Low-Income Home Energy Assistance Program (LIHEAP) Clearinghouse acf home privacy policy
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Low-Income Restructuring Principles, Resolutions

NOTE: Amid the move toward utility restructuring a variety of groups with a public interest, consumer, or low-income focus have issued "principles" statements or resolutions intended as guidance for legislators, regulators and advocates as they explore restructuring options. Many stress a commitment to universal access, affordability and to continuation or expansion of low-income energy programs. The statements or resolutions contained here are presented as examples for informational purposes only.

Groups authoring the principles listed here are:

National Low Income Energy Consortium

National Association of Regulatory Utility Commissioners

Electric Consumers Alliance

Low Income Advocates

National Consumer Law Center and National Community Action Foundation

National Energy Assistance Director's Association

American Public Power Association

Public Citizen

National Conference of State Legislators

Minnesota Stakeholders

The Alliance to Protect Electricity Consumers

National Association of State Utility Consumer Advocates

State and Local Government Electric Industry Restructuring Coalition

Virginia Citizens Consumer Council


NATIONAL LOW INCOME
ENERGY CONSORTIUM

PRINCIPLES

To Protect Low Income Residents and Consumers
In the Restructuring of the Electric Industry
November 6, 1998

 
WHEREAS, Federal and State legislators and regulatory commissions are considering or   implementing proposals to restructure the electric utility industry to move from a regulated environment to a more market-oriented environment; and

WHEREAS, on average, low-income and fixed-income households pay a larger percentage of their incomes for electricity than any other customer class; and

WHEREAS, affordable housing of which utility service is a vital component, is a necessity for the low-income community; and

WHEREAS, electric deregulation should occur only if essential consumer protections are in place; and

WHEREAS, consumer protections are particularly important for the most vulnerable members of our society, e.g., low-income persons, persons with disabilities, older persons, and those with limited English language capabilities; and

WHEREAS, consumer education is a key component to providing customers the opportunity to make informed choices; and

WHEREAS, further consumer protections are necessary to protect against any detriments of health and safety during periods of extreme (hot and cold) weather; and

WHEREAS, to carry out the objective of protecting low-income households, the specific policies articulated below must be implemented in concert with any program that restructures the electric industry;

 NOW THEREFORE BE IT RESOLVED, that the National Low-Income Energy Consortium urges that any plan to restructure the electric industry include the following principles and components:

1. Low-income customers must have access to reliable electric service at affordable rates.

2. All customers must have the ability to obtain adequate, safe, reliable, and efficient energy services at fair, reasonable, and affordable prices.

3. Unfair cost-shifting to residential customers should be prevented.

4. Effective participation by all consumers, including low-income consumers, in the electric industry restructuring debate is essential.

5. State electric restructuring legislation and regulation must include provisions and funding for comprehensive and ongoing consumer education so that consumers have the opportunity to make informed choices among providers and services. A portion of available funding should be allocated to organizations which have the greatest ability to communicate with the low-income community.

6. Electric industry restructuring legislation and regulation must include strong consumer protections against anti-competitive behavior, undue discrimination, poor service, and unfair practices involving credit, billing, and disconnections.

7. In addition to any rights or remedies that exist currently in the law for redress to the courts, electric industry restructuring legislation should grant jurisdiction to state regulatory agencies for the purposes of certifying electric energy providers and marketers, reviewing unfair trade and marketing practices; and addressing customer disputes, credit, billing and collection practices, and customer service adequacy.

8. A competitively neutral, nondiscriminatory and non

bypassable system benefit charge among other mechanisms must be created to provide meaningful programs to assist eligible low-income customers to meet their energy needs including assistance in energy payments and energy-efficiency services. A system benefit charge should be used to supplement

LIHEAP and the DOE Weatherization Program.

9. States should make meaningful effort to limit disproportionate environmental impacts of electric restructuring on low-income neighborhoods.

10. State government action must encourage and facilitate options such as aggregation to allow low-income customers to increase their individual purchasing power.

11. State government action must strongly encourage the continuance and further development of energy-efficiency activities, including the availability of funds for energy-efficiency programs and research and development.

