20090202order_no_30724.pdf

Offce of the Secretar
Service Date
February 2, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE
COMMISSION'S INQUIRY ABOUT
ENERGY AFFORDABILITY ISSUES AND
WORKSHOPS.
)
) CASE NO. GNR-U-08-01
)
) ORDER NO. 30724
)
On September 29, 2008, the Idaho Public Utilties Commission initiated Case No.
GNR-U-08-01 to provide a foru for the exploration of issues related to the affordabilty of
energy in Idaho. The Commission noted that rising energy costs were affecting utilties and their
customers. Order No. 30644. A varety of factors are contributing to significant upward
pressure on electric and natual gas rates in Idaho. In addition, Idaho citizens are facing broader
economic challenges. As a result, energy affordability has become a central issue for many
Idaho households and businesses.
Two public workshops, open to any and all paries, were conducted by Commission
Staff at the Commission offce on October 14 and October 22, 2008. The purpose of the
workshops was to identify issues and discuss solutions pertaining to energy affordabilty and
customers' abilty to pay energy bils. Staff submitted comments on November 26, 2008.
Numerous responsive comments were received. A broad spectru of interests and views were
represented. Staff submitted its Final Report to the Commission on Januar 16,2009.
The Final Report not only highlights the topics discussed at the workshops, but also
represents the differing perspectives of the workshop paricipants. Staffs final recommendations
were made after consideration of all perspectives. A copy of the entire Final Report can be
obtained from the Commission office during regular business hours or through the Commission's
website at ww.puc.idaho.gov by clicking on "File Room," then "Multi-Utility Cases," then
"GNR-U-08-01," and finally "Final Report."
The Commission would like to express its appreciation for all of the ideas and
information submitted. All paricipants offered insightful suggestions and beneficial information
without which the workshops could not have been successfuL. It is the Commission's desire that
the dialogue begun by the affordability workshops continue as all paries work together in
removing the bariers to affordable energy in Idaho.
ORDER NO. 30724 1
FINDINGS AND CONCLUSIONS
Bill Payment Assistance
The Low-Income Home Energy Assistance Program (LIHEAP) provides low-income
customers with financial assistace designed to pay utilty bils associated with the customer's
primar heating source. Applicants must meet income criteria based on Federal Povert
Guidelines. Last year 101,000 Idaho households qualified for LIHEAP benefits. LIHEAP's
2007/2008 energy assistace fuding amount of $9,410,895 was able to provide benefits for
32,843 of the 101,000 eligible households. Based on an average benefit amount of $286 per
household, an additional $19,492,902 would have been needed to cover all of Idaho's eligible
households.
LIHEAP fuds can be increased through a process called "leveraging." Essentially,
the federal governent withholds a percentage of LIHEAP money allocated to each state as an
incentive for that state to first acquire non-federal fuds for assistance to low-income
households. Grants are awarded to states that use their own or other non-federal governent
resources or private funding to increase the total amount of assistance available, thereby
leveraging federal fuding.
In both Oregon and Washington, Avista offers a Low-Income Rate Assistance
Program (LIRAP) intended to serve as an additional resource for financial assistance to low-
income customers. A vista provides the collected LIRAP revenue to community action agencies
which administer the program in a similar maner to LIHEAP fund administration. Ultimately,
LIRAP allows more people to obtain the financial assistance needed to pay their energy bils.
Because Idaho Code § 61-315 prevents a public utilty from granting "any preference or
advantage to any corporation or person or subject any corporation or person to any prejudice or
disadvantage," implementation of a LIRAP-type program in Idaho would likely require
legislation.
The Commission supports legislation that would allow utilities to propose for
Commission consideration programs, policies, and rates for the benefit of low-income residential
customers. The legislation should allow the utilties flexibility in the programs to be proposed,
recognizing that each utilty has differing circumstances and unique service areas. Details
regarding the appropriate rate mechanism to support such programs can be discussed through
future cases as they come before the Commission. The proposal of such programs should be
ORDER NO. 30724 2
voluntary on the par of the utilty. Th~ Commission urges all utilities to support such
legislation, even if some do not intend to propose programs.
Data and other information regarding LIHEAP leveraging must be conveyed so that
the fuding for Idaho citizens can be maximized. The Commission encourages increased
awareness of the LIHEAP leveraging process. Furher, the Commission is fully supportive of
any additional efforts made by the utilties to increase awareness of, and thereby contributions to,
non-profit fuel fuds.
