Connecticut regulators are proposing a discounted electric rate that would cut bills by as much as 45% for the state’s lowest-income residents.
In a draft decision released last week, the Public Utilities Regulatory Authority, or PURA, proposed a two-tier discount rate that would further efforts to reduce energy costs and help out customers before they fall behind on their bills.
The new rate won’t go into effect soon enough to help ratepayers this winter season, when energy rates are projected to continue their rise. The draft gives the state’s two electric distribution companies — Eversource and United Illuminating — until Nov. 1, 2023, to implement the rates.
Fortunately, in the meantime, “Connecticut has some pretty good protections in place on behalf of low-income ratepayers,” said Bonnie Roswig, an attorney with the Center for Children’s Advocacy, a Hartford nonprofit that advocates for low-income children and youth. “The challenge has always been to get the utility companies to ensure that their customers know about these programs. That’s been the disconnect.”
Regulators have been exploring ways to establish discounted rates since 2020, when lawmakers passed the Take Back Our Grid Act. Adopted in response to the utilities’ poor response to Tropical Storm Isaias, the act included a provision directing PURA to begin a proceeding to consider low-income rates that would “provide needed relief to our poorest citizens.”
After weighing input from the utilities, state agencies and advocates for low-income ratepayers, PURA has proposed a rate designed to ensure that building energy does not exceed 6% of income for any household, and to reduce the amount of uncollectible bills, which are ultimately paid for by all ratepayers.
The proposal calls for two tiers of eligibility for the discounts. Households with incomes at or below 60% of state median income would receive a 10% discount. The eligibility cap for a family of four, for example, would be around $75,000.
Any households already identified by the utilities as having a financial hardship would automatically qualify for the discount.
The second tier discount of 45% would be reserved for households earning no more than 160% of federal poverty guidelines. That’s a much lower income category — the cap for a family of four is around $42,000.
In order to qualify, households will have to show that they already receive benefits from assistance programs with similar income eligibility requirements, such as the Supplemental Security Income Program or Connecticut’s HUSKY health insurance plans.
Aligning the discount’s income levels with state and federal programs that people are already qualified for “makes a lot of sense” and will result in administrative efficiencies, said Gannon Long, policy and public affairs director at Operation Fuel, a fuel assistance program.
However, whether the 45% discount is steep enough to get households to “true energy affordability” is something “we just don’t know the answer to yet,” Roswig said. “If you have electric heat, how much is your monthly bill going to be? If it’s $350 a month, I don’t know if the discount will lower the bill enough to make it sustainable.”
As a cost-control measure, the proposal calls for a cap on each qualifying household’s monthly electricity usage. The cap is also necessary so the discounted rate doesn’t discourage energy conservation, PURA said.
Usage would be capped at 1200 kWh per month for electric heating customers, and 800 kWh for electric non-heating customers. The decision estimates that at least 75% of hardship customers would fall below those caps.
Advocates have reservations.
“The most vulnerable ratepayers are usually in the least control of their housing situation,” Long said. “They’re probably on Section 8, they don’t own a home, and their landlord may not want to retrofit their apartment to make it more efficient. As long as they don’t have any control over how efficient their housing could be, how can you hold people accountable for that?”
Roswig voiced a similar concern, but said she’s “cautiously optimistic” that their clients will fall under the usage caps, which she believes are “fairly generous.”
The state Department of Energy and Environmental Protection recently launched a program that will cover the cost of remediating mold, asbestos and other hazardous conditions that prevent residents from taking part in the state’s energy efficiency programs. Multifamily housing is a key focus of the remediation effort.
PURA is accepting briefs in response to the low-income discount rate proposal until Sept. 28. A final decision is due Oct. 19.