 

RESOLUTION ON THE IMPACT OF ELECTRIC INDUSTRY
RESTRUCTURING ON LOW-INCOME RESIDENTIAL CONSUMERS
Executive Committee, National Association of Regulatory Utility Commissioners
Summer 1995

WHEREAS, as a result of actions taken by Federal and State regulators, the electric utility industry is now undergoing significant structural and operation changes as more market oriented policies are implemented; and

WHEREAS, while the injection of greater competition into electricity markets has the potential to improve the efficiency of utilities, there is also the possibility that these changes could lead to cost shifts among customer classes in ways that increase costs and disproportionally affect low-income residential customers; and

WHEREAS, on average, low-income households pay a larger share of their incomes for electricity than any other customer class, now, therefore be it

RESOLVED, that the Executive Committee of the National Association of Regulatory Utility Commissioners (NARUC), convened at its 1995 Summer Meeting in San Francisco, California urges the Federal Energy Regulatory Commission and individual States, when implementing policies to restructure electric utility services and operations, to protect low-income customers from adverse impacts of such restructuring by including safeguards which, among other policies a State may deem appropriate:

* Prevent unfair cost-shifting between customer classes;

* Make available the benefits of a competitive market to each customer class without undue discrimination;

* Maintain fair and reasonable billing and collection practices;

* Sustain commission-approved low-income energy efficiency and rate programs;

* Limit disproportionate environmental impact in low-income neighborhoods; and

* Ensure the effective participation of all citizens in the restructuring debate.

 

 

RESOLUTION ENDORSING FEDERAL LEGISLATIVE PROVISIONS
TO PRESERVE AND PROMOTE PUBLIC BENEFITS PROGRAMS
IN THE NATION'S ELECTRIC INDUSTRY
(Convention Floor Resolution No. 23)
Executive Committee, National Association of Regulatory Utility Commissioners
November 11, 1997

WHEREAS, State commissions and legislatures, the Federal Energy Regulatory Commission FERC) and the Congress are in the process of developing and implementing new policies to move the electric industry to reliance on greater competition in the marketplace; and

WHEREAS, For almost two decades, electric utilities across the United States have been making productive investments in energy efficiency, renewable energy, low-income service, and long-term research and development; and

WHEREAS, Energy efficiency investments have cost-effectively reduced the need for new generation by more than 40,000 megawatts, while helping to cut the energy requirements of appliances such as refrigerators and freezers by more than two-thirds; and

WHEREAS, Hundreds of thousands of low-income households have received targeted energy assistance, and residential customers have been spared the threat of disconnection during periods of extreme heat and cold; and

WHEREAS, Utilities have helped build a strong industrial base for delivering energy from wind, solar, biomass, and geothermal sources, creating the opportunity to diversify a power-plant fuel mix that is still fossil- and nuclear-dominated; and

WHEREAS, Spending on these programs has been dramatically curtailed in anticipation of increased competition in the electric industry; and

WHEREAS, The National Association of Regulatory Utility Commissioners (NARUC) adopted in November 1994 a Resolution on Competition, the Public Interest, and Potentially Stranded Benefits which states "that a fundamental responsibility of state and federal electric utility regulators in this transition period is to assure that vital public interests and established public benefits will be preserved in any restructuring of the electric utility industry;" and

WHEREAS, NARUC adopted in July 1995 a resolution setting out "Principles to Guide the Restructuring of the Electric Industry" which states, among other things, that "The public benefits of energy efficiency, renewable resource technologies and research and development should be maintained through existing or new mechanisms;" and

WHEREAS, As Congress addresses restructuring policies, it is essential that the nation develop effective mechanisms for retaining and expanding these potentially "stranded benefits," and such mechanisms should not distort emerging competitive markets in electricity, nor should they erode states' traditional responsibilities for ensuring that electricity-related public benefits are widely and appropriately shared; and

WHEREAS, The nation has a compelling interest in preserving and promoting these public benefits, for the good of consumers, the economy, and the environment; and

WHEREAS, There are successful precedents in telecommunications regulation for State and Federal coordination in the delivery of public benefits associated with utility services; now, therefore, be it

RESOLVED, That the National Association of Regulatory Utility Commissioners (NARUC), convened at its 109th Annual Convention in Boston, Massachusetts, hereby urges Congress, as it considers legislation to restructure the nation's electric industry, to include in such legislation workable mechanisms to support State and utility public benefits programs such as energy efficiency, renewable energy technologies, research and development, and low-income assistance; and be it further

RESOLVED, That the design principles for such mechanisms should consider, among others:

A Federal-State partnership, building upon state and utility expertise in designing and implementing electric service and public purpose programs, and leaving the greatest possible degree of flexibility and regulatory oversight to individual States;

Such programs may be designed, supported, and delivered through the nation's electric system, using broad-based, competitively-neutral funding mechanisms, subject to regulatory oversight; and

Federal support should be made available to assist and encourage the states to develop and implement public purpose programs that meet the needs of the States and the nation;

and be it further

RESOLVED, That NARUC will, under the direction of the Ad Hoc Committee on Restructuring and relevant standing Committees, develop and present to NARUC's Executive Committee for its approval detailed recommendations, consistent with these design principles, on the mechanics, governance, funding levels, and rate elements of one or more mechanisms for delivering public benefits programs to consumers across the nation.

