About $52 — that’s how much money low-income Texans can expect to save on their electric bills each month for an entire year under a proposal before regulators on Thursday.
The discounts will flow through August 2016 and reduce bills by nearly five cents per kilowatt hour. Action taken recently by the Texas Legislature — in particular the adoption of House Bill 1101 by state Rep. Sylvester Turner, a Houston Democrat — make the discounts possible.
The legislative action also ensures than a quarter billion dollars already collected for the low-income discounts are not diverted elsewhere. The Texas Coalition for Affordable Power, a leading advocate for House Bill 1101, called that bill the most important this year for electric customers.
“These discounts provide a great service to low-income electric consumers,” said TCAP executive director Jay Doegey. “The legislation that made it possible also is great policy. It ensures 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.”
While the Texas Public Utility Commission already administers a discount program, that program would have abruptly ended next month absent legislative action. Under HB 1101, the three PUC commissioners must still set the amount of the discounts and agree to other details — actions the commissioners could take during their regular meeting on Thursday.
Money for the low-income program comes not from tax dollars, but through fees previously 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.
The 2013 authorization expires at the end of August, even though there still remains unspent more than $226 million. Without Turner’s bill and related appropriations legislation, the accumulated balance very likely would have been diverted to other purposes.
Turner’s legislation also changes how the discounts are applied. Under previous rules, the discounts could only be applied for five months and could not exceed 15 percent of a given bill. Turner’s bill lifts that cap and allows low-income Texans to receive the discounts for 12 months.
Thursday’s proposal at the PUC would set the discount at approximately 31 percent. PUC officials have said that the discount may be adjusted upward or downward during the year, depending on variables such as participation in the low-income discount program and the weather.
If money remains unspent in the System Benefit Fund beyond August 2016, House Bill 1101 allows the discounts to extend as far as August 2017.
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. 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.
Is a policy analyst consultant for TCAP, a coalition of political subdivisions in Texas that purchase electricity in the deregulated market for their own governmental use. Because energy costs are typically a significant budget item to our members, TCAP is consistently looking for ways to save our members money, through cost-saving contracts, energy efficiency or demand response programs.