20081218Comments.pdf

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VIA HA DELIVERY
December 19,2008
Ms. Jean Jewell
Commssion Secreta
Idaho Public Utilities Commission
472 W. Washington St.
Boise,ID 83702
Re: Case No. GNR-U-08-1- In the Matter of the Commission's Inquiry About Energy
Affordability Issues and Workshops.
Dear Ms. Jewell:
Enclosed, you will find an original and seven (7) copies of AA' s comments in
response to the Notice of Public Workshops and Notice of Scheduling issued in Order No.
30644. Please fi1e stap one copy for our records.
Please contact me at 208-855-4001 if you have any questions.
Sincerely,~~~
James Wordelman
State Director
HEALTH / FINANCES / CONNECTING / GIVING / ENJOYING
Jennie Chin Hansen, President
William D. Novelli, Chief Executive Officer
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Commissioners)
Inquiry About Energy Affordability )Issues and Workshops )Case No. GNR-U-08-1
COMMENTS IN RESPONSE TO COMMISSION ORDER No. 30644
BY
Barbara R. Alexander
Consumer Affairs Consultant
ON BEHALF OF
AARP
December 19,2008
JAMES WORD ELMAN
STATE DIRCTOR
AARPIDAHO
3080 E. GENTRY WAY
SUITE 100
MERIDIAN, ID 83642
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S )INQUIRY ABOUT ENERGY )
AFFORDABILITY ISSUES )AND WORKHOPS )
CASE NO. GNR-U-08-1
COMMENTS OF AARP
COMES NOW AARP and submits the following comments in response to the
Notice of Public Workshops and Notice of Scheduling issued in Order No. 30644.
INTRODUCTION
AARP applauds the Commission for tackling the issue of energy affordability. There is
no question but that the combination of the steady increases in energy prices combined
with the state of the economy is putting an unbearable strain on household budgets.
This is especially tre for lower income households, and those on fixed incomes which of
course include many senors.
A recently released surey conducted by the National Association of Regulatory Utility
Commissioners (NARUC) documents the increasing number of accounts in arears and
service disconnections of service due to customers having trouble keeping up with rising
bils. The report shows that in Idaho over 40,000 accounts were terminated as of May,
2008 and 19% of electrc accounts, 12% of gas accounts, and 14% of accounts at
combined electrc/gas utilities were in arears. The report also shows a steady upward
trend in both arearages and disconnections since 2001. These figures are soberng.
Whle disconnection of serce is devastating for all, it can tu tragic, especially for
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older people, those with disabilities or medical conditions and young children, all of
whom need access to adequate heating and cooling.
Staff has done an excellent job describing the serous economic challenges facing Idaho
and the state's lower income and fixed income population in paricular. Ths proceeding
has provided the opportnity to examine the status quo in Idaho, and compare Idaho to
other states. What we found is that the curent programs are not nearly sufficient to
address the needs oflow and fixed income households in the state. In terms oflow-
income assistance, Idaho is behind other states, including neighboring states, and states
that are also sered by the some of the same utilities serng Idaho.
Clearly there is a need and the time to act is now. Despite the recent drop in fuel prices,
energy prices are on a generally upward trenø. High energy prices, the weak economy
and increasing unemployment create a burden for too many Idahoans, including those
who do not qualify as "low-income". The commission staff has made several
recommendations which AA supports. However, few of the recommendations wil
result in sure, immediate relief. We are disappointed that Staff chose not to address
several options because utilities have indicated they would oppose them. For other
options, Staffhas suggested fuher study or legislative action. For several options, the
staff encourages the utilities to take action, but there is no accountability or follow up to
determine ifthe suggestions have been followed. For example, the Staff
recommendations do not require the utilities to report on their activities. The result is
there is little to point to as concrete next steps.
AARP urges the Commission to take specific steps to improve energy affordability in
Idaho, both in the context oflow-income assistance and with regard to its overall duty to
set rates and adopt policies that are in the public interest. Others who do not qualify as
"low income" need assistance as welL. In summar, AARP recommends:
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. The Commission should send a clear and strong message to the Legislatue that
Idaho's law should be amended to remove any actual or perceived barers to
implementation of payment assistance for low income households.