______________________________________________________________________________

Sponsored by the Committee on Energy Resources and the Environment and the Committee on Electricity Adopted by the Executive Committee on November 11, 1997

 

 

ELECTRIC CONSUMERS' BILL OF RIGHTS
Electric Consumers' Alliance
March 1995

We are customers, suppliers, and employees of the electric utility industry. Restructuring of this industry through the introduction of efficient competition will have a direct impact on each of us. Although we come from different perspectives, we are united in certain common beliefs. Specifically, there are certain fundamental principles that must be pursued and upon which the success of this transition depends. Those tenets are set forth as follows:

 

Benefits for All Consumers Competition in the electric utility industry shall be implemented in a manner to benefit all consumers equitably, and shall not advantage one customer group to the detriment of another;
Costs Paid by Those Who Cause Them Competition in the electric utility industry shall be implemented in a manner by which costs are assigned to cost-causers, and not left to be recovered from residential and small business customers;
Support for Environmental and Social Policies Competition in the electric utility industry shall be implemented in a manner that supports, rather than jeopardizes, existing and evolving social and environmental policies and programs;
Direct Consumer Input Competition in the electric industry shall be implemented in a manner that promotes consumer participation in decision making during the transition to competition and in matters that remain subject to regulation.
Continued Reliability and Accountability Competition in the electric utility industry shall be implemented in a manner to meet or exceed current levels of reliability and accountability.


POLICIES TO PROTECT THE RIGHTS OF VULNERABLE CUSTOMERS
IN THE RESTRUCTURING OF THE ELECTRIC UTILITY INDUSTRY
Low Income Advocates
Tucson Principles
September 1995

Whereas, many states and the Federal Energy Regulatory Commission are considering proposals to restructure the electric utility industry that could change how electricity services are priced and provided; and

Whereas, electricity is necessary to maintain health and safety for fixed-income and low-income customers in this modem era, that as a group these households use the least amount of electricity but pay the highest percentage of their income for this need; and

Whereas, fixed- and low-income households with children, older persons, disabled people and minority customers are the most likely to be exposed to the toxic and environmental effects of electricity generation and transmission; and

Whereas, customers on fixed- and low-incomes face unique market barriers to obtaining energy efficiency services through the open market, are the least likely to be in a position to exercise meaningful customer choice in any restructured electricity market, and the most likely to be captive customers; and

Whereas, the National Association of Regulatory Utility Commissioners Executive Committee unanimously passed a resolution on July 27, 1995, on the impact of electric industry restructuring on low-income residential customers, and set forth broad policy recommendations to protect low-income customers from the adverse impacts of said restructuring; and

Whereas, to carry out the goal of protecting low-income households, the specific policies articulated below must be implemented; and

Whereas, restructuring of the electric utility industry suggests a radical change in public policy that redistributes benefits and costs; now therefore be it hereby

Resolved that if restructuring shifts responsibility for paying costs onto captive customers, the revenues needed should be collected only with state legislative approval; and be it further

Resolved that in their deliberations over the restructuring of the electric industry, state and federal regulators are urged to adopt the following policies, at a minimum, necessary to protect residential customers on fixed- and low-incomes:

I ) Affordable Access

Any alternative structure must include all of the following:

A. Maintain the obligation of utilities and/or other providers to serve as the provider of last resort for vulnerable customers, such as fixed- and low-income consumers;

B. Enable fixed- and low-income customers to obtain electricity essential to health and safety;

C. Require utilities and/or other providers to provide affordable service to low- or fixed-income customers;

D. Provide comprehensive energy conservation and efficiency grant programs. These must improve the efficiency of energy services for fixed- and low-income customers, address indoor air quality, and make optimum use of the existing network of low-income weatherization providers;

          E. Provide affordable deposit and deferred payment policies; and

F. Prevent mandatory use of service limiters, prepayment cards, or other forms of degraded service.

2) Fair Billing and Collection Procedures

Any alternative industry structure must ensure freedom from abusive and unfair collection procedures and from unfair disconnect practices. It must:

A. Provide adequate notice of proposed termination of services;

B. Provide reasonable payment arrangement options for current and deferred bills;

C. Provide access to customer service representatives who are knowledgeable in the areas of customer assistance, bill assistance, different rate and weatherization programs, energy education, and payment options;

D. Prohibit disconnections that threaten the health and safety of vulnerable customers;

E. Maintain the right to appeal an unfair utility action to an impartial regulator.

3) Participation in Setting Public Policy

Low- and fixed-income customers must be able to participate in collaborative or any other form of decision-making relative to electric industry restructuring issues, with funding for full participation.

