The Public Utility Commission this week asked for public comments on a proposed rulemaking and policy statement revisions that address Customer Assistance Programs under which low-income customers receive financial assistance in paying utility bills.

The Commission voted 5-0 to seek comments on the proposed rulemaking and revised policy statement as part of its comprehensive examination of universal service programs. In considering CAP design, funding and cost recovery simultaneously, the Commission’s goal is to balance the interests of the low-income customers who participate in CAPs with interests of all residential ratepayers.

The state’s electric and natural gas competition laws require that every electric utility and major natural gas utility establish a CAP, the funding levels and program design vary from company to company.

The proposed rulemaking establishes a unified process by which the level of funding for each electric and natural gas utility can be determined in conjunction with the Commission’s triennial review of the utility’s universal service and energy conservation plan.

The proposed rulemaking:

· Requires Commission approval before the utility can implement a CAP plan or a revision or modification to an existing plan. This also would apply to temporary modifications;

· Establishes rules for utilities to follow when dismissing customers from CAPs including: the failure to accept usage reduction services; the failure to verify eligibility requirements; the failure to apply for the Low Income Home Energy Assistance Program; the failure to report changes in income or household size; and the failure to accept free budget counseling offered by the utility;

· Requires the utility to propose a tariff rule dealing with the application of LIHEAP grants to CAP customer accounts; and

· Addresses cost recovery for the utilities as well as how timeliness of collection activities will be considered in evaluating costs claimed for recovery.

The CAP policy statement was designed to be a blueprint for CAP structure and operations, and has not been revised for several years. The proposed changes to the policy statement:

· Recognize that universal service including CAPs should be adequately funded to serve all eligible customers who request the service;

· Eliminate enrollments ceilings in favor of a case-by-case determination of whether a company’s CAP is adequately funded;

· Tie minimum CAP payments to an index to reflect changes in energy prices;

· Adopt a mechanism to adjust maximum CAP credits to reflect changes in energy prices;

· Advise the utility to inform customers about exemptions such as illness or an increase in household size that may excuse a customer’s violation of a CAP control feature. CAP control features include minimum payment terms and limits on consumption that help to control the overall costs of the program;

· Clarify eligibility criteria for CAP enrollment to include receipt of a LIHEAP crisis grant and automatic referral to CAP when facing termination of service; and

· Forgive arrearages on a monthly basis when timely CAP payments are made.

On October 19, 2006, the Commission concluded its investigation of CAPs and provided direction for the proposed rulemaking and amendment of the CAP policy statement to address funding mechanisms and program design.

The 2006 Universal Service Performance and Collections Report issued earlier this month by the PUC found that in 2006, electric utilities spent $117,050,577 to enroll 217,651 customers in CAPs where on average those customers pay 81 percent of their total bill. Natural gas utilities spent $173,063,559 to enroll 182,034 customers in CAPs where on average those customers pay 86 percent of their total bill.

Comments are due 60 days after the publication of the Orders in the Pennsylvania Bulletin.

For more information, visit the PUC website.

8/31/2007