Proposals Would Take Money From Utility Assistance for Low-Income Families

The Center for Public Policy Priorities opposes SJR 55 and SB 1655, which would take money dedicated to utility-bill assistance for low-income families and instead give it to electricity consumers, including large industrial customers.

The money in question is in the System Benefit Fund, created by the 1999 Legislature as part of electric utility market deregulation. The fund’s revenue comes from a monthly utility fee collected in deregulated areas. System Benefit Fund revenue can be used for the Low-Income Discount program administered by the Public Utility Commission, which provides one in six households in deregulated markets with help in paying unaffordable electric bills. Unfortunately, the legislature started cutting the program in 2003 to reduce the discount and the number of people eligible, reducing the cost of the program. These cuts allowed unspent System Benefit Fund revenue to accumulate and to help balance the budget, because the SBF balances are available for “certification” by the state comptroller.

SJR 55 and SB 1655 propose to give the accumulated money back to electric providers in deregulated areas so that it can be credited to customers’ accounts over 20 months. The Houston Chronicle reports that the average residential customer would get a credit of $2.60 a month, while the largest industrial customers’ credit would average $160,000 a month. The state discount program would be eliminated and would no longer help low-income families pay their electric bills.

Biennial revenue to the System Benefit Fund about $300 million. Biennial spending on the program is about $150 million in 2012-13, enough to provide a 10 percent discount from May to September. If the program provided the statutory-maximum 20-percent discount, the SBF balance ($851 million by the end of fiscal 2013) is enough to keep the discount going for five years without collecting the fee. Other legislative proposals would allow SBF revenue to help low-income people weatherize their homes thus reducing their utility bills.

There is no reason to take money dedicated to help low-income families and give it to ratepayers, many of whom are large commercial users.

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