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State PBF/USF History, Legislation, ImplementationOregon Oregon's restructuring legislation provided for about $18 million in new funding for low-income energy assistance and weatherization programs. Signed into law in July 1999, SB 1149 established a $60 million Public Purpose Charge (PPC) of which about 12 percent, about $7.5 million yearly, is earmarked for low-income weatherization. The PPC is equal to three percent of the total revenues collected by participating electric utilities and funds "new cost-effective local energy conservation, new market transformation efforts, the above market costs of new renewable energy resources and new low-income weatherization." It will be collected through 2026 by the state's two investor-owned utilities — Portland General Electric (PGE) and PacifiCorp — which serve 80 percent of the state's electric customers. The measure also authorized collection of money for low-income electric rate assistance through a meters charge on residential and commercial/industrial customers of PGE and PacifiCorp. From late 2001 through 2007, the meters charge collected about $10 million annually, the amount was an attempt to bring the state's total bill assistance funding up to the level of LIHEAP funding in 1985, when Oregon received about $20 million for LIHEAP rate assistance. Through the passage of SB 461 by the Oregon Legislature in 2007, the amount collected through the meters charge was increased from $10 million annually to $15 million, effective January 1, 2008. The law also allows that amount to change each year in accordance with the percentage change in the number of residential customers and certain business electricity sales. The monthly meters charge currently is set at $0.50 per meter for residential customers and not more than $500 for commercial/industrial customers. In June 2011, the governor signed SB 863 that directs electric companies to collect $5 million more per year for low-income electric bill payment assistance if at least 2 of 4 economic conditions are met during the previous 12-month period. The conditions are:
These funds cannot be collected for more than 12 months after the initial findings unless additional conditions have been met and then, not more than 24 months. The PUC instructed utilities to collect an additional $5 million beginning October 5, 2011 and ending October 4, 2012 after the poverty rate exceeded 12 percent and unemployment exceeded 10 percent during the previous 12 months. The law stipulates that Oregon Housing and Community Services (OHCS), the LIHEAP and weatherization grantee, administer both low-income funding sources. OHCS distributes the funds through the community action agencies that operate LIHEAP and the WAP, but energy assistance is under a separate program called Oregon Energy Assistance. The law requires that priority assistance be directed to low-income electricity consumers of PGE and PacifiCorp in danger of having their electricity service disconnected. It also stipulates that bill payment and crisis assistance include programs "that effectively reduce service disconnections and related costs to retail electricity consumers and electric utilities." The funds must be expended solely for low-income electric bills in the service area of the electric company from which the funds are collected. Income eligibility for the electric assistance funds is the same as for LIHEAP — 60 percent of state median income. The program served 27,398 households in PY 2011 with an average benefit of $451 and a funding level of $14.5 million. An evaluation of the program was completed in January 2003. Additionally, legislation enacted in 2001 allows natural gas companies to collect funds through a meters charge for bill payment assistance; as a result, three gas utilities collect these funds. The largest utility, NW Natural, initially collected funds through a 25-cent surcharge on all residential customer bills for its Oregon Low-Income Gas Assistance Program (OLGA). In May 2006, this charge increased to 31 cents and then, in a November 2008 filing with the Public Utility Commission, was revised from a flat rate to a 0.33 percent charge applied to residential customer's total energy bill in. The 2008 filing also allows a separate charge of up to 0.25 percent that can be allocated either to OLGA or the Oregon Low-Income Energy Efficiency (OLIEE) program. OLGA received proceeds from both charges from October 2008 through October 2010. Starting October 1, 2010, the 0.25 percent charge was redirected to the OLIEE and at that time OLGA funds were increased by 0.25 percent. During PY 2011, NW Natural spent about $2 million for assistance payments to 6,383 households and provided energy efficiency measures amounting to almost $1.5 million to 339 income-eligible households. Oregon's two smaller natural gas companies, Cascade and Avista, have similar programs. The Avista Low-Income Rate Assistance Program is a ratepayer-funded program that