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Introduced by   Senator Leddy of Chittenden District, Senator Condos of Chittenden District and Senator Illuzzi of Essex-Orleans District

Referred to Committee on


Subject:  Public service; regulation of corporations; fair share payment program

Statement of purpose:  This bill proposes to create a statewide electric bill payment assistance program for low income residential customers.


It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  30 V.S.A. § 209c is added to read:


(a)  Purpose.  It is the purpose of this section to:

(1)  Bring participating customers’ bills into the range of affordability;

(2)  Provide incentives for participating customers to make timely payments; and

(3)  Encourage participating customers to reduce usage and participate in conservation and energy efficiency measures that reduce the customers’ bills and payment requirements.

(b)  Definitions.  For the purposes of this section:

(1)  “Administrator” means the public service board or the office or agency appointed by the board to implement the fair share payment program.

(2)  “Amount overdue” means the amount that an electric company has properly billed to a customer that has not been paid in full by the due date of the bill or by a date otherwise agreed upon.

(3)  “Eligible customer” means any residential customer of an electric company who is taking or is eligible for residential service on a continuing year-round basis; and either:

(A)  The customer’s household qualifies for assistance from food stamps, Medicaid, TANF, LIHEAP, or programs administered by the office of home energy assistance within the agency of human services, pursuant to section 25501a of this title; or

(B)  The customer’s household income is at or below 150 percent of federal poverty guidelines as defined annually by the U.S. Department of Health and Human Services.

(4)  “Fair Share Payment Program” (FSPP) is a statewide program to assist low income customers in paying their electric bills.

(5)  “LIHEAP” means “Low Income Home Energy Assistance Program,” which is a federally funded program that provides financial assistance grants to needy households for home energy bills and is implemented by the office of home energy assistance.

(6)  “Participating customer” means a customer who qualifies, has applied, and has been determined to have received a benefit pursuant to the FSPP.

(7)  “Pre-program arrears” means a customer’s amount overdue at the time the customer is determined to be eligible for the FSPP.  This amount may consist of a customer’s overdue amount that is currently billed on the customer’s account and any prior unpaid debt owed to the electric company, but which was not transferred to the customer’s account prior to the determination of eligibility for the FSPP. 

(8)  “Residential customer” means any person who has applied for, been accepted, and is receiving residential service from an electric company.  This term also includes a person who has been previously a customer of the same electric company within the past 30 days and who requests service at the same or different location.

(b)  The board shall adopt by rule or order on or before September 30, 2005 an FSPP that:

(1)  Shall continue existing levels of financial assistance for low income households and meet future increases in need caused by economic exigencies.

(2)  Shall be available to all eligible low income residential customers served by electric companies subject to the jurisdiction of the board. 

(3)  Shall be funded by an assessment on the electric companies subject to the jurisdiction of the board.  The initial total statewide budget for the FSPP for the program year beginning September 1, 2005 shall be $8 million.  The funding amount shall be available for FSPP benefits, including arrears forgiveness payments, and administrative costs incurred by the program administrator.  Any incremental administrative costs incurred by an electric company shall be eligible for inclusion in the company’s next base rate case as an allowable expense.  The board shall monitor the affordability of prices for essential electricity service and the energy burden of the state’s low income electric customers and shall establish FSPP funding and expenditure levels and program design features that conform to an analysis of the needs of low income customers and the benefits of the FSPP every two years.  For the program year beginning the year after the initial program year and for all subsequent program years, the board will make any adjustments to the funding amount or other program design features that conform to the provisions of this section after an evaluation and review of the program’s operation, cost, and benefits to low income customers and its effect on the collection and working capital costs otherwise incurred by the electric company.  Any changes in the program design or budget for the FSPP shall be adopted after notice and opportunity for public hearing, and a finding by the board that the changes and program budget will ensure that the assistance provided by the FSPP is consistent with the needs of participating customers and the reasonable costs of the program as reflected in the rates of all ratepayers.

(4)  Shall establish a payment obligation for participating customers in the form of a percentage of household income after an analysis and balancing of the needs of eligible low income customers and the costs of the program to meet those needs.  The percentage of income shall not exceed the median percentage of household income spent for electricity statewide.  The percentage of income may vary within the state if the board determines that the percentage of income for electricity paid by median income households also varies significantly within this state.

(5)  Shall calculate an eligible customer’s estimated cost of service by multiplying the customer’s annual usage by the residential service rates in effect at the time of the determination of eligibility, including any fixed monthly charges, variable distribution and transmission service charges, and electric generation or supply charges.  The annual usage shall be determined in the same manner used by the company to calculate a budget or levelized payment plan for residential customers.

