Access to energy services is a necessity of modern life. It is not a discretionary service that people can do without. The lack of heat in the winter or air conditioning in the summer puts people’s health at risk. Without electricity, people cannot read at night, use the computer, work from home, store food in refrigerators, cook or have hot water for bathing and cleaning. Children cannot do homework. The lack of energy access widens the gap between the haves and have nots and creates barriers for low-income families to succeed in attaining the American Dream. It constrains the quality of life every American should expect. To ensure every household has energy services, a focus on affordability is paramount, including better rate options, home-weatherization and other energy efficiency programs that can lower bills. Innovative programs such as community solar and bill assistance should be encouraged.
Better Rate Options – Ohio has the Percentage of Income Payment Plan (PIPP) under which customers at 150% of the Federal Poverty Guideline (FPG) can pay 6% of their monthly income towards gas service and 6% towards electric service. While this program is considered to be among the best in the country, the percentage amount of payment made should be reduced. In Illinois, PIPP customers pay 3% of their monthly household income for each service. The average energy burden for American households is around 2-3%, so requiring customers who have less money to pay 12% of their income creates quite a burden. Moreover, due to the number of struggling households, eligibility should be increased to 175% of the FPG. A conservation incentive should be incorporated into the program that provides for the savings resulting from reduced use to be shared between the low-income customer and all ratepayers.
Terminate Straight-Fixed Variable (SFV) Rates – The Public Utilities Commission of Ohio (PUCO) has allowed gas and electric companies to raise the fix charges that customers must pay irrespective of their usage. Reducing the volumetric rate and increasing the amount of the mandatory fixed charge on customer’s bills have resulted in increased bills for low use customers – often low-income customers, while providing a rate decrease for more affluent high-use customers. Not only does this rate harm low-income, low-use customers, but it also impacts the positive effects of energy efficiency by reducing the amount of savings customers can achieve on their bills. Rates should be redesigned to eliminate these high fixed charges that harm consumers.
Home Weatherization and Other Energy Efficiency Programs – The Federal Home Weatherization Assistance Program provides funding for the weatherization of homes for eligible customers at or below 200% of the FPG. These programs are administered by Community Action Agencies. The need far exceeds the available funds and efforts should be made to increase federal funding. Furthermore, when energy efficiency is coupled with Weatherization dollars, there are economies to be gained through increasing the amount of weatherization that can be done per household and the number of households that can be reached. This is another reason why the energy efficiency programs should be restored.
Community Solar – Community solar programs enable renters and low-income customers to take advantage of solar energy by subscribing to a solar farm and receiving a monthly discount on their bill due to the lower cost of solar. This provides an avenue for participation in solar that would otherwise not be available.
Bill Assistance Programs – Utilities can initiate programs like “round-up” in which customers can round-up their monthly bill and the amount donated each month is put into a fund to help customers facing disconnection to pay their bills. Another similar program is to create an optional program for customers with rooftop solar or other distributed generation to donate the value of any excess energy generated from their unit to a low-income bill assistance or weatherization fund.
Given that roughly 10% of households are disconnected from gas or electric service every year due to an inability to pay, Ohio should get creative and offer a panoply of solutions to help customers stay connected.
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