4) Environmental Justice

Historically, low income and minority communities have been disproportionately harmed by local generation and transmission siting. Any alternative industry structure must avoid adverse environmental and safety impacts on low-income and minority communities.

5) Long Term Perspective

Any alternative industry structure must provide a balanced portfolio of energy resources that are affordable, sustainable, reliable, environmentally and societally responsible, and economically efficient. Such an alternative industry structure must prevent environmental degradation and maximize employment. Long-term goals must not be sacrificed for a short-term perspective which may reduce rates for some customers while increasing bins for fixed- and low-income customers and exposing them to unacceptable environmental risks.

6) Fair Allocation of Costs and Benefits

A. The costs resulting from past decisions in the electric industry, especially those that built load for industrial customers' demand, must not be borne by the low-income customer.

1. Stranded investments must be borne by providers, industrials, and investors through non-bypassable charges.

2. Stranded cost must be borne by utilities now through rate reductions for all customers without waiting for final resolution of the restructuring issue.

B. All customers, including fixed- and low-income customers, must share in the benefits of a restructured electric industry. Restructuring must not go forward unless bills go down for everyone.


CONSENSUS STATEMENT ON FEDERAL ELECTRICITY MARKETS
RESTRUCTURING LEGISLATION
National Consumer Law Center and National Community Action Foundation
October 29, 1997

FINDINGS:

  • Electricity is a necessity of contemporary life.
  • Basic electricity service must be accessible and affordable for all households, regardless of income or location.
  • Effective competition depends on all customers having choices among suppliers.
  • Many low income customers will need bill assistance and consumer protections to maintain service in a competitive retail market.
  • As the Congress acts to remove federally imposed barriers to supplier/distributor participation in retail markets, it is appropriate that it act to ensure all consumers will share in the benefits of a restructured market.

ESTABLISHMENT OF MINIMUM LEVELS OF STATE RESIDENTIAL CUSTOMER PROTECTIONS
which are required in order to implement PURPA/PUCHA exemption:

  • No discrimination in access to service.
  • State rules assure affordable high quality service available to all. Affordable means the burden of basic electricity service bills, measured as a percentage of household income, shall not exceed twice the same percentage burden borne by median income customers in the state.
  • Protection from dangerous and/or unreasonable disconnection.
  • No unreasonable terms or conditions of service.
  • Uniform and full supplier information disclosure system.
  • Other protections against fraud, market power and collection abuses are also important and should be included in legislation.

ESTABLISHMENT OF AN AFFORDABLE ELECTRICITY SERVICE FUND:

  • To assure reduction of electric bills to affordable levels for households at or below 150% of the poverty threshold or 60% of state median income (see definition above).
  • To provide at least 15% of such funds for investments made through Weatherization Assistance Program and/or LIHEAP subgrantees for the purpose of reducing electricity end usage
  • To provide consumer information through local Community Action and similar agencies to assist low income customers with choices
  • Intervenor funding for low and moderate income residential customers to participate in development and monitoring of state programs.
  • Funded by an access charge on supply entering the interstate grid for delivery in states with retail competition of which a third is set aside for the Affordable Electricity Service Fund for use in programs.

Application of Federal Fair Credit laws, bankruptcy protections, establishment of FERC Consumer Counsel are important safeguards to be addressed in legislation.

 

NEADA REAUTHORIZATION PRINCIPLES
National Energy Assistance Director's Association
February 24,1998

 The Low-Income Home Energy Assistance Program (LIHEAP) is a successful program that has changed over time to adapt to new conditions. It is well suited to meeting the twin challenges of providing energy assistance in an era of welfare reform and utility deregulation. This program provides states with the flexibility to meet their unique situations and provide for innovative solutions to the energy needs of low-income households. The program is working effectively at the state and local level and should not be changed at the federal legislative level, except for the following areas:

The 10 percent ceiling on state administrative expenses should be retained. An exception should be made, however, for the states that receive relatively small grants in order to allow them sufficient funds to operate their programs efficiently (Arizona, Delaware, District of Columbia, Hawaii, Nevada, and Wyoming). For these states, the amount reserved should be set at the greater of $500,000 or 10 percent of their total grant.