. For those issues where Staff suggests further discussion or investigation is
needed, the curent workshop process should be continued so that all interested
stakeholders are invited to paricipate in those discussions.
. For those activities where the Staff "encourages" utilities to take a paricular
action, the Commission should ask for reports to deterine what the utilities have
done, who has been sered, etc. Without accountability the suggestions are
meaningless.
. Review all regulations and policies with the eye to make changes that decrease
costs or bils. The Commission should consider the affordability impact of all of
its decisions.
COMMENTS ON STAFF RECOMMENDATIONS ON PROPOSALS TO
ADDRESS ENERGY AFFORDABILITY
Bil Payment Assistance
Implement Utilty Programs Designed to Provide Financial Assistance: Staff
recommends that a program such as LIRA would be beneficial for Idaho's low income
utility customers. However, staff believes that implementing a LIRP would likely
require legislation to change Idaho Code Sec. 61-315.
AA Comment: AAR strongly supports the adoption of a bil payment assistance
program for Idaho. AARP recommends the Commission send a clear message to the
Legislature that such legislation is necessar and should be adopted. Many states have
payment assistance programs for low income customers, including rate reductions.
These programs have been found to reduce the number of collections actions and
terminations, and to help customers pay down arearages. For these reasons, utilities
often support such programs. For example, SB 22 passed in Colorado in 2007 with
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support from a variety of stakeholder including AARP, Energy Outreach Colorado and
all of the major electrc and gas utilities. The new law states:
(d) (I) NOTWITSTANDING AN PROVISION OF ARTICLES 1 TO 7 OF
THIS TITLE TO TH CONTRAY, THE COMMISSION MAY APPROVE AN
RATE, CHARGE, SERVICE, CLASSIFICATION, OR FACILIT OF A GAS OR
ELECTRIC UTILIT THT MAS OR GRATS A REASONABLE
PREFERENCE OR ADVANTAGE TO LOW-INCOME CUSTOMERS, AND THE
IMPLEMENTATION OF SUCH COMMISSION-APPROVED RATE, CHAGE,
SERVICE, CLASSIFICATION, OR FACILITY BY A PUBLIC UTILIT SHALL
NOT BE DEEMED TO SUBJECT ANY PERSON OR CORPORATION TO AN
PREJUICE, DISADVANTAGE, OR UNUE DISCRIMINATION.
(II) As USED IN THIS PARGRAH (d), A "LOW-INCOME UTILITY
CUSTOMER" MEANS A UTILITY CUSTOMER WHO:
(A) HAS A HOUSEHOLD INCOME AT OR BELOW ONE HUDRED
EIGHTY -FIVE PERCENT OF THE CURRNT FEDERAL POVERTY LEVEL;
AN
(B) OTHERWISE MEETS THE ELIGIBILITY CRITERI SET FORTH IN
RULES OF THE DEPARTMENT OF HUMA SERVICES ADOPTED
PURSUANT TO SECTION 40-8.5-105.
(III) WHEN CONSIDERIG WHETHER TO APPROVE A RATE THAT
MAKS OR GRATS A REASONABLE PREFERENCE OR ADVANTAGE TO
LOW-INCOME UTILITY CUSTOMERS, THE COMMISSION SHALL TAKE
INTO ACCOUNT THE POTENTIAL IMPACT ON, AND COST-SHIFING TO,
UTILITY CUSTOMERS OTHER THAN LOW-INCOME UTILITY
CUSTOMERS.
Increase Customer Awareness of/Encourage Voluntary Contributions to Nonprofit Fuel
Funds: Staffs recommendation is to encourage utilities to increase awareness of and
fuding for nonprofit fuel funds.
AAP Comment: AAR agrees that while fuel funds meet only a small portion of the
need, they are necessary to help address energy affordability. It is unclear whether the
curent economic situation may result in fewer donations to such fuds, or motivate more
people to lend a helping hand. Nonetheless, AARP recommends that the Commission
should also increase awareness of these fuel fuds through an anual news release prior
to the winter heating season. A release from the Commission could be expected to result
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in television, radio and newspaper stories that would furter increase awareness of the
funds to members of the public who would donate and those who may need assistance.
