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State PBF/USF History, Legislation, ImplementationDistrict of Columbia 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. On October 22, 2008, the "Clean and Affordable Energy Act of 2008" (CAEA) became effective. This law establishes a Sustainable Energy Trust Fund (SETF) and an Energy Assistance Trust Fund (EATF) that replace the RETF and NGTF and funds existing energy efficiency programs administered by the District Department of the Environment (DDOE) up to $6.5 million per year for FY 2009 — FY 2011. One-half of the funds remaining in the RETF and the NGTF were transferred to the SETF; the other half transferred to the EATF. As of November 2011, the SETF funds six energy efficiency programs with four of those designated for low income:
The Low-Income Appliance Replacement Program and the Energy Awareness Program were not funded for 2011. In 2010, the programs spent $1.1 million for refrigerator and air conditioner replacements. 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 is projected to amount to about $20 million a year. Like the RETF that it replaced, unused SETF funding will carry over to the following year. The EATF, another nonlapsing fund, ensures continued funding for programs that were funded by the RETF and NGTF. The EATF funds the following two programs:
The Residential Assistance Discount (RAD) Extension that provided additional funds to Pepco to increase the availability of existing RAD discounts was discontinued starting October 2010. During 2010, $1.1 million funded the RAD Extension discounts for 21,607 households. The EATF is funded by an assessment on natural gas and electric sales amounting to $.006 per therm and $.0004 per-kilowatt and is expected to collect $6.3 million annually. The assessment is applied to the sale of every kilowatt hour and therm in the District, except sales to residents participating in the RAD and RES programs operated by DDOE. The average charge on Pepco residential bills for the SETF and EATF was $1.51 per month in 2010. Commission Order No. 15986, dated September 20, 2010 establishes a surcharge of 0.503 mills per kWh on Pepco customer bills to fund the RAD at $5.75 million per year. The Order also states that eligibility requirements for RAD will be tied to the eligibility requirements of LIHEAP effective January 2011. 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. About 21,000 customers received approximately $6 million in RAD discounts in 2010. 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 2010, over 10,000 participants received RES discounts of about $1.8 million. The SETF surcharge also funds a private company known as the Utility (SEU). The SEU is contracted by DDOE 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. Even though all residential and commercial electricity customers have been able to choose an alternative electricity generation supplier since January 1, 2001, as of October 2011, one alternative supplier is accepting new customers and only 6 percent of the District's residential customers have signed with alternative suppliers. 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. The District's natural gas customers also have been able to choose an alternative supplier but as of November 2011, only 9 percent have done so. For more information Retail Electric Competition and Consumer Protection Act of 1999 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. Page last updated: May 2, 2012 |