REACH (Residential Energy Assistance Challenge Option) is a new activity that was approved in the last program reauthorization and was funded for the first time in FY 1996. The Congress should not increase funding for this activity until the U.S. Department of Health & Human Services has time to complete an evaluation of the projects that are currently being supported. New funding for REACH activities should be directed toward improving program management and used to support activities such as performance goals and meeting Government Performance Results Act (GPRA) requirements.

Federal training and technical assistance funds were reduced by 50 percent in the last reauthorization. The reduction has severely limited the ability of HHS to provide assistance to grantees to facilitate program improvements including meeting the performance goals requirements of GPRA. The level of funding for this activity should be increased to $750,000 to account for program inflation and should only be used to support direct technical assistance to state programs. The allocation of funds should be decided in consultation with NEADA.

In LIHEAP, as in Temporary Assistance for Needy Families (TANF) program, the allowable uses of non-administrative funds should be clarified to include application in-take functions. 

Conclusion:
LIHEAP is an example of a federal program that works. The LIHEAP statute provides states with considerable flexibility in administering the program to deliver services effectively at the lowest possible cost. It is even more important today than it was when it was reauthorized in 1994, because of the changes fostered by electricity restructuring and welfare reform.  LIHEAP has also served as a successful bridge in helping many families through difficult periods, while keeping them off longer term assistance. About half of the states rely on local community action agencies to provide outreach and counseling; others use local government agencies and state welfare offices. The net result is that program services are delivered for about $25 per household, a very inexpensive program to administer. LIHEAP is essential in helping the nation's low-income, disabled, and elderly residents meet their home heating and cooling needs.

Adopted at the NEADA Winter Meeting on February 24, 1998.


RESOLUTION ON UNIVERSAL SERVICE
American Public Power Association
1997

(Note: the following is an excerpt from a longer resolution).

NOW, THEREFORE,. BE IT RESOLVED: That APPA affirms its support for universal service in order that all persons, regardless of economic status, have access to safe, reliable and affordable electricity.

BE IT FURTHER RESOLVED: That APPA believes any electric utility industry restructuring legislation should give state and local governments maximum flexibility to develop and administer programs to ensure universal service and low income protections.

BE IT FURTHER RESOLVED: That APPA will work to ensure that any electric utility industry restructuring proposal:

require all providers of electricity, including non-traditional power providers such as energy service companies, marketers, brokers, aggregators and others share the same obligations and responsibilities as those shouldered by traditional market participants;

provide credit for public benefit programs currently offered by public power systems;

create minimum standards for the financial support for safe, reliable and affordable electricity for low income households;

make clear that public benefit program developed pursuant to electric utility industry restructuring legislation do not supersede or replace existing programs such as LIHEAP and other such federally-appropriated programs designed to enhance and assure universal service."

 

PUBLIC INTEREST BLUEPRINT FOR ELECTRICITY RESTRUCTURING
Public Citizen
July 1996

(Note: The following is an excerpt from the Public Citizen publication Power for the People. To order the full publication, contact Public Citizen; http://www.citizen.org/CMEP/pubs.html.

(To) ensure that benefits (of restructuring) accrue to all classes of consumers, the blueprint proposes that states do the following:

  • grant no recovery of costs for uneconomical utility assets except in special circumstances.
  • break up vertically integrated utility monopolies by requiring divestiture of assets.
  • create an independent energy agency to administer and oversee energy efficiency, low-income, universal service and research & development programs.
  • aggressively promote an array of energy efficiency programs funded by a system benefits charge.
  • guarantee universal service and bill assistance to low-income and rural consumers.
  • increase the use of cleaner energy by requiring all electric service providers to certify that a percentage of their energy comes from renewable technologies.
  • enact standards on fossil fuel plants ensuring that the emissions of hazardous pollutants decreases.

These issues must be addressed prior to the introduction of competition and cannot be solved simply by hoping that the free market will provide equitable solutions. All markets exist within a regulatory and policy framework that encourages certain types of business behavior. If a new utility structure provides the wrong incentives to participants, the outcome could reward wasteful energy consumption, promote the use of dirty generation sources, allow one company to dominate a given market, and make it more difficult for low-income and rural consumers to meet their basic energy needs. State legislatures and regulatory commissions must aggressively engage these issues and devise rules that facilitate competition and serve the public interest.

