especially those on fixed incomes.

“If your bill is $100 — which, depending on where you live, it’s probably more than that — you’re going to see an increase in your costs,” Long said. “And these are the most vulnerable and most vulnerable taxpayers we’re talking about, so we can’t assume that they can just absorb that, or that they get a lot more revenue, or that their other costs go down that much.” a lot.”

PURA is expected to issue a final decision later this month. The draft decision calls on Eversource and United Illuminating to set the new rates by Nov. 1, 2023. But Eversource said it would take 16 months after a final implementation decision — which would be around February 2024 — and United Illuminating said said it would take 11 months after bringing in a contractor to work on the project.