Increase Federal Funding for UHEAP: Staff recommends initiating a dialogue with
Idaho's Congressional delegation regarding the critical need for additional program
funding. Staff also recommends that the utilities, Commission and other interested paries
parer with CAPAI to identify ways to further leverage LIHEAP fuding. '
AA Comment: AAR agrees with Staff's recommendation. Additional workshops
should be held with the paricipants in this docket to address the leveraging of LIHEAP
fuds.
Create a State-Funded Financial Assistance Program: Staff does not recommend a state
funded program at this time, due to the projected state deficit.
AARP Comment: AA agrees it would be diffcult for the state to fud a new
program given the curent state budget projections. However, this is an option that should
be explored in the future.
Bil Reduction
Reduced Rates for Low-Income Customers: Staff does not recommend the adoption of
reduced rates for low-income customers, stating that there are other, preferable options
for the Commission to consider and noting that the utilities do not support low-income
rates and prefer increased awareness and fuding of energy efficiency to reduce costs.
AARP Comment: AARP supports reduced rates for low income customers. Such rate
programs have been adopted in other states and have been successfully implemented by
utilities. In fact, utilities serng Idaho offer reduced rates, including PacifiCorp in
California and Washington (these programs are described in the staff report). The
Lifeline telephone discount provides a reduced monthly rate for basic telephone servce
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for eligible low income customers. Furher, while increased awareness and fuding of
energy inefficiency is a necessary component of affordability, it is not suffcient alone.
Rate assistance is also essential for the lowest income customers to close the "energy
affordability gap". Finally, it is inappropriate for Staffto limit an option for affordability
because the utilities do not support it (not to mention that it is incredulous for utilities to
oppose rate discounts in Idaho when they offer them in other states). Commission Staff
should judge policies and proposals in ters of whether they achieve the goal of this
workshop, that is, increasing energy affordability.
An argument raised durng the workshops was that other customers or non-residential
customer classes should not experience rate increases in order to fund a discount.
However, all customers benefit when arearages and collections costs are reduced
because lower income households can better afford their bils. Spreading the cost of a
low income rate across all customers is the same as Idaho Power seeking Commission
approval to socialize the cost of a program that wil give bil credits to irrgators who
agree to cut usage during peak perods. Idaho Power argues that all customers benefit
when irrgators are paid to reduce usage.
Low-income Weatherization. Conservation Education. and Other Energy Effciency
Programs: Staff recommends additional fuding for weatherzation and energy
conseration education in future rate cases. Staff recommends the utilities develop energy
conservation education targeted to low-income customers. Staff further recommends the
utilities examine their incentive programs regarding appliances, and encourage the
Northwest Energy Efficiency Alliance to include multi-family and manufactued homes
in the Energy Star Home Program. Staff also encourages utilities to actively advocate for
adoption of energy efficient constrction standards, including for mutl-family and
manufactured homes.
AARP Comment: AARP agrees that energy effciency should make energy more
affordable by helping consumers to lower both usage and bils and that these programs
should be made more available. However, the Commission should ensure that funding
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for energy efficiency programs is cost effective. Customers should see lower bills if they
engage in energy efficiency and lower usage. Therefore it is important for the
Commission to ensure that energy effciency money is wisely spent and if awarded,
utility bonuses and incentives should be directly tied to success in achieving energy
efficiency goals in a cost effective maner.
AARP recommends the Commission specifically direct utilities to take the actions
outlined in this Staff recommendation and further, that the utilities should peodically
report on their progress to paricipants in this proceeding.
Design Rates to Encourage Energy E(fciency: Staff recommends the utilities and the
Commission consider tiered rates for residential customers in the context of future rate
cases.
AA Comment: AA supports tiered rate strcture, also called an "inclining block"
rate, provided the first tier of usage is priced affordably and contains sufficient usage to
meet basic needs.
