Energy & Environment

Regulators consider requiring discounts for low-income electric ratepayers 

public utility commission members
From left, Vermont Public Utility Commissioners Margaret Cheney, Anthony Roisman, and Sarah Hofmann. Photo by Mike Dougherty/VTDigger

The state’s utility regulator is looking into whether Vermont’s electric companies should have to provide rate discounts for low-income customers. 

The Public Utility Commission formal inquiry launched earlier this month comes in the midst of multiple utilities seeking approval for rate increases and a widespread push for more electric vehicles. 

“In general, the plight of low-income people, and moderate-income people for that matter, as electric rates continue to go up is something of concern to us,” said Anthony Roisman, chair of the PUC. 

In their order opening the investigation, the commissioners also say that “more and more Vermonters” will need to switch from fossil fuel-powered cars and heating units to devices powered by renewable electricity to meet the state’s climate goals

Although the state is supposed to have reduced emissions a quarter below 1990 levels by 2012, emissions are 13% higher than that. Transportation accounts for over 44% of those emissions.

“While these changes would save many Vermonters money on their overall energy bills, they could significantly increase their electric bill,” write the commissioners. 

Vermont’s largest electric utility, Green Mountain Power, has had lower rates for customers who make at or below 150% of the federal poverty level since 2012. GMP’s Energy Assistance Program, started by the PUC after an AARP petition, is funded through a dollar charge on residential customer bills and a staggered charge for small and large businesses. 

Eligible Vermonters can apply through the state Department for Children and Families to receive a 25% discount and possible forgiveness on past due bills. As of last fall, more than 10,000 customers had enrolled in the program. 

In 2018, GMP filed to return a portion of their energy assistance fund to customers because participation had “lagged behind what was originally expected,” according to a PUC order approving the refund. The PUC allowed the utility to do a one-time rebate of $2.43 million to ratepayers in 2018 and hire a consultant to review the program. 

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Consultant GDS Associates said in a report this past November that 25%-30% of eligible GMP customers have signed up to receive lower rates — in line with participation in similar programs around the country. The consultant notes that programs with higher participation rates typically have larger discounts and require that participants are part of other social service programs. 

“One of the things we’re going to be looking at is ‘what is it that is keeping people from taking advantage of a program that is designed to reduce their electric bill?’” Roisman said. He added that this review could include everything from program advertising to including incentives for efficient electricity use. 

When asked whether GMP was making any changes to its energy assistance program after the consultant report came out, Kristin Kelly, utility spokesperson, said that would be considered as part of the PUC investigation.

“We’re enthusiastic about the PUC looking into it and we’re looking forward to working collaboratively to enhance” the program, she said.

One challenge in universally requiring a bill assistance program is that some smaller utilities have a relatively high number of low-income ratepayers, said Roisman. “So it’s not quite so easy for them as, say, it would be for a GMP to put a charge on” customer bills, he added. 

Washington Electric Co-op filed for a 5.95% rate increase last summer. The utility also proposed lowering its per kilowatt hour rate while increasing its fixed customer charge to provide it with more financial stability and to encourage more members to “go electric.” 

The commission, noting that this proposed change could negatively affect customers who are both low-income and don’t use much electricity, required the utility to phase in the customer charge increase. The PUC also required the co-op to work with the Department of Public Service to come up with a bill assistance program. 

Patty Richards, general manager of WEC, said that the utility would “love to offer something” to reduce rates for its low-income members.

“But the reality is, that’s going to come from other consumers,” she added. 

Richards added that she’s excited for the PUC to open an investigation for all the utilities to take part in “because if we can all put our heads together to come up with something that’s fair and consistent across the state, that just makes it easier for everybody.”

WEC is not the only Vermont electric utility that has sought rate increases in the past year. The Hyde Park Electric Department filed for an almost 16% rate increase last fall. And last summer, the PUC approved a 2.72% rate increase for Green Mountain Power. 

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Elizabeth Gribkoff

About Elizabeth

Elizabeth Gribkoff is VTDigger's energy and environment reporter. She graduated from UVM's Environmental Studies program in 2013, receiving departmental honors for her thesis on women's farming networks in Chile and Vermont. Since graduating, Elizabeth has worked in conservation and sustainable agriculture. Most recently, she was a newsroom and reporting intern with VTDigger.

Email: [email protected]

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Scott Beck

Vermont should formalize its broad effort(s) to chase people (especially young families with high electric bills) out of the State. EGTHO, Everyone Get The Hell Out.

SHELDON Katz

So because of state “climate policy” rates are rising, making it less affordable for some Vermonters, and the solution is to subsidize those people by raising rates for other Vermonters, making it less affordable for them. This is insanity, especially since global warming /climate change is a farce. And if the government is going to subsidize, it must do so by taxing with a bill in legislature, not with “charges” on electric bills.

Tom Evslin

what about just eliminating the 8% “energy efficiency charge” from the bills of Vermonters who already qualify for the one of the state’s income assistance programs.? Adding a charge to everyone’s electric bill to reduce rates for low-income people is a hidden regressive tax on those just above the qualification line.

Electricity in Vermont would be much less expensive if the state had not mandated that utilities buy above market-rate generation from “renewable sources” (rather than simply buying cheaper carbon-free electricity from Hydro Quebec) and fund programs like incentives to buy electric cars and cold-climate heat pumps which do little if anything on a lifecycle basis to reduce emissions and if there were no “efficiency charge” on electric bills.