(6)  Shall ensure that a customer’s payment amount shall be calculated by multiplying the customer’s annual household income by the percentage of income that is established by the board and applicable to the customer, except that the annual customer payment shall not be less than 12 times any minimum monthly bill required by the applicable electric company tariff for the customer’s residential service rate classification.

(7)  May establish a minimum credit amount that, if applicable, will result in a participant’s exclusion from the FSPP when the cost of administering the benefit amount exceeds the actual amount of any monthly benefit to the customer.

(8)  Shall ensure that eligible customers will be screened for participation in the FSPP by determining whether a customer’s projected payments for electric service over a 12-month period exceed the customer’s payment that, pursuant to this section, represents an affordable payment.  The difference between the customer’s calculated monthly payment and the estimated cost of electric service will be divided by 12 and applied to the customer’s monthly electric service bill in the form of a fixed credit.  Any applicable seasonal fuel benefit for the customer’s electric service shall be subtracted from the total amount of the otherwise applicable fixed credit.  Any other emergency or crisis assistance LIHEAP payment shall not be subtracted from the amount of the fixed credit, but shall be applied to the customer’s account in the normal course of the administration of such emergency or crisis benefit programs.  A participating customer is responsible for all actual charges for electric service in excess of the fixed monthly credit.

(9)  May require the customer to enter into a levelized payment plan for the balance of the estimated annual bill in excess of the fixed monthly credit.  Any such levelized payment plan shall be administered by the electric company, so that a customer’s actual usage and required payments are reviewed regularly and adjustments made to assure payment in full by the end of the payment plan. 

(10)  Shall ensure that the participating customer will be responsible for actual usage during the program year and the actual monthly bill in excess of the fixed FSPP benefit so that a participating customer who uses less than the estimated usage used to calculate the fixed credit shall benefit from this lower usage in the form of a lower monthly bill, and a customer who uses in excess of the annual usage used to calculate the fixed credit shall be responsible for the payment of the additional charges.  The board may provide an exemption to this rule to require an adjustment to the customer’s monthly credit amount when the customer moves to a new location, when electrically powered life support equipment is installed at the customer’s location and the customer notifies the electric company, or when adults who reside in an FSPP household legally separate and change the responsible name on the account.

(11)  Shall ensure that during the term of the FSPP payment plan, each electric company shall offer a participating customer with preprogram arrears an option to obtain forgiveness of the customer’s arrears balance pursuant to an arrears forgiveness program adopted by the board.  An arrears forgiveness program will allow a customer to obtain forgiveness of the outstanding arrears balance in return for monthly payments of a portion of the arrears balance.  The board may establish minimum payments for the arrears balance that vary with the customer’s household income, the age and amount of the arrears balance, and the availability of financial assistance from other sources to pay the arrears balance.   

(12)  Shall ensure that as a condition of program enrollment, an FSPP participant shall accept all no-cost, demand-side management measures and programs available to the participant’s dwelling or rental unit unless the participant is a renter and the owner or landlord withholds the required consent.

(13)  Shall ensure that the intent of this program is that FSPP assistance will not be counted as income or as a resource in other means-tested assistance programs for low income households.  The FSPP will therefore be administered in a way that ensures that FSPP assistance will not result in the loss of other federal or state assistance dollars.

(c)  This section does not confer any automatic right or entitlement on any person.

(d)  The board shall determine the funding obligation for each electric company based on each electric company’s reasonable proportion of the statewide FSPP budget for each program year.  Each electric company shall transfer the required funding for FSPP to the administrator.

(e)  Program funding associated with the costs of the FSPP shall be recovered from all customers of each electric company by means of a nonbypassable per kilowatt-hour charge.  The cost recovery methodology established by the board may adopt a maximum per customer meter charge in addition to or as a substitute for the otherwise applicable per kilowatt‑hour charge as long as the board determines that all customer classes are contributing an equitable amount to the funding of the FSPP.

(f)  The board shall require the electric companies to maintain sufficient data on participating customers so that the net costs of the program can be determined, including participating customer arrearages, incidence of nonpayment, disconnection of service, terms for reconnection of service, frequency of bill payment, overdue balances incurred, uncollectible expense, customer contacts and disputes, payment arrangement terms, and other relevant electric company operations and maintenance expenses, and impacts on electric company cash working capital. 

(g)  The board shall appoint an administrator to implement the FSPP in coordination with the delivery of LIHEAP and the weatherization assistance program, other statewide financial assistance programs, or community‑based organizations that already have a vital role in the implementation of energy and financial assistance programs for low income households that will assure the most efficient determination of eligibility and benefit amount in coordination with existing programs in this state. 

