Public Benefits / Universal Service / System Benefit Funds
During the 1990’s over half of the states passed or considered some form of restructuring or deregulation of their electric and natural gas utilities with an overall goal of fostering competition among providers of electricity and natural gas. By 2001, the momentum towards restructuring had slowed and some states delayed implementation of the laws they had passed. Nevertheless, as a result of the state restructuring activity, 22 states were able to either expand their existing utility ratepayer-funded low-income energy programs or to create new funding sources and new programs, including two states (WI and VT) that did not restructure or deregulate, but did pass comprehensive energy legislation that included low-income energy funding.
In the 22 states, low-income energy programs, as well as energy programs for other customer classes, are funded through a charge or charges assessed on electric and/or natural gas consumers, which states variously refer to as a public goods surcharge, system benefits charge, societal benefits charge, public benefits fee, universal service fee, universal energy charge, meters charge, etc. Some states impose the charge or fee only on electric bills, and, thus, provide only electric assistance programs. Some impose the charges on electric and gas customers and provide programs for both types of customers. Most states provide both rate assistance and energy efficiency programs for the low income, with rate assistance generally receiving the largest amount. The charge may be assessed on all customers, a mix of residential, commercial and industrial, or only residential. In most states, the funds are administered or overseen by a state agency, typically the state LIHEAP/weatherization agency or the regulatory commission.