 

GUIDING PRINCIPLES FOR STATE AND FEDERAL GOVERNMENT AGENCIES
National Conference of State Legislatures
July 1995

In all electric utility regulatory issues involving state and federal governmental agencies, the National Conference of State Legislatures believes that the following should be considered guiding principles:

  • State regulators should be fully consulted regarding the development of federal policy regulating electric utilities.
  • Federal electric utility regulation should be in a manner consistent with state electric utility regulation.
  • Federal preemption of state regulation of electric utilities is wholly inappropriate and unacceptable. The federal government must not set federal standards to govern state electric utility regulation, and it must not dictate retail ratemaking by state commissions. State jurisdiction should not be eroded.
  • Federal action taken to promote or facilitate change in the electric utility industry should be initiated after there has been full and adequate consultation with appropriate state officials.
  • The roles of state regulators and FERC regarding transmission of electricity require careful collaboration of all affected entities so that policies are not at cross-purposes. Federal authority over wholesale pricing and new access must harmonize with state authority over retail pricing, planning and siting.
  • In the process of considering and resolving electric utility regulatory issues in the best interest of the public, federal decisionmakers should recognize the complexity and diversity of the electric utility industry, consumers, and economic and environmental conditions. They should conduct their analysis on a system-by-system basis, and should seek input from all segments of the industry, its customers and regulators (particularly state regulators) and regional reliability councils to ensure reliability of the interconnected electrical system and to ensure that regulatory and legislative decisions will truly benefit electric service customers.
  • The federal government must maintain and increase its commitment to cost effective energy conservation and efficiency while maintaining adequate and reliable energy. Utilities, investors, equipment manufacturers and consumers should be given legislative and regulatory incentives to promote these goals in utility planning, equipment and appliance manufacturing and energy use practices.
  • The determination as to when and how competitive bidding should be employed in the expansion of electric power generation capacity (or to bring on new energy efficiency resources) should remain the prerogative of the states through their regulatory commissions.

 

 

JOINT STATEMENT OF PUBLIC INTEREST PRINCIPLES
ON ELECTRIC INDUSTRY RESTRUCTURING
Minnesota Stakeholders
September 1995

The undersigned parties offer the following joint statement of principles to guide the Minnesota Public Utilities Commission in its investigation of proposals to restructure the electric utility industry in Minnesota. This statement is reflective of discussions held by a diverse group of interested stakeholders in an effort to define the public's interest in any gradual move to greater competition in Minnesota's electric industry. It is our hope that the Commission will insist that the public interest criteria for competition contained in these principles be met in whole before authorizing the implementation of any restructuring plan. Many of the parties to these joint principles will file their own detailed reply comments.

On the subject of electric utility industry restructuring, the listed organizations agree on the following principles:

  • Any proposal to restructure the industry must be considered in accordance with the public interest, and must take effect over an appropriate period to assure a smooth transition.
  • Wholesale competition, involving multiple wholesale power suppliers, should be allowed to take effect first, and its consequences thoroughly evaluated, before the need for retail competition is considered.
  • Universal electric service, through the obligation to serve within assigned service areas at reasonable cost, must be maintained.
  • Recognized stranded costs must be subject to equitable recovery from departing customers.
  • Environmental quality and stewardship of resources must be maintained through an effective integrated resource planning process or similar public process that assures consideration of, but is not limited to, the following:
    • Cost-effective demand-side management programs, and;
    • Portfolio diversity, including cost-effective renewable resources.
  • The existing need and siting review of power supply facilities and transmission lines by state regulatory agencies must be maintained.
  • Restructuring must not degrade safety, reliability, or customer service standards.
  • Public interest objectives, such as shutoff protection for fixed- and low-income consumers, must be met.

 

The Alliance to Protect Electricity Consumers
Statement of Principles
February 12, 1998

(Note: The following is an excerpt from a longer principles document which may be accessed at: http://www.psc.state.wv.us/elecrest/umwcom2.pdf

Universal Service

Deregulated electric power companies and new competitive power suppliers may not be obligated or motivated to serve low income customers or customers that need electricity in inner cities, rural areas, or regions suffering economic trouble. Service quality could deteriorate below acceptable standards.

Not every electricity customer is equally profitable to serve. Not every area costs the same to serve. In a deregulated industry, electricity service sellers that operate solely on a for-profit basis may be allowed to choose freely whom they will serve and the rate they will charge each customer. If they do, they can be expected to segregate customers by geographic area, past credit records and income level, and to sell to the most attractive customers. If they do, what quality of service at what price can people in high-cost, difficult to serve, areas expect? How will people with lower incomes be assured they can afford electric service? Unless these questions are equitably resolved, deregulation will not benefit the whole nation.

Before deregulation is adopted, there must be assurance that:

  • All consumers will have access to reliable, non-interruptible electric service at reasonable, affordable prices.
  • Customers are not left without a power supplier and do not have to endure price-gouging simply because they have no other supplier.
  • Low-income customers are not discriminated against or priced out of the market.