I’m afraid that the laudable goal of shielding very lowincome people from these high rates is part of a political calculus to make less voters sensitive to more larding up of electric bills.

Jeff Kocsis

So the plight of poor people will continue when the backs of the middle class give out having to carry this heavy financial burden. GMP already surcharges me for using more electricity than they approve of.

Arthur Hendrickson

In regards to Patty Richards of WEC saying, “But the reality is, that’s going to come from other consumers”. There is another solution that would not cause this shift and that is to take the energy efficiency fee off the bills of those over 65 years old and those of low income. The energy efficiency fee for a year totals as much as one’s lowest month’s electrical bill a year. Doing this would amount to giving older folks and low income Vermonters one month of free electricity a year. In the ever increasing use of electricity Efficiency Vermont gets more and more money every year. EV now has a budget over $61,000,000 a year.

Jeff Comstock

At its core, this is just another subsidy program that eliminates the link between responsibility for our (personal) actions and the consequences of those actions. Vermont’s energy policy wants people to use more electricity. But that’s OK, because if this action costs too much, someone else will pay your share of this decision. Not unlike the state education funding formula, for example.

Tim White

If one class of customers is afforded a discount, and the electric utilities have to make a certain amount of money, that means all of the other customers will be forced to pay more. That is the hard, simple arithmetic, and it cannot be different than that. Are there ways that that State can make it less expensive for utilities to operate? I’ll bet there are. Please investigate.

I have tremendous empathy for those that cannot pay their electric bill. I feel especially inclined to help out the elderly, the infirm, the injured or disabled. At the same time, I am certainly not interested in subsidizing a perfectly capable individual who does not work.

These are the pressures. I would like to see those that *need* the help get it, while those that merely *want* the help because it’s easier than working are left behind. This is, in effect, another tax that takes money from some and distributes it to others. It is perhaps necessary, but let’s exhaust other possibilities first.

rosemarie jackowski

“When Green Mountain Power CEO Mary Powell steps down at the end of the year, she’ll qualify for a $2.1 million dollar special retirement benefit.

Six months after she leaves GMP, Powell will get about $700,000 of this supplemental retirement plan; the rest will be paid out over six years, according to the company. That’s in addition to an annual $89,000 GMP pension, and her 401k retirement plan which the company contributed $14,800 to last year.

Supplemental retirement plans are common in the corporate world, but they are no longer offered to top executives at GMP, said spokeswoman Kristin Kelly.

Powell will also earn about $1.4 million this year in salary and incentives. Kelly said that compensation is in the lower range of what peer utility companies pay their CEOs….”

Tom Koch

Sure. Just what we need—more income shifting.

Jan van Eck

A more creative way to meet “climate goals” of fuels reduction, and to assist the poorer Vermonters, would be to create a financing program for folks to buy electric bicycles. The bikes that are fast enough, and have enough range, to be usable to get to and from work are expensive – figure $6,000. If the utility had a finance program, then that bike costs the user only $15 a week – paid for by tacking it onto the electric bill. That fellow now does not have to pay for an auto and its gasoline costs, leaving a large chunk of coin in his pocket.

With this scenario, the utility is not really using its capital reserves. The funds are raised by sale of commercial paper. The sales contracts for the bicycles can themselves be re-sold to third-party funders. The utility in effect acts as a capital-distribution locus, writing the loans and collecting the payments.

Then again, the State would have to spend some money on bike paths. But those are still a lot cheaper than roads.

Martin Dole

How about a hand up instead of hand out. Case by case why their is an issue and see how to help out. Turn off your lights. Energy Efficient VT needs to stand by more products. It has been a joke each time I have upgraded that doe not qualify. I have no issues with my electric bill as I am vigilant as to what might cause a power bill increase.

Martin Dole

I love the Ash bore fee added to the bills! I hope this was brought to the board before tacking onto the bill!

William Farr

Being a WEC customer & on the lower end of the income scale in either case & consistently month after month use less than 200 kwh per billing cycle, my bills have doubled in the last 20 years with no apparent end in sight! The hubris on display here with the constant rate increases & the ” big push ” to go ” All Electric ” is a pipe dream on WEC’s part. The ” Green Agenda ” they are pushing is for me to get completely get off fossil fuels & go with electric heat, solar hot water heaters, all electric vehicles & on & on it goes…
Time to throw some more wood into the wood stove, before the propane fired furnace kicks in. This is my carbon foot print contribution to the state of Vermont…
These people need a serious reality check on what the average rural person in VT faces with respect to usable income & these outlandish NON affordable go green initiatives… :~(

Trevor R. Lewis

This is my personal opinion, unconnected with job or other affiliations. I see this as a noble sounding but badly-thought-through idea. For the wealthy, utility costs aren’t a worry, at all. For working people & the middle class [which is shrinking especially severely in VT] utility costs are a worry. This could take many who struggle and shift more costs onto them, with strong potential for an effect like the “benefits cliff” applicable to other assistance programs-at some point it is economically rational for some to stay (or shift down to) just under cutoff points for eligibility -because if they go above eligibility caps, their change in actual expenses far outstrips their additional income. There are a lot of reasons why we don’t need one more policy with that effect. I also question if the PUC, as an administrative body with only specific powers defined in statutes, has statutory authority to dive this-fully-headlong into social welfare policy-about which it knows little.

Martin Dole

Okay really. No break for the customers who pay on time each month. Added to bill ash borer fee with out any advanced warning. I would really like to know why! Each person pay a set amount each month maybe ahead or behind this way an equal bill each month!

 

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