Ohio Utility Restructuring Legislation

Legislation Cite and Date
SB 3 (7/99)

Low-Income Provisions
Ohio’s Percentage of Income Payment Plan (PIPP) has been restructured for the first time in its 26-year history. However, it is likely the new program won’t be in place until the winter of 2010-11.

In 1999, SB 3 established a Universal Service Fund (USF) to provide funding for the low-income customer assistance programs, to include the existing electric Percentage of Income Payment Plan (PIPP), low-income energy-efficiency programs, and a consumer education program. Prior to that the electric and gas PIPP were funded by utilities as a result of a 1989 regulatory order. The gas PIPP continues under utility administration.

Low-Income Rate Assistance
When the new program is implemented, low-income participants will pay a maximum of 6 percent of their incomes on their natural gas bills and 6 percent on their electric bills for a total of 12 percent, or 10 percent if they heat with electricity. PIPP customers must make a minimum payment of $10 per month.

Participants will also be offered a standard arrearage-crediting program. If they make their monthly PIPP payment on time, they will receive a bill credit that is the difference, if any, between their monthly PIPP payment and their bill. Furthermore, for each timely payment, they will receive a credit amounting to 1/24th of their historic arrearages.

Currently, PIPP customers with incomes up to 150 percent of federal poverty guidelines pay a percent of their monthly household incomes to the utility or utilities providing their primary and secondary heating service. PIPP plans vary, but the maximum PIPP payment is 15 percent of the household’s income. The amount of the bill not covered by a combination of the customer’s PIPP payment, the LIHEAP payment, and any other energy assistance the customer may receive, is recovered through the universal service rider.

Low-Income Conservation
The Electric Partnership Program began in March 2002 and is targeted to high consumption, high arrears PIPP households. Measures include in-home energy audits and installation of appropriate electric baseload and thermal energy efficiency measures, along with consumer education.

Annual Funding Electric PIPP (2008)
Rate Assistance: $133 million
Conservation: $7 million
Consumer Education: $6 million

Enrollment in the Electric PIPP ( FY 2008)
230,000

Annual Funding Gas PIPP (2006)
Rate Assistance: $85 million
Arrearage Forgiveness: $6.5 million

Enrollment in the Gas PIPP ( FY 2008)
211,000

Funding Mechanism
Electric—universal service rider, a charge assessed on retail electric distribution customers and all natural gas customers.

Gas—PIPP rider embedded in gas distribution charges, companies collect for costs as needed, rather than readjusting the rider annually.

Administration
Electric PIPP Rate assistance: Ohio Department of Development, Office of Community Services, the LIHEAP grantee

Electric Conservation: Ohio Department of Development, Office of Energy Efficiency, the WAP grantee

Gas PIPP: utilities

Pre-Restructuring Funding
Rate Assistance: NA as utilities administered program. (The gas PIPP totals about $50 million)

Conservation: $8 million yearly (mostly gas)

Reports / Evaluations

State Report: Ohio, from Ratepayer-Funded Low-Income Energy Programs: Performance and Possibilities, APPRISE and Fisher, Sheehan, and Colton, July 2007

Third Ohio Electric Partnership Program Impact Evaluation, Michael Blasnik, June 2006

Page Last Updated: September 24, 2009