To assure these outcomes, any deregulation plan should:

  • Require all providers of electric distribution service to offer to install facilities needed to connect all customers in their service territories.
  • Require suppliers to offer service to all customers in a specified geographic area, or designate a "supplier of last resort" to provide service at a reasonable price to those consumers without a reasonable choice of suppliers.
  • Prohibit "redlining" or other discrimination against low income consumers.
  • Include a universal service fund to help defray the costs of serving lower income consumers and those consumers in rural or high cost areas.


1998-06

NATIONAL ASSOCIATION OF STATE UTILITY CONSUMER ADVOCATES

R E S O L U T I O N

Supporting the Establishment of a Federal Fund
to Use in Providing Low-Income Assistance


WHEREAS,  electric service is a basic necessity of modern life. Universal electric service therefore must be a key component of our public policy;

WHEREAS, universal electric service, means, at a minimum, access to and availability of firm, reliable power supply, which includes generation, transmission, and distribution services, at affordable rates, to all who desire those services;

WHEREAS, there are Congressional measures introduced which would either permit or require states to offer customers retail electric choice;

WHEREAS, if the electric industry is restructured, the most economically vulnerable customers may be placed at risk because market forces and other factors could cause such customers to no longer receive service or to have their service terminated;

WHEREAS, if low income customers cannot afford their electric bills and are disconnected, they no longer contribute to the fixed cost base of the electric supply and delivery system, and therefore all customers may be harmed; \

WHEREAS, it is in the best interest of all customers and it is good public policy to keep the customers least able to afford electric service on the system by means of appropriate low income assistance programs available for customers who need them;

WHEREAS, currently, programs such as percentage of income or equal payment plans, low income or lifeline rates, LIHEAP and Weatherization help to serve some of this universal electric service goal;

WHEREAS, if the electric utility industry is restructured, lawmakers should assure that programs to implement universal electric service are adequately funded and are in keeping with the competitive framework in order to protect all consumers from harms in a restructured electric market;

WHEREAS, in a competitive market, costs and related charges for low income energy assistance programs must be designed to be recovered from all utility customers and electric service providers or the even broader base of all taxpayers in a non-bypassable and competitively neutral manner;

WHEREAS, the concept of affordable rates may include rate designs and explicit funding mechanisms that permit residential customers to obtain service at rates that they can afford to pay;

WHEREAS, such an approach should allow low-income consumers to obtain adequate services in a competitive market at affordable rates and prices,

WHEREAS, low income assistance is just one part of universal service. Other consumer protections are also necessary;

WHEREAS, the National Association of State Utility Consumer Advocates (NASUCA) has previously supported low income and other universal service programs;

WHEREAS, NASUCA supports the adoption of universal service protections that would include programs for making adequate electric service available at rates and prices which are affordable in any electric restructuring legislation or regulations;

WHEREAS, most states currently have programs designed to protect and/or assist low income customers;

THEREFORE, BE IT RESOLVED, that if federal restructuring legislation is enacted NASUCA supports the establishment of a federal fund to be used to provide low income assistance (such as low income weatherization, bill reduction techniques and education) apart from, and in addition to federal LIHEAP and Weatherization; and,

BE IT FURTHER RESOLVED, that the fund may be augmented by efforts at the state level and that states should have primary control over the programs and the distribution of all such funds;

BE IT FURTHER RESOLVED, that NASUCA authorizes its Executive Committee to develop specific positions and to take appropriate actions consistent with the terms of this resolution. The Executive Committee shall advise the membership of any proposed action prior to taking action if possible. In any event the Executive Committee shall notify the membership of any
action pursuant to this resolution.


Approved by
NASUCA:

Submitted by:
NASUCA Electricity Committee

Place
Seattle, WA

Date
June 10, 1998




State and Local Government Electric Industry
Restructuring Coalition

Statement of Principles

January 1999

 

Consumers in several states are already beginning to choose among competing electricity providers. Moreover, retail access to
competitive electricity suppliers is under serious consideration in many other states. Notwithstanding these efforts, Congress is also considering enacting legislation to overhaul existing laws governing the structure of the electric utility industry. To ensure that consumers benefit and that existing or prospective state restructuring laws are enhanced, not harmed, by any federal actions, the Coalition makes the following recommendations:

  • Any action taken by Congress should enable states to restructure the electric industry but not impose a mandate on states to do so. Should Congress legislate, it must grandfather state actions to establish retail competition. The Coalition opposes any provisions that would establish a date certain for competition or only grandfather state actions temporarily.

  • The safety, reliability, quality, and sustainability of services should be maintained or improved. Structural changes to the industry should not impede compliance with federal environmental laws, including the Clean Air Act.

