By Steve Haner
Green energy advocates never tire of telling us that accomplishing their zero-carbon electricity supply will lower our costs. If so, why does their dream bill include a new income transfer entitlement program for low-income customers?
It is called the Percentage of Income Payment Program with a handy acronym PIPP. It first appeared in Delegate Lamont Bagby’s House Bill 1483. The Henrico County Democrat saw his bill pass the House Labor and Commerce Committee February 4, but for good measure it is now enshrined on lines 1828 through 1909 of the omnibus clean energy bill revealed February 6, House Bill 1526.
B. The monthly electric utility payment of any person participating in PIPP shall be capped at six percent, or, if the participant’s home uses electric heat, 10 percent, of the participant’s household income. A participant may further reduce his monthly electric utility payment through a conservation program incentive. Under this program incentive, if a participant lowers his monthly electricity usage below his historical baseline average, the participant’s electric utility bill for such month shall be reduced by 50 percent of the monetary amount by which such participant lowered his usage.
…Participants who transition to a budget billing system in accordance with this subsection shall be forgiven of any arrearages on electric utility bills accrued prior to participation in PIPP upon making timely and full PIPP payments to the electric utility provider for 12 consecutive months; all other PIPP participants shall be forgiven of arrearages accrued prior to participation in PIPP after making timely and full PIPP payments to the electric utility provider for 12 consecutive months.
Those eligible will be those already qualified for Medicaid (a longer list than it was), existing energy assistance programs, the Supplemental Nutrition Assistance Program (SNAP) and its related program for Women, Infants and Children (WIC), housing vouchers and other major programs. How many individual Virginians or customer households is that? Nobody knows or is saying.
The House bill will be on the floor for a full vote early in the week, and the Senate Commerce and Labor Committee is expected to see its version of this gigantic energy law re-write in a Sunday afternoon meeting. A full understanding of the bill will take time, longer than any of the legislators will be willing to take before voting. But PIPP stands out as something new and unexpected. Something similar exists in Ohio, where Dominion has a natural gas company.
Being in PIPP will require you participate to in an energy efficiency and weatherization program and submit to an annual energy use audit. For a cap on your monthly bill, and a payoff on any overdue bills from the past, most will probably be willing. The line should form quickly.
How will the state fund the new round of efficiency training, audits and make overs? How will it be possible to limit people’s bills while participating in the program, and then cover any arrearages from before the program, without costing the utilities millions of dollars in lost revenue? Other ratepayers will cover the bills, of course, feeding a new Percentage of Income Payment Fund at the Department of Housing and Community Development.
The Fund shall consist of moneys contributed by electric utility providers after collection from ratepayers through “a non-bypassable universal service fee” pursuant to a new section 585.5 in Title 56. That directs the State Corporation Commission to set the rate purely on the basis of usage. Nothing segregates the cost by customer class. “Non-bypassable” means nobody in the utility service territory can escape paying it by using a different competitive supplier.
The new customer charge and the programs it funds appear to apply only to the territories of the two major suppliers, Dominion Energy Virginia and Appalachian Power Company. The final line in the section setting up PIPP exempts the regional cooperatives and their customers (apparently both from paying and from benefiting.)
Pulling out the coops makes it harder to estimate the impact of this, as they have plenty of customers now using public assistance. But the concentrated poverty is in the more urban areas where the monopoly utilities serve. About one in seven Virginians participates in Medicaid, and the other programs likely extend the potential reach of PIPP. This could be 15% or more of residential customers.
Of course, you shouldn’t be turning to a blog to figure out the financial impact. The General Assembly members should have handy firm estimates on the number of people involved, how much their electric bills will be lowered, and how much other customers will have to pay in addition to provide those subsidies. But of course, there are no such estimates, no formal fiscal impact statement, not even on Bagby’s stand alone bill.
At the very least, somebody should produce financial details on that Ohio program, which proved elusive in a brief Internet search. Dominion lobbyist William Murray mentioned and praised the Ohio program in the committee hearing. He said the utility was “excited” to bring it to Virginia.
There is another bill, already approved in the House of Delegates, that authorizes yet another new rate adjustment clause (rider) on our bills for similar reasons. But it wants to use our money to subsidize solar installations for low-income or elderly customers. House Bill 1656 has a Republican sponsor and places a $25 million annual cap on how much can be extracted from other customers for this transfer of wealth. Given that there is no reason to think it will not pass and exist side by side with PIPP (on our bills, at least).
There is at least one more benefit for low-income Dominion customers in the giant clean energy bill. As with the earlier version of a bill directing the SCC to approve a massive offshore wind installation, the language on that embedded in House Bill 1526 also exempts them from the coming rate rider that will pay for that. An SCC estimate last week put that at about $13 per month per household, but whatever percent of customers are exempt, everybody not exempt will pay that much more.
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