Low-Income Texans Will Lose Electric Bill Discount

A Texas low-income electric discount program that currently enrolls about 382,000 customers and is considered a national model because of its automatic enrollment process, will operate through August 31 and then be suspended indefinitely.

The reason: the state legislature last month shifted money from a system benefit fund (SBF) that provided $75 million for the discount during FY 2004 to the state general fund to help balance the state budget. Since 2002, electric customers in deregulated areas of the state have paid a monthly fee of 65 cents per 1,000 kWh, designated by the state’s 1999 restructuring law to fund the low-income discount, energy-efficiency projects and a consumer- education campaign.

Since January 2002, low-income customers in areas of retail electric competition have been eligible for the discount (called LITE-UP Texas), which started out at 10 percent, averaging about $10 per month. Customers automatically qualify if they receive certain benefits such as Food Stamps, Medicaid or Low-Income Medicare or TANF, or if their income is at or below 125 percent of federal poverty level. In May of 2002, the Texas Public Utility Commission increased the discount to 17 percent.

During FY 2002, its first year, over 750,000 households received discounts totaling about $87 million. But the discount soon became a target for a legislative raid. In late 2003, faced with a budget deficit, the legislature redirected about $183 million from the SBF to the state's general fund. As a result, the discount dropped to 10 percent and rule changes instituted during 2004 made it harder for families to qualify for it. The state’s low- income weatherization program, which also had been receiving money from the SBF, was also zeroed out at the end of FY 2003.

Calling the demise of the discount “ an exceptionally horrendous example of bad government,” an editorial in the Fort Worth Star- Telegram pointed out that many state legislators had agreed to support the state’s electric restructuring bill only if it included funds to help low-income Texans pay their bills. “Elimination of the discounts would unconscionably violate the agreement reached among lawmakers in 1999,” the editorial said.

Rep. Sylvester Turner, who had pushed legislation to restore the SBF’s designation for the discount, said that lawmakers should not “bamboozle” ratepayers by charging them fees for electricity and then redirect the money to other purposes.

Texas newspapers have also noted that electric utility bills have been skyrocketing in North Texas and elsewhere as a result of soaring prices for natural gas burned to generate electricity. TXU, one of the state’s largest utilities, recently instituted a 10 percent rate hike.

Source: Texas newspapers

Page Last Updated: December 7, 2005