Overview of Low-Income Restructuring
Legislation and Implementation
Rhode Island
Last update: August 2009
Summary
Rhode Island’s Utility Restructuring Act of 1996 states that costs for low-income assistance and weatherization programs "shall be included in the distribution rates charged to all other customers" and using the 2.3 mil per kWh charge specified in the bill, the Public Utility Commission set up a demand-side management (DSM) program in 1997 to include 1) residential customers, 2) large commercial and industrial customers, 3) small commercial and industrial customers, and 4) renewable energy projects.
In November 2008, National Grid (NGrid) filed a Settlement of Parties that outlines its plan for energy efficiency programs for 2009. The Commission reviewed the design and implementation of NGrid’s proposed plan and approved the Settlement with a budget of $32.4 million for electric DSM programs. The budget is an increase of over $11 million from 2008’s budget and includes $2.4 million for residential low-income programs and $7.2 million for all-residential programs.
In the Settlement, NGrid agrees to continue eight electric DSM programs funded through a 3.2 mils per kWh charge, an increase from the previously set 2.3 mils per kWh, and five gas DSM programs funded through a $0.15 per decatherm charge.
Approved gas funding for 2009 is set at $7.6 million—$1.4 million for residential low-income programs and $2.2 million for non low-income residential programs.
The Single Family Low Income Services is the only program exclusively for electric and gas low-income households. LIHEAP-eligible customers living in 1-4 unit buildings are eligible for ENERGY STAR refrigerators and lighting. Heating system replacement, safety inspections, weatherization measures and CO2 detectors are available through this program if DOE funds are not available. The program, administered by the Rhode Island State Energy Office and local community action agencies, has a projected budget of $2.6 million for 2009 and expects to serve 1,439 households.
Another energy efficiency program, EnergyWise, was expanded to include all residential customers in 2001. The program offers incentives for gas and electric customers to conduct efficiency improvements to single and multi-family residences. The proposed 2009 budget is about $3.05 million for electric measures and $1.03 million for gas measures.
EnergyWise also provides services to Public Housing Authority properties and other low-income multi-family buildings. Co-payments are waived on all measures except refrigerators for state and federally-funded buildings and facilities where at least 50 percent of the tenants are low income. EnergyWise expects to provide services to 1,097 low-income participants in 2009 with expenditures of $725,000.
All residents can participate in the ENERGY STAR Homes program. Rhode Island Housing encourages developers to build to ENERGY STAR Home standards and about 114 low-income homes (30 percent) are completed each year with a projected budget of $285,000 for 2009.
Funds collected through the ratepayer charge also supplement the State Energy Office's weatherization program that assists about 1,000 low-income households each year with energy audits, appliance and furnace replacement, window repair, energy efficient lighting, water saving, air-sealing and insulation measures and health and safety education.
The restructuring law preserved special rates for NGrid’s low-income customers and for 2009, the Commission approved a per kWh credit of 1.306 cents, applicable to the first 450 kWhs used each month, for an expected 32,000 households. To qualify for the discount, a customer must be the head of household and receive Social Security, LIHEAP, Medicaid or other supplemental assistance.
On June 29, 2006, Rhode Island Governor Donald L. Carcieri signed The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 that was expected to start providing energy bill relief to low-income households in FY 2008. The bill was the culmination of several years of effort by advocacy groups to get a low-income energy assistance program.
The Act established the Affordable Energy Fund through a gross receipts tax on both electric and gas utilities and a sales tax on heating oil. Funding was projected to total approximately $15 million per year, with revenues from the 2 percent gross receipts tax providing about $14 million, and about $1 million coming from the heating oil tax.
Starting in November 2007, National Grid low-income customers were to receive a 50 percent discount on natural gas distribution rates and low-income customers of Block Island Power Company and Pascoag Utility District were to receive a 50 percent reduction on electric charges for usage up to 500 kWh per month.
However, due to budget constraints, the Rhode Island General Assembly eliminated all funding for the Energy Affordability Fund for FY 2008 and the FY 2009 state budget repealed the Act.
A debt forgiveness plan that started in July 2007 is still in effect. LIHEAP-eligible customers (125 percent of federal poverty level) of the three utilities will have 37.5 percent of their current unpaid electric and gas bill balance forgiven at the end of 3 years if the customer initially pays 25 percent of the unpaid balance and pays 1/36th of one-half of the remaining balance per month for 36 months. The customer must keep current with payments for current usage. The arrearage forgiveness plans are expected to be funded by $1 million from the Affordable Energy Fund in 2010.
For more information:
PUC Order No. 19179, approves continuation of demand side management programs, January 1, 2008
Summary of the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006
Rhode Island Energy Affordability Fund Usage, strategic plan, March 1, 2007
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Page Last Updated: September 24, 2009
