PUC redesigns, expands electricity assistance program

The New Hampshire Public Utilities Commission recently redesigned the electric assistance program, originally introduced in New Hampshire in 2002 to provide financial assistance to low-income electric customers as part of electric restructuring.

Paid for through the system benefits charge (SBC) that appears on all electric bills, the new EAP, as it is often called, took effect on Oct. 1. The new program, with a different benefit determination structure, is expected to provide benefits to about 30,000 eligible New Hampshire households. Under the old program, about half that number of customers received benefits.

The discounts range from 5 percent to 70 percent, depending on the customer’s gross household income and household size. The program applies to customers of the state’s four regulated electric distribution companies — National Grid, the New Hampshire Electric Cooperative, Public Service Company of New Hampshire and Unitil – but not the five municipally owned electric companies.

Customers apply for the EAP through their local community action agency. Customers with household incomes at or below 185 percent of the federal poverty guidelines are eligible to participate in the EAP. The EAP discount helps make bills more affordable by attempting to bring the average bill down to approximately 4 to 4.5 percent of household income. It also helps customers avoid the risk of having their electric service shut off for non-payment.

Emergency legislation

The system benefits charge on residential and commercial and industrial electric bills is $0.003, or 3 mils, for each kilowatt-hour of electricity used. Of the $0.003 collected, $0.0012, or 40 percent, goes to the EAP; the other $0.0018, or 60 percent, is used for energy-efficiency programs.

Under current law, the portion that goes to lower-income assistance could go as high as 1.5 mils, though the total SBC can not go higher than 3 mils. The PUC decided not to increase the 1.2 mils for EAP, partly because New Hampshire ranks highest in funding low-income rate assistance compared to other New England states.

The system benefits charge raises approximately $13.7 million a year for the EAP. On average, a typical residential customer contributes a total of $23 annually to the charge. Large commercial customers contribute on average $3,873 to the charge, and industrial customers contribute on average $34,971.

The target of serving 30,000 customers through the program was in fact included in emergency legislation passed just before last winter began. With the changes in the EAP and the doubling of eligible benefits to individual electric customers as of Oct. 1, benefits will on average not be as large as under the prior program, though some customers’ benefits may go up, some may go down and some may stay the same.

Created by Senate Bill 389 in the 2006 session, a legislative committee is studying the system benefits charge, including both the EAP and the energy-efficiency program, though its focus has been more on energy efficiency.

The committee’s job includes conducting a critical evaluation of each type of program in order to determine which programs make the best use of SBC funds and which programs should serve as models for future programs. The 12-member committee, which also must recommend persons or entities that the committee determines are best suited to administer SBC funds, must report its findings by Nov. 1, 2006.

The committee’s energy-efficiency focus may be due to the fact that there was a low-income electric review committee created in 2005 that made several recommendations to the Legislature, none of which has yet been adopted.

Instead, the Legislature has, at least to date, left it to the PUC to make changes to the low-income program. The 2005 bill establishing this committee also appropriated $10 million for fuel assistance just prior to last winter and transferred some money from energy-efficiency programs to the EAP in anticipation of a cold winter.

Doug Patch, a former chairman of the state Public Utilities Commission, is an attorney with the Concord law firm of Orr & Reno.