Faced with mounting criticism over high energy costs, Gov. Kathy Hochul and lawmakers two years ago ordered state utility regulators to expand the bill discount program for low-income customers to more New York residents.<\/p>\n
Now the state Public Service Commission has done that. In a unanimous vote last week, the PSC loosened the income restrictions on who qualifies for reduced monthly bills. It adds as many as 1.6 million new households to the discount program.<\/p>\n
\u201cThe Public Service Commission heeded Governor Hochul\u2019s call to make energy utilities more affordable by expanding the eligibility for utility bill discounts to all households with income below the state median income,\u2019\u2019 said James Denn, speaking for the commission. <\/p>\n
But the PSC\u2019s move won\u2019t do much to hold down rising energy costs, critics say. <\/p>\n
Hochul and the legislature did not provide any state funding to pay for the new subsidies. So the extra money will come from \u2013 ahem \u2013 utility ratepayers.<\/p>\n
Even the most ardent supporters of energy affordability programs say that, without state funding, expanding the discount program will simply raise electric and gas rates for everyone else, including struggling households. <\/p>\n
\u201cWe just can\u2019t keep relying on ratepayers as an ATM machine in New York,\u2019\u2019 said Joseph Stelling, senior associate state director of AARP New York.<\/p>\n
For eight years<\/a>, major New York utility companies like National Grid have been required to offer \u201cenergy affordability programs,\u201d or EAPs, that provide bill discounts to low-income customers who earn 60% or less of the statewide median income.<\/p>\n But the utilities have only managed to enroll about 40% of eligible customers in those programs, according to PSC data.<\/p>\n The new PSC order expands eligibility for bill discounts to any household earning less than the median income, which is about $80,000.<\/p>\n In written comments criticizing the expanded program, AARP officials said the commission should focus on enrolling the remaining 60% of low-income customers in the existing program. <\/p>\n Otherwise those customers could end up paying higher rates to subsidize new participants who earn more money than they do. <\/p>\n \u201cIn this era of rapidly rising delivery rates, approving new programs that require one group of ratepayers to subsidize another group of ratepayers is not consistent with the commission\u2019s statutory obligation to ensure that rates are just and reasonable,\u2019\u2019 wrote Beth Finkel, state director.<\/p>\n Consumer groups say Hochul is right to focus on affordability<\/a>. Despite the EAP programs, utilities this summer are terminating thousands of customers for non-payment. <\/p>\n National Grid shut off more than 11,500 of its Upstate residential customers for non-payment in June and sent final termination notices to another 55,500. More than 225,000 customers are at least two months late paying their bills, owing an average of $1,600 each. That\u2019s more than one customer out of every seven.<\/p>\n Meanwhile, utility rates are rising faster than at any time in recent memory. <\/p>\n Next month, the PSC is expected to vote on new rates for National Grid<\/a> that will immediately boost the average household bill $22 a month for electric and gas, with further increases next year and the year after. Two years from now, monthly bills will have risen 20% for electricity and 27% for gas.<\/p>\n Part of the reason rates are going up is to pay for EAP discounts<\/a>.<\/p>\n National Grid\u2019s planned rate increase would give the utility $1.7 billion more revenue over the coming three years. Of that, $210 million \u2013 or 12% \u2013 would be added to the EAP program to hold down bills for low-income customers.<\/p>\n The added cost of the new expanded EAP program will depend on how many people sign up, but it is not expected to exceed $145 million statewide, PSC staff estimated. Each utility can spend only one-fifth as much money on the new discounts as they spend on existing low-income EAP discounts.<\/p>\n The expanded program will open in about six months. Between now and then, utilities will figure out how best to verify incomes.<\/p>\n If current projections hold, the new program won\u2019t help much. <\/p>\n National Grid customers who make 80% to 100% of the state median income could expect a bill credit of $2 a month, assuming they use both electricity and gas, PSC staffers calculated. Those making 60% to 80% would receive $6. Customers below 60% of median income (the level that qualifies for existing EAP discounts) would get $13 a month.<\/p>\n The state\u2019s goal is to keep utility bills no higher than 6% of household income. Subsidies for each tier of customers are based on calculations of what it would take to keep costs within that limit, PSC officials said.<\/p>\n Two years ago, Hochul pushed the legislature during budget negotiations to provide bill relief to utility customers. <\/p>\n At her request, lawmakers appropriated $200 million<\/a> in the 2023-2024 budget for one-time bill discounts to all customers, regardless of income. The same budget legislation directed the PSC to work up a permanent program to benefit all customers whose incomes are below the state median.<\/p>\n Two years later, that new program has been approved. But consumer advocates say it is critical for the state to find a funding mechanism other than utility rates to pay for it.<\/p>\n \u201cWe have to work collectively to see it funded, not just by ratepayers but hopefully by the state chipping in as well,\u2019\u2019 said Laurie Wheelock, executive director of Public Utility Law Project, an advocacy group for low-income utility customers.<\/p>\n Hochul\u2019s office was noncommittal, saying only that she remains focused on lowering the cost of energy.<\/p>\n \u201cThe governor has made affordability a top priority,\u2019\u2019 spokesman Ken Lovett said. \u201cShe will soon turn (her) focus to putting together her (next) executive budget plan.\u201d<\/p>\n In the long run, Wheelock said, bill discounts alone won\u2019t solve the problem. State officials are going to have to find ways to tamp down the ever-rising costs of utility service.<\/p>\n \u201cWhile energy affordability programs are extremely important, we have to do the hard work of actually cutting costs for ratepayers long term,\u2019\u2019 she said.<\/p>\n Staff writer Tim Knauss can be reached at:email<\/a>|Twitter<\/a>| 315-470-3023.<\/p>\n If you purchase a product or register for an account through a link on our site, we may receive compensation. By using this site, you consent to our User Agreement<\/a> and agree that your clicks, interactions, and personal information may be collected, recorded, and\/or stored by us and social media and other third-party partners in accordance with our Privacy Policy.<\/a><\/p>\n