Written on: June 3, 2015
Nearly a quarter billion dollars in electricity rate discounts will continue flowing to more than 500,000 low-income Texans under crucial consumer legislation adopted in Austin.
The legislation, House Bill 1101, also strikes a blow for governmental accountability. Without HB 1101 or related legislation, money specifically collected from Texans for the rate discounts likely would be diverted to an unrelated purpose.
The Texas Coalition for Affordable Power, an organization that strongly advocated for the adoption of House Bill 1101, called for Gov. Greg Abbott to sign the legislation. He did so June 17th. House Bill 1101 was authored by outgoing state Rep. Sylvester Turner, a longtime advocate for energy consumers and low-income Texans.
“This is hands down this legislative session’s most important bill for Texas electricity consumers,” said TCAP policy analyst R.A. Dyer. “We want to thank Rep. Turner for his leadership on this issue and we want to thank Gov. Abbott for signing the bill. House Bill 1101 is a big win for electric ratepayers and a big win for fairness and accountability.”
Money for the discounts comes not from tax dollars, but through fees paid by electric users statewide. Those fees flowed into a special government fund — the System Benefit Fund — that was created as part of delicate negotiations with consumer groups during the adoption of the 1999 electric deregulation law.
But the Texas Legislature over the years held back much of the money, using it not for rate discounts but for budget balancing purposes. In 2013 the Legislature voted to end the System Benefit Fund for good, but also to expend the accumulated balance on rate discounts.
That 2013 authorization expires at the end of August, even though there still remains unspent more than $226 million. Without Turner’s bill or similar legislation, the discounts would end in August and the accumulated balance very likely diverted to other purposes. With Turner’s bill, the rate discounts will continue flowing — potentially through August 2017.
“This is great news for low-income electric consumers,” said Dyer, of TCAP. “It’s important that money collected from ratepayers for a declared purpose is used for that purpose. And in this case, the money helps the neediest among us to pay their light bills.”
An electric customer qualifies for the discount if the customer receives Medicaid and SNAP benefits, or if the customer’s household income is at or below 125 percent the standard included in federal poverty guidelines. The size of future discounts under House Bill 1101 remains unclear, although they likely will exceed 15 percent on a typical bill. Only customers in areas of the state with retail electric deregulation qualify.
The Public Utility Commission has more information on their website, which can be found here.
TCAP is a coalition of more than 160 cities and other political subdivisions that purchase electricity in the deregulated market for their own governmental use. Because high energy costs can impact municipal budgets and the ability to fund essential services, TCAP, as part of its mission, actively promotes affordable energy policies. High energy prices also place a burden on local businesses and home consumers.