State PBF/USF History, Legislation, Implementation
District of Columbia
Last updated: March 2013
The Residential Aid Discount and (RAD) and Residential Essential Service (RES) discount have been applied to income-eligible customer accounts since the early to mid 1980s.
Pepco RAD customers receive a 63 percent discount on the first 400 kWhs in the summer months (June - October) and a 32 percent discount on the first 400 kWhs in the winter months (November - May) for a total savings of $102 per year. Eligible all-electric customers receive a 51 percent discount on the first 700 kilowatt-hours used in the winter months and a 38 percent discount on the first 700 kilowatt-hours used in the summer months.
As of October 1, 2012, a surcharge of 0.515 mills per kWh on Pepco customer bills funds the RAD at about $5.75 million per year. About 17,000 customers that are eligible for LIHEAP receive the discounts.
The RES discount rate is available from November through April for qualified Washington Gas customers. Established in 1986, the discount is based on household size and income level and ranges from $142 to $189 per year. In 2012, during the winter months over 10,000 customers received RES discounts.
On October 22, 2008, the "Clean and Affordable Energy Act of 2008" became effective. This legislation established a Sustainable Energy Trust Fund (SETF) and an Energy Assistance Trust Fund (EATF).
The EATF is funded by an assessment on natural gas and electric sales amounting to $.006 per therm for gas and $0.0000607/kWh from electric sales and is expected to collect $2.3 million annually for existing low-income programs. The assessment is applied to the sale of every kilowatt hour and therm in the District, except sales to residents participating RAD and RES programs.
The EATF provides continued funding for the following programs:
- LIHEAP Expansion and Energy Education is an addition to the current LIHEAP program and includes bill payment assistance and educates residents about other energy efficiency programs. Households that would otherwise not be served as a result of limited LIHEAP funding are granted benefits through this program. For FY 2012, $1.6 million provided services to 22,665 households.
- RES Expansion and Awareness Program is a bill assistance program for gas customers with the goal of increasing RES participation by 30 percent. The program had a $461,270 budget for FY 2012 and provided services to 4,762 households.
The Sustainable Energy Trust Fund (SETF) funds existing energy efficiency programs and a private company known as the Sustainable Energy Utility (SEU). The DC SEU is contracted by the Department of the Environment (DDOE), the LIHEAP grantee, and is required to "reduce the District's energy consumption and the growth of the District's peak electricity demand; increase the District's renewable energy generating capacity and the number of green-collar jobs in D.C.; and improve the energy efficiency of the District's low-income housing." An Advisory Board provides oversight of the SETF and SEU.
The SETF receives its revenue from a monthly surcharge assessed on Pepco and Washington Gas ratepayers. The surcharge for natural gas customers was assessed at $0.012 per therm in 2010 that increases to $0.014 in 2012 and each subsequent year. The surcharge for electric customers was assessed at $0.0013 per kWh in FY 2010 and increases to $0.0015 in FY 2011 and each year after. This fund amounted to about $18.6 million in 2012.
The DC SEU provided services to low-income multifamily residential buildings with an annual cost of $2.1 million in 2012. Programs included:
- Comprehensive Low-Income Multifamily Initiative — five rehabilitation projects involving 348 apartments provided air-sealing and insulation, improved windows and upgrades to mechanical and lighting systems.
- Low-Income Multifamily Direct Product Installation — 1,016 low-income households received energy-saving lighting and hot water products.
Other programs offered through the DC SEU in 2012 for low-income households included:
- DC Home Performance for Low-Income Homeowners — 80 single-family home owners seeking home energy improvements qualified for forgivable loans.
- Food Banks distributed more than 42,500 energy-efficient light bulbs clients.
The District's "Retail Electric Competition and Consumer Protection Act of 1999" became effective on May 26, 2000. Since then, after approval of the "Retail and Consumer Protection Act," low-income electric customers have benefited from universal service, energy efficiency and renewable resources programs. Programs were established by Commission-issued Order No. 11876 on December 29, 2000 and funded through the Reliable Energy Trust Fund (RETF), a public benefit fund financed by a non-bypassable surcharge on residential Potomac Electric Power Company (Pepco) bills.
Low-income natural gas customers also have benefited from energy efficiency and rate assistance programs that were approved and funded through the Omnibus Utility Emergency Amendment Act of 2005 that established a Natural Gas Trust Fund (NGTF), a non-bypassable charge on natural gas residential customer bills.
The Sustainable Energy Trust Fund (SETF) and the Energy Assistance Trust Fund (EATF) that were established by the Clean and Affordable Energy Act of 2008 replaced the RETF and NGTF that funded existing energy efficiency programs administered by the DDOE.
Since 2005, under a settlement with the Commission, Pepco has been the Standard Offer Service (SOS) provider to customers who have not chosen an alternative supplier. Each June supply rates are adjusted to reflect the cost of power that Pepco buys on behalf of its customers.
Clean and Affordable Energy Act of 2007 amends the Retail Electric Competition and Consumer Protection Act of 1999
More information about retail electric restructuring and customer choice is found on the District's Public Service Commission website.
Related PSC documents are available at the website listed above, or in the E-docket Section of the PSC website under Formal Case (FC) 945.