Finally, although consideration of programs funded by state tax revenue may not be
practical at this time, the Commission believes that this source of revenue should be considered
in the future if the number of Idahoans who require assistance grows larger.
Bill Reduction
Greater energy effciency is the key to bil reduction. Weatherization and
conservation are crucial elements of energy efficiency efforts. Education and funding regarding
weatherization and conservation can be administered in conjunction with LIHEAP and LIRAP-
type programs. As evidenced by recent cases, the Commission supports energy efficiency
education and fuding. Case Nos. AVU-E/G-08-01, PAC-E-08-0L.
Programs regarding weatherization should include not only single-family residential
homes, but also multi-family, manufactured, and rental housing. The latter properties present
unique obstacles that are often overlooked. In conjunction with better weatherization of existing
homes, the Commission supports and invites the energy utilties to advocate for the adoption and
implementation of greater energy effcient standards for new constrction.
Appliance manufactuers are continually improving their products' effciency.
Several utilties offer a plethora of rebates for switching to higher-efficiency appliances.
Unfortunately, upgrading an appliance is a luxur that low-income customers canot generally
afford. The Commission encourages the utilties to work with local lenders to provide
opportities for customers to move to higher-efficiency appliances.
The Commission has, and wil continue to support, consideration of tiered rates as a
means to encourage greater energy efficiency and conservation. Consistent with Stafs
recommendation, the Commission believes that tiered rate designs are most appropriately
addressed through future filings of individual utilties.
ORDER NO. 30724 3
Bill Mitigation
Utilties' credit and collection policies have a direct impact on customers' abilty to
pay. Determining how and when customers must pay, the conditions under which charges
associated with payment or non-payment are assessed, and requirements for obtaining or
retaining service are all critical components of credit and collection policies. Finding ways to
make it easier for customers to obtain service or avoid disconnection is an important component
of customer-oriented credit and collection policies.
While the Commission does not support percentage-of-income payment plans, we do
believe that both the customer and utilty are best served when payment arangements are
flexible and based on the customer's unique circumstances and ability to pay. Flexibility by the
utilty should not be mistaen for abandonment of debt. The Commission endorses the utilty's
right to collect on an outstanding energy bil from the customer who incurred the debt. In this
regard, flexible payment arangements are more likely to be met because they are based on the
customer's actual abilty to pay instead of the customer's ability to fit into a pre-determined plan.
For a customer who fits within certain criteria, a utilty may require a deposit before
commencing service. All paricipating utilties except for Idaho Power have a deposit mechanism
that they believe is effective. The Commission encourages each utilty to periodically evaluate
whether the administrative costs associated with the collection and management of deposits are
justified by the success of the deposit program. The Commission welcomes and accepts Avista's
offer to conduct a study to determine the effectiveness of deposits.
Case Management
The objective of good case management is personalized customer assistance. Ideally,
case managers would identify both utilty and non-utilty programs and resources to help
improve the customer's abilty to manage finances, meet obligations, and pay energy bils.
The Commission congratulates A vista on what appears to be a very successful case
management program. We are also encouraged and optimistic about Intermountain Gas's efforts
to implement a case management program. While the Commission encourages the utilties to be
flexible in responding to their customers' needs, we decline to mandate the use of a formalized
case management system. Each utility has unique customers, programs, and corporate
objectives. An effective case management program canot be developed through a "one size fits
all" approach.
ORDER NO. 30724 4
Once again, the Commission appreciates the enthusiasm with which the paries
paricipated in workshop discussions. We encourage Staff and any interested persons or paries
to paricipate in ongoing discussions and arange fuher meetings as needed to continue to
address energy affordability issues in Idaho.
ORDER
IT IS HEREBY ORDERED that the matter of the Commission's inquiry about
Energy Affordabilty Issues and Workshops be closed.
DONE by Order of the Idaho Public Utilties Commission at Boise, Idaho this 3Q+t
day of Januar 2009.
~A~A~DFO , P UDENT
~¡f~
MARSHA H. SMITH, COMMISSIONER
/
ATTEST:
tê&~J D. JeweH
Co mission Secretar
O:GNR-U-08-01_ks4
ORDER NO. 30724 5