State PBF/USF History, Legislation, Implementation
Last updated: July 2012
Wisconsin's "Reliability 2000" law, passed in late 1999 and modified in 2005, addressed long-term energy reliability issues and created public benefits funding for energy efficiency, renewables and low-income energy programs. The low-income programs are permanently funded.
Funding for the low-income energy portion of the public benefits fund (PBF) varies each year and comes from three sources:
- Prior utility (gas and electric) low-income expenditures. This source, which doesn't change each year, represents the amount utilities spent on low-income rate assistance and energy efficiency programs in 1998, determined by the Public Service Commission of Wisconsin to be $21 million. At the end of a three-year transition period in January 2003, utilities completed a mandated transfer of these funds and program operations to the Department of Administration (DOA), Division of Energy, the LIHEAP and WAP grantee.
- A new access fee or customer charge on all electric bills. This source, which is adjusted yearly, is based on a complex formula in the law that determines the level of low-income need as a function of income and energy cost. The law requires that 70 percent of the access fee come from residential customers and 30 percent from commercial and industrial. It also requires that any individual charge can be no more than 3 percent of the bill. For fiscal year 2011, the amount of state public benefits funding for low-income purposes (the prior utility expenditures plus the access fee) was about $75.6 million.
- The current year's federal LIHEAP and weatherization allocations. These, of course, change each year based upon Congressional allocations. For federal FY 2011, Wisconsin's LIHEAP funding (regular and emergency) was $137.4 million of which about $20 million (15 percent) was set aside for weatherization. Wisconsin's 2011 regular allotment from the Department of Energy Weatherization Assistance Program was $6.5 million; it also received $141.5 million from the WAP stimulus funds, to be spent over three years.
The law specifies that 47 percent of the total low-income funds must be dedicated to weatherization and 53 percent to bill payment assistance.
The law also requires municipal electric utilities and electric cooperatives to collect fees averaging $16 annually per customer, with half of the funds collected going to low-income programs. These utilities may use the revenues to establish and operate their own energy programs, or remit the money to the state public benefits fund. The total generated by municipals/cooperatives for the statewide program has been about $700,000 annually. Most municipals and co-ops retain the fees for their own internal low-income programs, so the total raised by these fees is actually much higher.
Since FY 2001, the Division has integrated the low-income PBF funds with LIHEAP in order to operate a program that addresses total home energy costs. Eligible low-income households receive a non-heating electric benefit, which is applied to their electric bill, while LIHEAP funds continue to be applied to their heating costs. During FY 2011, about $31 million in PBF funds was spent on energy assistance, helping about 220,000 households through an electric benefit averaging $142 and $2 million was spent on crisis assistance for 9,375 households who received crisis assistance averaging $212.
Households eligible for weatherization can receive enhanced energy-saving measures through the PBF and other funds, including refrigerator replacements, furnace upgrades, insulation, lighting upgrades, health and safety measures, and energy education. One unique aspect of Wisconsin's PBF is that although collected from electric and gas utilities, it is not fuel specific; thus, benefits are available for all fuel types.
During program year 2011, public benefits funds for weatherization (direct labor and materials) totaled over $14 million with over 5,000 units completed.
State Report: Wisconsin, from Ratepayer-Funded Low-Income Energy Programs: Performance and Possibilities, APPRISE and Fisher, Sheehan, and Colton, July 2007
More information, frequently updated reports, including evaluations of the low-income programs, can be found at the DOA Division of Energy website.