  • All consumers should have access to adequate, safe, reliable, and efficient energy services at fair and reasonable prices, as a result of competition.

  • All consumers should share the benefits of structural improvements and be protected from anticompetitive behavior, undue discrimination, poor service, market power abuses, and unfair service practices.

  • States should continue to have clear authority to determine costs that are stranded or made unrecoverable by retail competition and to provide for the recovery of those costs, if at all, as the state deems it necessary or appropriate.

  • State and local governments must maintain their authority governing rights-of-ways, franchises, zoning or revenues.

  • Actions which facilitate local, regional, or state-wide aggregation must not be precluded.

  • States should maintain the authority to require public benefits programs on a nondiscriminatory basis, including those that support reliable and universal service, energy efficiency, renewable technologies, research and development, and low-income assistance. Existing federally-sponsored public benefits programs should be maintained in a restructured market.

  • States should maintain the authority to establish or require comprehensive consumer education and outreach programs to minimize public confusion and provide information so consumers are able to make informed choices and participate effectively in a restructured market.

  • The U.S. Department of the Treasury should promptly take administrative action to permanently preserve the tax-exempt status of existing debt associated with the transmission systems of public power utilities that choose to participate in Independent System Operators.

The State and Local Restructuring Coalition is comprised of the National Conference of State Legislatures, National Governors' Association, The Council of State Governments, National Association of Counties, National League of Cities, National Association of Towns and Townships, National Association of State Energy Officials, National Association of Regulatory Utility Commissioners, National Association of State Utility Consumer Advocates, Association of State Energy Research and Technology Transfer Institutions, and the National Energy Assistance Directors' Association.


The Virginia Residential Electric Consumer

Bill of Rights

July 1998

Supported by:
American Association of Retired Persons
Association of Energy Conservation Professionals
Southern Environmental Law Center
Virginia Citizens consumer Council
Virginia Poverty Law Center
VMH, Inc.



Virginia residential electric customers must benefit from any changes in the structure and regulation of the electric industry. We support the following eight principles:

Benefits for residential customers.

  • The safety, reliability and affordability of electric service to residential consumers should be improved by any changes in the electric industry. Lower rates for reliable service should be the goal, not restructuring or competition. Residential customers, who are the least attractive customers for power marketers, need easy formation of aggregators to act as purchasing agents for groups of small customers.

Effective competition first.

  • Competition must be effective before protections are lifted or electricity generation is deregulated. The State Corporation Commission must have authority to order divestiture of electric generation plants to achieve a competitive market for generation prior to deregulation. Regulators must guard against abuses of market power and must enforce anti-trust laws.

Universal service and affordable rates.

  • Rates must be just and reasonable and affordable for all residential customers. A lifeline program funded by a competitively neutral mechanism should provide a basic level of service to low-income consumers. Residential customers must not pay more than their fair share of service costs.

Safe and reliable electric service.

  • The safety and reliability of the transmission and distribution systems and a firm, uninterruptable supply of power must be ensured. All sellers must be licensed and bonded to protect their customers. All service providers should be required to meet service quality standards. Independent System Operators (ISO) and Regional Power Exchanges (RPX) established to run a competitive generation market must be truly independent.

Consumer protection against fraud and unfair practices.

  • Laws against unfair and deceptive advertising, marketing and business practices must be enacted and enforced. Consumer complaint resolution services, protections against unauthorized switching of electric service, and protections against misuse of customer information must be provided. [Incorporated into restructuring legislation, SB 1269] Rules governing billing and collection, disconnects and reconnections, and easy customer access to entities are needed.

Environmental impact, conservation and energy efficiency programs.

  • Electric generation mix and emissions disclosures are necessary for consumers to shop for environmentally sound providers. Restructuring of the generation market should not result in environmental degradation. Investments in energy efficiency and renewable energy resources must be increased.

Stranded costs/benefit/mitigation of costs.

  • Utilities have no right to recover inefficient costs or costs resulting from strategic actions or company mistakes. Utilities are not entitled to compensation for risks for which they have been previously compensated. New revenue opportunities must be taken into account. Electric companies must reduce costs that may be uneconomic in a competitive market (mitigation). We oppose securitization of stranded cost. Collection of stranded cost from industrial, commercial and residential customers must be equitable.

Consumer information and education.

  • Consumers, who have no experience of "shopping" for electricity, must be educated and provided reliable unbiased information. Price and quality information that is understandable and useful to consumers must be provided for comparison-shopping. Standardized billing and marketing information is needed, such as per kilowatt-hour price, contract terms and conditions.

Page Last Updated: January 26, 2007

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