2018 -- H 7900

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LC004949

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE HOME ENERGY RATE

AFFORDABILITY ACT

     Introduced By: Representatives Slater, Diaz, Handy, Blazejewski, and Maldonado

     Date Introduced: February 28, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 141.1

THE HOME ENERGY RATE AFFORDABILITY ACT

     42-141.1-1. Short title.

     This act shall be known and may be cited as "The Home Energy Rate Affordability Act."

     42-141.1-2. Legislative findings.

     (a) In recent years, the federal government has reduced home energy assistance to low-

income households.

     (b) Thousands of low-income Rhode Islanders lose access to heat or electricity every year

due to lack of energy affordability. In 2016 over eighteen thousand (18,000) households

throughout Rhode Island had their electricity service terminated, and over eight thousand (8,000)

households had their gas service terminated.

     (c) Previous efforts to help low-income payers manage their arrears, while helpful, fail to

address the burgeoning need for greater energy assistance.

     (d) Many other states have passed legislation to establish some form of rate-payer

program to address rising demand for energy assistance.

     (f) The general assembly hereby establishes the Rhode Island home energy rate

affordability act.

     42-141.1-3. Program creation.

     By December 31, 2018, or as soon as practicable thereafter, the office of energy

resources shall create a program to be known as the "home energy rate affordability program" for

the purpose of insuring that utility rates are affordable for low-income households.

     42-141.1-4. Definitions.

      For the purposes of this chapter, the following definitions apply:

     (1) "Commercial and industrial customers" means and includes all establishments

engaged in commercial activity, either for-profit or nonprofit, including, but not limited to,

transportation, manufacturing, mining, construction, agriculture, fishing, forestry, school

dormitories, hospitals, and military barracks and other non-residential customers.

     (2) "Commission" means the public utilities commission.

     (3) "Energy office" means the office of energy resources.

     (4) "Home energy" means retail electric and natural gas service provided for end-use

consumption by residential consumers.

     (5) "Home energy burden" means a consumer’s home energy bill divided by the

consumer’s household income, including any grant of LIHEAP assistance.

     (6) "Industrial customer" means and includes manufacturing, mining, construction,

agricultural, fishing and forestry industries.

     (7) "LIHEAP" means the federal Low Income Household Energy Assistance Program.

     (8) "Participating agency" means and includes any community action program or other

community-based agency which determines eligibility for LIHEAP benefits.

     (9) "Residential customer" means and includes all private residences, whether occupied

or vacant, owned or rented, including single-family homes, multi-family housing units and

mobile homes, but not including school dormitories, hospitals and military barracks

     42-141.1-5. Eligibility.

     Customers with a household income at or below one hundred fifty percent (150%) of the

federal poverty level that are receiving assistance through LIHEAP shall be eligible for the rate

affordability program under this chapter.

     42-141.1-6. Program credits.

     (a) The energy office shall inform each utility and each trustee of a rate affordability

account under § 42-141.1-12 of the credit amount for which each eligible household is qualified,

and of the duration for which that credit must be provided from the "rate affordability account"

established pursuant to § 42-141.1-10(b), on a first-come, first-served basis, as long as funds are

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available. All funds in any rate affordability account established under § 42-141.1-10 shall be

fully expended annually, including accumulated interest.

     (b) The amount of credit shall be that amount necessary to reduce the household’s home

energy burden to an affordable percentage of income.

     (c) The affordable home energy burden for each eligible household that uses both gas and

electric service and each household that uses electric service for heating purposes shall be tiered

as follows:

     (1) Six percent (6%) of gross annual income: households earning zero to fifty percent (0-

50%) of the federal poverty level;

     (2) Seven percent (7%) of gross annual income: households earning fifty to one hundred

percent (50-100%) of the federal poverty level;

     (3) Eight percent (8%) of gross annual income: households earning one hundred percent

(100%) of the federal poverty level to maximum LIHEAP eligibility benefits amount.

     (d) If a household uses electricity only for non-heating purposes, the affordable home

energy burden for each eligible household shall be tiered as follows:

     (1) Two percent (2%) of gross annual income: households earning zero to fifty percent

(0-50%) of the federal poverty level;

     (2) Three percent (3%) of gross annual income: households earning fifty to one hundred

percent (50-100%) of the federal poverty level;

     (3) Four percent (4%) of gross annual income: households earning one hundred to one

hundred fifty percent (100-150%) of the federal poverty level.

     (e) The energy office may allocate credits as it deems appropriate for crisis intervention.

     (f) The energy office may also allocate credits to provide arrearage forgiveness when

needed to bring home energy burdens to an affordable level, as determined by the energy office.

     (g) Each utility shall seek reimbursement from the trustee of a rate affordability account

established pursuant to § 42-141.1-10(b) for any credits it provides for its low-income customers

under this chapter.

     42-141.1-7. Obligations of participants.

