A new discount for low-income electric customers was approved on Wednesday, in a decision the state’s top utility regulator called “momentous” for the hope that it will help Connecticut’s poorer customers afford their electric bills, and lower rates for other customers as a result.
The Public Utilities Regulatory Authority unanimously approved a two-tiered discount rate that will offer a 10 percent discount on the monthly electric bills of households earning less than 60 percent of the state median income [$76,465 for a family of four], and a 50 percent discount for households earning up to 160 percent of the federal poverty guideline [$44,400 for a family of four].
PURA ordered Eversource and United Illuminating to start offering the discount no later than Jan. 1, 2024. Customers can begin enrolling for the discount on Aug. 1, 2023.
The utilities will automatically enroll “hardship” customers and customers receiving aid from the Connecticut Energy Assistance Program for the 10 percent discount. To qualify for the 50 percent discount, customers who may be eligible need to contact their electric utility or visit their local Community Action Agency to enroll.
“I really think this is a momentous decision,” PURA Chair Marissa Gillett said, thanking PURA staff for two years of work to reach a “comprehensive” decision she said would help make bills more affordable for poorer customers, and reduce the uncollectible bills that raise rates for all customers.
“We do have the unknown, quite frankly, of what’s going to [come in the future],” PURA Commissioner Jack Betkoski III said. “Our prices are still skyrocketing, and I think this is a step towards assisting those individuals who are having difficulty putting food on the table.”
PURA’s investigation into forming a low-income discount was spurred by the “Take Back Our Grid Act” that state lawmakers passed in an attempt to strengthen accountability of the two major electric utilities, Eversource and United Illuminating, after Tropical Storm Isaias in 2020.
Below Budget Payment program “incompatible” with discount rate
Despite objections from advocates for low-income customers, PURA ordered the utilities to end a program called Below Budget Payment ahead of the 2023-2024 heating season. That program caps the monthly payments of about 5,700 customers who have electric heat and receive SSI at $50 a month.
The advocates argued that, even with the 50 percent discount, those customers were likely to end up with bills higher than $50
PURA’s decision said that a low-income rate, or any other affordability program, can’t address “all societal challenges that contribute to inequality and poverty,” but it does attempt to help poorer customers avoid piling up unpaid electric bills.
“Put more simply, the [low-income discount rate] tiers are designed to drive the deepest discount for the most number of eligible customers while also [reducing the amount of uncollectible bills],” PURA said.
Gillett said that she believes one of the most misunderstood facets of electric rates is that the utilities pass on the costs of uncollectible bills on to all customers through higher rates. The goal of the discount rate is to help low-income customers afford their bills, but also to reduce the amount of uncollectible bills that everyone else is paying for, she said.
“[Reducing uncollectible bills] should put a downward pressure on bills for all customers,” Gillett said.
The Below Budget Payment program doesn’t reduce uncollectible bills, PURA said in its decision. While customers who make their $50 a month payments under the program can’t have their services shut off, they still build up arrearages if their monthly bill is higher than the payments they are making, PURA said.
Because it doesn’t lower arrearages, the below budget program isn’t compatible with the low-income rate, PURA found. But customers will still be able to access other assistance programs in addition to the discount rate, like state assistance, Operation Fuel, or the Matching Payment Plan – where Eversource and United Illuminating pay a dollar on a customer’s overdue balance for every dollar they pay toward their bill, PURA said.
But PURA said that if the low-income discount and existing assistance programs aren’t enough to make bills affordable for a “subset” of poor customers, additional solutions may need to be examined, including: an additional discount tier for the lowest-income customers, or solutions to overcome the landlord-tenant split to weatherize apartments where low-income customers live.