Texas CapitolHere’s a note of warning to low-income Texans: your summertime electric bills might soon be going up.

That’s because a popular bill discount program will disappear in 2015 unless the Texas Legislature takes action. The program has helped hundreds of thousands of Texans over the years, but legislative authorization for it ends in August.

The good news is that Sylvester Turner, a state representative from Houston, has filed legislation to temporarily extend the program.

Here’s the back story: in 1999, as part of the Texas electric deregulation law, the Texas legislature created a “System Benefit Fund” to help low-income ratepayers. Supported through small assessments on Texas utility bills, the System Benefit Fund was intended to finance customer education programs, the state’s powertochoose.org website and rate discounts.

But the fund over the years has become something of a legislative piggy bank, with lawmakers using it in an accounting gimmick over successive legislative sessions to balance state budgets. Although budget writers technically left the money unspent, they nonetheless curtailed the rate discounts during some years and eliminated them altogether during others.

Sylvester Turner

Sylvester Turner

In 2013 the Texas Legislature decided that the remaining money should be expended for its intended purpose, and then the System Benefit Fund discontinued altogether. They adopted House Bill 7 under which the small fee used to finance the fund would be discontinued, but which also authorized a final burst of rate discounts.

The problem is that there was a stunning amount of money left in the System Benefit Fund — in excess of $600 million — and enrollment in the bill discount program during the last two years was less than projected. So despite stunning bill discounts of up to 82 percent, there will be plenty of money left over at the end of the current budget cycle.

And this brings us to the current dilemma.  Unless the legislature takes action, as much as $247 million in System Benefit Fund dollars will end up in the state’s general fund. That means that low-income Texans will not receive the benefit of those dollars, and what was collected as a special purpose fee from ratepayers to finance the System Benefit Fund will be transformed into what must now be considered a bona fide tax.

The Texas Coalition for Affordable Power supports the low-income discount program and calls for the remaining money in the System Benefit Fund to be used for that purpose.   The money was collected from ratepayers to help needy ratepayers, and spending it on any other purpose would be to break a covenant with Texans.

That’s why TCAP is supporting House Bill 1101, by state Rep. Sylvester Turner, to temporarily extend the program.

The PUC, in a communication with lawmakers, also has called for the temporary continuation of the fund. “The Commission requests an extension of the life of the System Benefit Fund to 2017 and authorization of a discount to spend the remaining fund balance,” the agency writes in its 2015 Scope of Competition report.

The staff of the Public Utility Commission of Texas next month is holding a workshop regarding the status of the fund, and to explore different funding options.

— R.A. Dyer

What is the Texas Coalition for Affordable Power?

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.

 

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