Bil Mitigation:
Offr Plans that Allow Payment o(Arrears Over an Extended Length o(Time: Staff
recommends that utilities offer more flexibility in negotiating payment arangements.
Staff fuher recommends that the staff and utilities further investigate payment
arangement alternatives.
AARP Comment: AARP supports providing greater flexibility in payment
arangements alternatives. AA recommends the Commission also request the utilities
to report on payment arrangements currently offered, the number of customers on each
type of plan, and the success of the payment plans. Furer, investigation of payment
arangements should not be limited to utilities and staff. Advocates including CAPAI and
ICAN have direct experence with payment troubled customers and have insight into the
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types of plans that are most successfuL. These groups should be included in any future
discussion of payment plans.
Offer Percentage of Income Payment Plan: Staff does not recommend a percentage of
income payment plan.
AARP Comment: AARP support Percentage of Income Payment Plans (PIPP). Several
states have implemented these plans, which enance affordability by capping payments
for low income customers at a certain percentage of their income. Such programs have
been implemented by utilities in several states, including Ohio and New Jersey.
Reduction of Customer Costs
Reduce/Eliminate Payment Charges and Educate Customers on No Cost/Low Cost
Options: Staff recommends more investigation and discussion among all interested
paries regarding how convenience fees can be eliminated or reduced.
AARP Comment: AARP agrees and recommends the topic be included in ongoing
dialogue among the paricipants in this proceeding.
Reduce or Eliminate Reconnection Charges and Interest Assessed on Late Payments:
Staff recommends more investigation and discussion among all interested paries
regarding the circumstance under which reconnection and interest charges could be
eliminated.
AAP Comment: AARP agrees and recommends the topic be included in ongoing
dialogue among the paricipants in this proceeding.
Remove Barriers to Obtaining or Retaining Service
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Modifj Deposit Policies: Staff recommends fuher discussion of alternatives to existing
deposit polices, including an increase in installment payment plan timelines. Staff also
recommends that one or more of the utilities conduct a study of the effectiveness of
collecting deposits.
AARP Comment: AARP agrees and recommends the topic be included in ongoing
dialogue among the paricipants in ths proceeding. Utilities should be encouraged to
voluntarly modify deposit requirements and to report to the Commission on their
offerings.
Allow Installment Payments on Prior Bils: Staff recommends that utilities adopt new
policies whereby lower risk applicants be peritted to payoff old bils in installments
while receiving new serice.
AARP Comment: AAR agrees that installment payments would be an effective means
of allowing customers to catch up on past due bils and maintain service. However,
AARP suggests that the Commission and interested paries should be involved in
development of such plans. For example, the ter "lower risk" could be applied
differently across utilities if there is no guidance from the Commission. AARP
recommends the topic be included in ongoing dialogue among the paricipants in this
proceeding. In the short term, utilities should be encouraged to voluntarly offer these
plans and to report to the Commission on their offerngs.
Other Arrearage Forgiveness Plans: Staff recommends that all energy utilities develop
arearage forgiveness plans.
AARP Comment: AARP agrees that arrearage forgiveness plans would be an effective
means of allowing customers to get out from under past due bils and maintain service.
However, AA suggests that the Commission and interested paries should be involved
in development of such plans. AA recommends the topic be included in ongoing
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dialogue among the participants in this proceeding. In the short ter, utilities should be
encouraged to voluntarly offer arearage forgiveness and to report to the Commission on
their offerings.
Offer Case Management
Staff recommends that all utilities implement case management programs if they have not
already done so.
AARP Comment: AARP agrees utilities should implement case management programs.
We recommend the Commission request utilities to report on whether they curently have
case management programs or when they do implement such programs.
Affordabilty Should Be Considered in All Decisions
AARP supports the Commission in addressing energy affordability for low-income
households, many of whom are seniors on fixed incomes. However, we urge the
Commission not to assume that affordability ends with low income assistance. Literally
all of the Commission's actions impact energy affordability. These include not only rate
cases, but other decisions that add new fees and charges to bils such as installation of
advanced meters, and demand side management programs. AARP recommends that the
Commission should consider the affordability impact of all of its decisions.
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