(h)  During each program year, the administrator shall track and monitor program costs, available funds, and cumulative benefit expenditures.  The administrator shall file quarterly reports with the board in an electronic data format satisfactory to the board.  The quarterly reports shall include information as required by the board to track the implementation and performance of the FSPP in meeting the purpose of this program.

(i)  The administrator shall be entitled to receive actual incremental administrative costs associated with the implementation of the FSPP to include costs incurred by any local community‑based organizations that are associated with the implementation and administration of the FSPP.

(j)  The administrator shall develop an automatic enrollment method such that potentially eligible participants are identified by the administrator and enrolled in the FSPP annually.  This methodology will require the matching by the administrator of a customer’s estimated annual electricity and estimated annual bill for service, amount overdue, and the customer’s annual household income.  The board shall require that any entity that obtains access to customer‑specific account and income information shall assure that such information remains private, and that the entity’s use of this private information will be limited to the implementation of FSPP.  The transmittal of customer‑specific information designed to screen electric customers for enrollment in FSPP is intended to implement an additional benefit within the meaning of the consumer privacy policies of the federal Social Security Act.

(k)  The board shall require that customers who are automatically screened and enrolled in the FSPP through the data matching process in subsection (j) of this section shall be informed of their enrollment in the program, the amount of the fixed credit that will appear on the customer’s electric bill, how to participate in the arrears forgiveness program, and the customer’s obligation to participate in no-cost energy management services.  Each customer shall also be offered an option to not participate in or opt out of the program. 

(l)  The administrator shall conduct an impact and process evaluation of the FSPP every two years, which shall analyze and determine the impact of the program on program participants and their ability to pay and retain electric service, the efficiency and effectiveness of the administration of the program, the impact of the program on electric company credit and collection expenses, including cash working capital and uncollectible expense, and generally assess the costs and benefits of the program.  The reasonable costs of any required evaluation shall be reimbursed from the FSPP funds.

(m)  The board shall require that the administrator and electric companies work together with the program administrator to identify cost-effective ways to transfer information electronically and to employ available protocols that will minimize administrative costs.

(n)  The board may require electric companies to provide such information on customer usage and billing and payment information as required by the  administrator to implement the FSPP and provide written notices and communications to participating customers. 

(o)  The electric companies shall bill and collect the monthly bill of an FSPP customer pursuant to the same programs and policies as applicable to residential customers generally.

(p)  Each electric company shall file quarterly and annual reports with the administrator and the board that cumulatively summarize and update program information.

Sec. 2.  30 V.S.A. § 209(b)(4) and (5) are added to read:

(4)  Regulate the conditions and procedures under which electric companies disconnect residential customers during the winter period in order to prevent the adverse impacts on health and safety due to the lack of essential electric service during this period.  The disconnection of a residential electric customer that has demonstrated the inability to pay for service and is over 65 years of age, has an infant in the household, or is disabled shall occur only after an electric company has obtained approval for such disconnection from the department of public service.  Such an approval may be delegated to the department staff.  Electric companies shall offer extended payment plans to those households with a demonstrated inability to afford winter electric company bills.

(5)  Prescribe a monthly and rolling 12-month cumulative reporting requirement for electric companies that includes information on disconnection of service, reconnection of service, deposits, payment arrangements, and other indicia of electric company credit and collection programs.  Such reporting requirements shall require that, with respect to residential customer class information, the reporting data be reported separately for residential customers as a whole and for those customers identified in the electric company’s records as low income residential customers as indicated by receipt of financial and energy assistance applied to the customer’s account.  

Sec. 3.  33 V.S.A. § 2604(a) is amended to read:

(a)  Household income requirements.  The secretary, by rule, shall establish household income and asset eligibility requirements of beneficiaries in the seasonal fuel assistance program including the income and assets of all residents of the household.  The eligibility requirements shall require that households have a net household income no greater than 125 150 percent of the federal poverty level in order to be potentially eligible for benefits.  Net income shall be derived by making the following deductions from gross income:  20 percent of household members’ gross earned income; 100 percent of federal or state earned income credits received by household members; dependent care expenses that are within an allowable maximum, paid by a household member, and necessary to support a household member’s employment or training for employment, according to criteria established by the secretary by rule; child support or alimony payments made by a household member on behalf of a nonhousehold member that meet criteria established by the secretary by rule; $150.00 for each household member who is 60 years of age or older or disabled according to criteria established by the secretary by rule; any deductions or exclusions required by federal law or regulations; and any other deduction or exclusion established by the secretary by rule.

Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont