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State PBF/USF History, Legislation, Implementation

Rhode Island
Last update: January 2012
Summary

Rhode Island's Utility Restructuring Act of 1996 states that costs for low-income assistance and weatherization programs "shall be included in the distribution rates charged to all other customers" and using the 2.3 mils per kWh charge specified in the bill, the Public Utility Commission set up a demand-side management (DSM) program in 1997 to include 1) residential customers, 2) large commercial and industrial customers, 3) small commercial and industrial customers, and 4) renewable energy projects.

The Commission annually reviews the design and implementation of National Grid's (NGrid) proposed DSM programs. NGrid's approved $45.6 million budget for 2011 electric programs included $5.7 million for low-income programs, an increase of almost $2.2 million over 2010 programs. The utility's proposed 2012 $55.9 million budget includes $7.5 million for low-income programs.

In a November 2008 Settlement of Parties, the Commission approved to increase the 2.3 mils per kWh charge that funds NGrid's electric DSM programs to 3.2 mils per kWh. In 2011, the charge increased again by 2.06 mils per kWh to 5.26 mils per kWh. The monthly cost to a typical residential customer using 500 kWh is $2.63. For 2012, NGrid proposes to increase the electric energy charge another .63 mils per kWh for a total charge of 5.89 mils per kWh.

The Commission approved a budget of $6.6 million for NGrid's 2011 gas programs that included $983,900 for low-income programs. NGrid's proposed budget for 2012 programs is $13.7 million including almost $1.8 million for low-income programs.

In July 2011, the Commission approved NGrid's proposed increase of the gas energy efficiency charge from $0.15 per decatherm to $0.411 per decatherm. The cost for a typical residential heating customer using 922 therms per year is $37.89, a $24.06 annual increase that became effective in August 2011. NGrid's 2012 Plan proposes to decrease the charge for gas programs by $0.27 per decatherm resulting in a total $0.384 per dekatherm charge .

The Single Family Low Income Services is the only NGrid program exclusively for electric and gas low-income households. LIHEAP-eligible customers living in 1-4 unit buildings are eligible for ENERGY STAR refrigerators and lighting, heating system replacement, safety inspections and weatherization. The program, administered by the Rhode Island State Energy Office (OER) and local community action agencies, had a budget of $6.7 million and served 2,028 households in 2011 and anticipates spending $7.4 million for 2,931 households in 2012.

Another energy efficiency program, EnergyWise, includes all residential customers and offers incentives for gas and electric customers to implement efficiency improvements to single and multi-family residences. The proposed 2012 budget for electric customers is $7.5 million, an increase of $1.8 million over the previous year. Gas customers may receive incentives of $2.7 million in 2012, over $1.5 million more than 2011's approved budget. In 2012, the Company proposes to offer weatherization services to oil-heated customers as well.

All residents can participate in the ENERGY STAR Homes program. Rhode Island Housing encourages developers to build to ENERGY STAR Home standards and about half of homes completed each year are for low income. The projected budget is $1 million for 2012.

Funds collected through the ratepayer charge also supplement OER's state weatherization program that assists low-income households with energy efficiency measures, appliance and furnace replacement and health and safety education. The program received $3.5 million from NGrid in 2010; amounts were unavailable for 2011 or 2012.

Another customer charge, approved by the Commission and starting January 1, 2012, will require all NGrid gas and electric customers to pay a monthly charge of $0.83. Annual revenue from the charge is expected to be between $6.5 million and $7.5 million and will be deposited in NGrid's LIHEAP Enhancement Plan fund. The Fund will be used to reduce arrearages of customers with income equal to or less than 60 percent of state median income.

NGrid's proposed 2012 budget includes Regional Greenhouse Gas Initiative (RGGI) funds. On September 30, 2010, OER finalized rules for the distribution of RGGI funds for energy efficiency programs. According to the rules, sixty percent of the proceeds from the auction of CO 2 are to be directed to NGrid for continuing and expanding their Commission-approved energy efficiency programs.

NGrid received $3.9 million of RGGI proceeds from auctions 1 through 5 to fund 2010 programs and expected to receive another $3.2 million of the proceeds from auctions 6-10 for continuing support of energy efficiency programs. However, as of November 2011, the OER had distributed RGGI auction proceeds only from auctions that were conducted through the third quarter of 2009.

RGGI funds are held in a restricted account until NGrid gets approval to spend the money on energy efficiency and renewable energy projects. State law prevents the Governor from shifting RGGI money to cover a state budget shortfall.

The restructuring law preserved special rates (A-60) for NGrid's low-income customers and starting April 1, 2011, the Commission approved a per kWh credit of 1.368 cents for an average 39,679 households.

Background

On June 29, 2006, Rhode Island Governor Donald L. Carcieri signed The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 that was expected to start providing energy bill relief to low-income households in FY 2008. The bill was the culmination of several years of effort by advocacy groups to get a low-income energy assistance program.

The Act established the Affordable Energy Fund through a gross receipts tax on both electric and gas utilities and a sales tax on heating oil. Funding was projected to total approximately $15 million per year, with revenues from the 2 percent gross receipts tax providing about $14 million, and about $1 million coming from the heating oil tax.

Starting in November 2007, National Grid low-income customers were to receive a 50 percent discount on natural gas distribution rates and low-income customers of Block Island Power Company and Pascoag Utility District were to receive a 50 percent reduction on electric charges for usage up to 500 kWh per month.

However, due to budget constraints, the Rhode Island General Assembly eliminated all funding for the Energy Affordability Fund for FY 2008 and the FY 2009 state budget repealed the Act.

For more information:

Docket No. 4209 - National Grid's Energy Efficiency Program Plan for 2011 and related information

Docket No. 4295 NGrid's Energy Efficiency Plan for 2012, November 1, 2011

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Page last updated: January 20, 2012