Friday, November 14, 2008

Low Income Central Hudson Customers to Receive $1.9 Million Winter Bill Credits

On November 13th, the PSC issued an order approving Central Hudson's proposal to use $1.9 million in unspent rate plan funds to ease energy burdens of the utility’s low-income customers who receive Home Energy Assistance Program (HEAP) benefits.

The funds originally were committed for Central Hudson's “Enhanced Powerful Opportunity Program,” (“EPOP”), which was intended to give low-income customers a monthly discount on their bill and an arrears forgiveness benefit of 1/24th of their arrears each month, provided the customers paid their current charges in full and on time. Central Hudson reported that the unspent funds accrued partly because many EPOP participants could not pay their monthly budget amount, and therefore they received no arrears forgiveness benefits.

Central Hudson asked the PSC to use the $1.9 million in unspent funds to credit low income HEAP customers’ bills with a one-time credit of either $200 or $300, but the company did not specify whether the credits would be applied to customers’ past arrears or to their current accounts. For example, a customer owing $800 might be paying $10 per month to reduce the arrears plus the bill for current charges.

PULP filed comments in the case in which we pointed out to the PSC:
The Company did not specifically denote exactly how the account credits will be applied. [I]t characterizes the proposed credits as ‘immediate, temporary assistance’ . . . ‘supplemental benefit’; ‘credit be applied to accounts’; ‘credit be applied to assist.’ and finally ‘assistance on their accounts and be in a better position to face this year’s winter heating bills.’ All of these statements sound laudable, but are consistent with application of a credit to reduce arrears from years ago. Nowhere does Central Hudson clarify whether the proposed credits will be used to pay down old arrears or to provide relief from this season’s heating charges. PULP urges that this be clarified.”
PULP also pointed to the EPOP program’s flawed design, which clashed with HEAP requirements for emergency payments. For example, last year, Central Hudson customers who remained in good standing in the EPOP program could not qualify for emergency HEAP benefits totaling up to $1,400. This is because emergency HEAP benefits are only available for “heat related emergencies,” defined as “having utility service terminated, or having utility service scheduled for termination.” To receive emergency HEAP benefits, Central Hudson customers struggling to pay their bills had no choice but to default on their monthly budget payment to the utility -- and thus they were ineligible for the EPOP program arrears forgiveness benefit.

Central Hudson filed a "clarification" letter which still dodged the issue of how it would apply the new bill credit -- to charges for current service, or to old arrears. The PSC Order stated,
PULP[] recommend[ed] that the account credit should be applied to current charges, and not to arrears, to provide the greatest benefit. . . . Therefore, we affirm that account credits will be applied in a manner that helps customers remain current on their account, thereby avoiding service termination and exclusion from the EPOP.
While the order could be clearer, it appears that the Commission expects the Central Hudson payments to be applied to reduce current charges for this winter's service.

This week's order did not mention a similar measure taken by the PSC in 2006 when it issued an order reallocating unspent funds from the "Powerful Opportunities Program" (the precursor of the "Enhanced Powerful Opportunities Program") to provide for one-time bill relief for Central Hudson's HEAP customers. These measures, while helpful and far better than nothing, are not a substitute for Commission policy to assure that all residential utility rates are designed to be affordable for low income consumers. See Testimony in National Grid Natural Gas Rate Case Urges Low Income Rates and Reform of Utility Termination Practices.

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