collects around $230,000 per year, while Cascade spent $64,600 for energy assistance and about $200,000 for energy efficiency in PY 2011. Consumer-owned utilities (public utility districts and municipal utilities) can choose whether to participate in restructuring. If they do participate, they are also obligated to collect the three percent public purpose charge from their customers. While a section of the law requires consumer-owned utilities to have bill assistance programs, it has no other guidelines or specifications. However, it does override an existing Oregon law that prohibited utilities from establishing reduced rates or other bill payment assistance for low-income customers based on the rationale that these rates are discriminatory. Each of the state's 36 consumer-owned utilities provides assistance to their low-income customers: utility funded programs (using funds provided by ratepayers), voluntary contribution programs (using funds provided on a voluntary basis) and rate discount programs that are funded as a part of utility operations. Together these utilities provide around $3 million per year for their low-income programs. However, more than 60 percent of this total is accounted for by a single utility, the Eugene Water & Electric Board, which commits more than $2 million each year to its limited-income programs. Collection of the low-income portion of the PPC began on March 1, 2002. These monies are distributed through OHCS and, in addition to low-income housing programs, they fund two separate weatherization programs. One is for energy efficiency for low-income households and is administered through the community action network; the second is designed to reduce the energy usage and utility costs of lower income tenants in multi-family rentals. All expenditures must be for customers of PGE and PacifiCorp. According to a 2011 report on the PPC, during the period from January 2009 through December 2010, about $10.9 million from PGE and $6 million from PacifiCorp were allocated to OHCS for the two low-income weatherization programs. An additional $4.1 million from PGE and $1.5 million from PacifiCorp were committed for projects that had not been completed as of December 31, 2010. Through the largest program, Energy Conservation Helping Oregonians (ECHO), low-income households that use electricity as their primary heat source can receive weatherization measures such as insulation, energy-related minor home repairs, air infiltration reduction, furnace repair and replacement, heating duct improvements and energy conservation education. (About 70 percent of Oregon's low-income households use electricity for heat.) Other households may receive education and baseload measures. During the two-year period, ECHO weatherized 4,287 homes with a combined estimated electricity savings of almost 13 million kWh yearly, spending about $16 million. The majority of households served included elderly and disabled members and young children; these households are given priority for service. The second program, multi-family rental housing, provides grants for the construction or rehabilitation of affordable rental housing. At least 50 percent of the units in the project must be rented to households whose income is at or below 60 percent of the area median income. Projects receiving funds must also remain affordable for at least 10 years. Program resources may be used for weatherization measures such as windows, doors, and insulation, as well as baseload measures, including energy-efficient appliances and lighting. Around $5.2 million was committed to 19 projects during the two-year period. The overriding principle of the both programs is that 1 kWh must be saved for every dollar spent, and their effectiveness is evaluated according to that measure. Additionally, OHCS receives and administers PPC funds for low-income housing. A total of 4.5 percent of the PPC funds are dedicated to low-income housing development projects, either construction of new housing or rehabilitation of existing housing for low-income families through the OHCS Housing Trust Fund. Oregon is the first Northwest state to follow the recommendations of the 1996 "Comprehensive Review of the Northwest Energy System," a report generated by a committee convened by the governors of Montana, Idaho, Oregon and Washington to reach consensus on how to restructure the region's electric utilities. The Committee's report recommended that three percent of the revenues from the sale of electricity services in the region be set aside for public purpose programs. Montana's 1997 restructuring legislation set aside 2.4 percent; the other two states have not enacted restructuring legislation. For more information on the low-income public purpose funds, see the following: Chapter 757, the latest version of the law authorizing the public purpose charge. Report to Legislative Assembly on Public Purpose Expenditures, released in March 2011 by ECONorthwest. OLGA Annual Report, 2010-2011 Page last updated: May 8, 2012 |