PUC eyes aid to low-income ratepayers

Posted Aug. 07, 2008, at 12 a.m.

AUGUSTA, Maine - The Public Utilities Commission has started proceedings to determine whether to increase the aid going to low-income Mainers under the Low Income Assistance Program to help them pay their electric bills.

“We are very pleased the commission has started this proceeding on their own initiative,” said Public Advocate Richard Davies. “There has not been an increase in this program since April of 2006, and we have seen significant increases in rates since then.”

On Tuesday, PUC Commissioners Sharon Reishus and Vendean Vafiades voted to open a proceeding that would expand the total cost of LIAP from about $7 million to about $7.9 million.

In 2007, the program provided help to about 40,000 Mainers at a total cost of a little more than $6.9 million. The eligibility requirements for the program are based on the federal poverty level, the same standard used for the federally funded Low Income Home Energy Assistance Program.

About 50,000 Mainers are projected to qualify this winter for LIHEAP, although regional community action programs around Maine report that many of the calls they are receiving this month are from residents who did not qualify or apply last winter.

“[It] is low-income individuals that will be helped by this increase” in LIAP funding, said Sarah Gagne Holmes, executive director of Maine Equal Justice Partners, a low-income advocacy group. “Given the hard economic times, I am sure there will be more people seeking help this winter than last.”

She joined Davies in praising the PUC for starting the proceeding instead of waiting for her group or some other advocacy group to petition for an increase.

“Clearly the costs of electricity are going up,” she said. “It is absurd that people are placed in the position about deciding to heat their house or pay the electric bill or put food on the table or buy prescription drugs.”

Sen. Phil Bartlett, D-Gorham, co-chairman of the Legislature’ s Utilities Committee, agrees that the PUC should increase payments under the program. He acknowledged an increase in the program will be paid for by higher electric rates for consumers who do not qualify for aid.

“If we are not reaching out to help people when they are in the most dire of circumstances, what is government for?” he said.

Davies said the additional cost to other ratepayers for the proposed increase would be “pennies a month” and his office believes that the benefits to all ratepayers justify the increase.

“It will not only benefit low-income ratepayers it will benefit the whole class of ratepayers,” he said. “They will be helped because this will help low-income ratepayers stay current with their bills and reduce the problem of arrearages in payments to utilities.”

Davies said the PUC has the responsibility to make sure utilities are financially able to serve all their customers, and the problem with late payments will only grow because energy costs of all types are likely to increase.

Sen. Doug Smith, R-Dover-Foxcroft, said that while the PUC should certainly consider an increase, he believes a comprehensive look should be taken at all aid programs to focus them on the most needy.

“There may be some other options,” he said. “There is other aid potentially on the way from the federal government through the LIHEAP program, so I think we have to look at all of these programs.”

The PUC has asked that formal comments in the matter be filed by Aug. 13. Davies said he may seek a larger increase with the “standard offer” process due later this year for rates that will take effect in February. The standard offer is the default provider of electricity to the utility distribution companies and is set by the PUC based on bids it receives. Nearly all residential customers use the standard offer.

“From what we just saw happen with the standard offer for business customers, we may seek some sort of change now because we know rates will be going up again during the winter,” Davies said, referring to double-digit rate increases for businesses.

In the documents the PUC released as part of the case, Central Maine Power Co. was listed as having more than 77 percent of the residential customers in the state. Bangor Hydro-Electric Co. has more than 14 percent of the residential customers, and Maine Public Service has less than 5 percent.

But the PUC indicated that under its proposal, a little more than 65 percent of the money generated would go to CMP customers, more than 18 percent would go to Bangor Hydro customers, and nearly 10 percent would go to Maine Public Service customers.

The remaining seven electric utilities account for less than 4 percent of all the residential customers in the state.

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