Overview of Low-Income Restructuring
Legislation and Implementation

Rhode Island
Last update: April 2008

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 orders the Public Utility Commission (PUC) to "promulgate such for the rules and regs as necessary to protect consumers following . . . competition." Using the 2.3 mil per kWh specified in the bill, the PUC set up a "demand-side management" 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 PUC approved the continuation of 8 residential programs in Order No. 19179, dated January 1, 2008 with a budget of $5.3 million. Low-income programs are expected to receive about $2.1 million of the budget.

Single Family Low Income Services (formerly named the Low Income Appliance Program) is the only program exclusively for low-income households. LIHEAP-eligible customers living in 1-4 unit buildings are eligible for ENERGY STAR refrigerators and lighting and electric water heating energy efficiency measures. The program targets low-income households that are serviced through the National Grid Company and is administered by the Rhode Island State Energy Office. The Single Family Low Income program expects to provide services to 806 households in 2008 with a projected budget of almost $1.5 million.

Another energy efficiency program, EnergyWise, expanded to include all residential customers in 2001. Administered by National Grid, Rhode Island's only investor-owned utility, EnergyWise offers free energy audits to all residential customers and apartment building owners. Rebates and low interest loans are available for installing more cost-effective lighting fixtures, appliances, thermostats and insulation. The program now provides combined services for gas and electric customers.

EnergyWise also provides services to Public Housing Authority properties and other low-income multifamily buildings. Co-payments are waived on all measures except refrigerators for state and federally-funded buildings and facilities where at least 50 percent of the tenants are low income. EnergyWise expects to provide services to 240 low-income participants in 2008 with expenditures of $320,000.

All residents can participate in the ENERGY STAR Homes program. Rhode Island Housing encourages developers to build to ENERGY STAR Home standards and about 133 low-income homes (30 percent) are completed each year with a projected budget of $285,000 for 2008.

Funds collected through the ratepayer charge also supplement the State Energy Office's weatherization program that assists about 1,000 low-income households each year with energy audits, appliance and furnace replacement, window repair, energy efficient lighting, water saving and air sealing measures, insulation and health and safety measures.

The restructuring law also preserved special rates for low-income customers. National Grid offered a 20 percent electric discount rate, totaling about $6.2 million, to 37,472 low-income households in 2007. To qualify for the discount, a customer must be the head of household and receive Social Security, LIHEAP, Medicaid or other supplemental assistance.

On June 29, 2006, Rhode Island Governor Donald L. Carcieri signed an energy bill, The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 was expected to start providing energy bill relief in FY 2008 to low-income households. The bill is 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 tax on gross receipts for both electric and gas utilities and was projected to be approximately $15 million per year. Revenues from 1 percent out of the 2 percent gross receipts tax on electricity and natural gas would provide an anticipated $14 million and 2 percent from the sales tax on heating oil would provide an anticipated $1million.

Starting in November 2007, National Grid low-income customers were supposed 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 for electric charges at a monthly usage not to exceed 500 Kwh per month.

However, due to budget constraints the Rhode Island General Assembly in June eliminated all funding for the Energy Affordability Fund for FY 2008. The state still collects the gross receipts tax, but the money goes for other state programs. As a result, the utilities are not required to implement a discount on distribution rates.

A debt forgiveness plan that started in July 2007 is still in effect. LIHEAP-eligible customers (125 percent of federal poverty level,) of the 3 utilities will have 37.5 percent of their current unpaid electric and gas bill balance forgiven at the end of 3 years if the customer initially pays 25 percent of the unpaid balance and pays 1/36 th of one-half of the remaining balance per month for 36 months. The customer must keep current with payments for current usage. The arrearage forgiveness plans are expected to be funded by $1 million from the Affordable Energy Fund in 2010.

For more information:

PUC Order No. 19179, approves continuation of demand side management programs, January 1, 2008

Summary of the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006

Rhode Island Energy Affordability Fund Usage, strategic plan, March 1, 2007

 

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Page Last Updated: April 1, 2008