     Participating households shall agree to the following obligations in order participate in

this program:

     (1) The household shall report, within a time period prescribed by the energy office,

changes in income or financial condition that affect the household’s eligibility or need for energy

assistance to a responsible administrator in the energy office or in a participating agency;

     (2) Household participation in this program shall be terminated if the household fails to

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make three (3) or more consecutive monthly payments gas and/or electric bills, unless the

household has reported a change in income or financial status in accordance with subsection (1)

of this section and has been determined eligible on account of that change for additional

assistance or for emergency assistance. Upon termination from the program, all arrearages will

become due and payable, and the household, upon re-application, will be treated as a new

applicant.

     42-141.1-8. Arrearage.

     A household entering this program with existing arrearage shall be informed and

encouraged by the energy office or its agents to enroll in an arrearage management plan for which

they qualify.

     42-141.1-9. Usage limit.

     (a) The energy office shall establish maximum usage limits based on such factors as

household size, thermal integrity of the household dwelling unit, and average household energy

expenditure of a median income household.

     (b) Under no circumstances may a maximum usage limit be set lower than one hundred

fifty percent (150%) of the median RI household energy use.

     (c) Energy usage exceeding the limits shall be billed at the prevailing consumer rate.

     (d) Conservation may be rewarded with a reduction in the payment percentage required.

     42-141.1-10. Rates.

     (a) For the first three (3) years, utilities shall collect a non-bypassable monthly charge

from each gas and each electric account receiving energy not for resale, including low-income

households, in accordance with the following:

     (1) Electric service accounts:

     (i) One dollar and fifty-five cents ($1.55) for residential customers;

     (ii) One dollar and fifty-five cents ($1.55) for commercial and industrial service

customers whose average is less than ten kilowatts (10kw) of demand;

     (iii) Fourteen dollars and fifteen cents ($14.15) for commercial and industrial service

customers whose average use is between ten kilowatts (10kw) and two hundred kilowatts

(200kw); and

     (iv) Two hundred seventy-one dollars and seventy-five cents ($271.75) for commercial

and industrial service customers whose average usage is greater than two hundred kilowatts

(200kw).

     (2) Natural gas service accounts:

     (i) One dollar and fifty-five cents ($1.55) for residential customers;

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     (ii) One dollar and fifty-five cents ($1.55) for commercial and industrial service

customers whose average usage is less than five hundred thousand (500,000) cubic feet per year;

     (iii) Fourteen dollars and fifteen cents ($14.15) for commercial and industrial service

customers whose average use is between five hundred thousand (500,000) cubic feet and three

million, five hundred thousand (3,500,000) cubic feet per year; and

     (iv) Two hundred seventy-one dollars and seventy-five cents ($271.75) for commercial

and industrial service customers whose average usage is greater than three million, five hundred

thousand (3,500,000) cubic feet per year.

     (b) These charges shall be kept in trust in a separate "rate affordability account" which

shall be used for program expenditures under this chapter and shall be established and operated in

accordance with § 42-141.1-12.

     (a) After the third year of the program, the commission shall annually set a non-

bypassable monthly charge sufficient to fund the total program budget developed by the energy

office. When determining the charge, the commission shall not substantially deviate from the

customer class rate allocation proportion as set forth herein.

     42-141.1-11. Administration.

     The energy office shall administer the program, including informing utilities of

applicable credits, answering consumer inquiries, referring eligible customers for weatherization

assistance, and keeping appropriate records. The energy office may delegate to participating

agencies the responsibility for determining program eligibility and calculating the amount of

credit due to each eligible household.

     42-141.1-12. Rate affordability accounts.

     (a) Every utility shall place all charges collected under § 42-141.1-10 in a rate

affordability account, which shall be opened in the name of, and held by, an independent existing

nonprofit organization as trustee (hereinafter "rate affordability account trustee"), and which shall

be operated as a nonprofit program.

     (b) The rate affordability account trustee shall report to the energy office monthly the

total amount of funds available for low-income consumers for each utility, including accumulated

interest, minus any administrative costs incurred.

     (c) The rate affordability account may be used to pay annual administrative costs incurred

by the utility, the energy office, the rate affordability account trustee, and participating agencies,

as long as those costs do not exceed ten percent (10%) of the total annual amount allocated for

program credits for eligible households. The utility, the energy office, the rate affordability

account trustee, and participating agencies shall submit their bills for administrative costs

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annually to the energy office, which shall ensure that these bills do not together exceed this limit,

and shall then forward these bills to the rate affordability account trustee for payment.

     (d) Utility companies shall report annually to the public utilities commission including,

but not limited to, the amount of funds collected in the rate affordability account, the distribution

of those funds, the amount of funding allocated to administrative costs, and the projected amount

of funds to be collected and distributed in the following year.

     (e) The energy office shall annually evaluate the impact of the rate affordability act,

including, but not limited to, an assessment of the number of eligible low-income customers who

participated in the rate affordability program, the number of low-income customers who did not

participate in the rate affordability program, and any difference in payment history between these

two (2) groups of low-income utility customers.

     SECTION 2. This act shall take effect upon passage.

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LC004949

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE HOME ENERGY RATE

AFFORDABILITY ACT

***

     This act would create the Home Energy Rate Affordability Program to ensure that utility

rates are affordable for low-income households.

     This act would take effect upon passage.

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LC004949

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