NOTICES
PENNSYLVANIA PUBLIC
UTILITY COMMISSION
Review of Universal Service and Energy Conservation Programs; Doc. No. M-2017-2596907
[48 Pa.B. 2034]
[Saturday, April 7, 2018]
Staff Report Summarizing Public Comments, Feedback and Suggestions Regarding Universal Service and Energy Conservation Programs Introduction
By a December 16, 2016 Secretarial Letter at Docket No. L-2016-2557886, the Pennsylvania Public Utility Commission (Commission) opened an initiative to review and revise existing low-income usage reduction regulations. On April 6, 2017, the Commission adopted the Joint Motion of Commissioner David W. Sweet and Vice Chairman Andrew G. Place relative to universal service. The Commission's Order implementing the Joint Motion was entered on May 10, 2017 (May 10 Order), at Docket No. M-2017-2596907, initiating a comprehensive review of the entire universal service and energy conservation model, incorporating the Commission's on-going work on Low-Income Usage Reduction Programs (LIURPs). On May 5, 2017, the Commission commenced a proceeding to review energy burdens and affordability at Docket No, M-2017-2587711.
On July 14, 2017, the Commission published a report developed by the Law Bureau with the assistance of the Bureau of Consumer Services (BCS) on the statutory, regulatory and policy frameworks of existing universal service and energy conservation programs. The Law Bureau Report outlined the processes required to initiate any proposed changes to the existing USECP and LIURP frameworks.
The May 10 Order invited interested parties to submit written comments on their priorities, concerns, and suggestions for amending and improving any or all aspects of universal service programs by August 8, 2017.
On September 13-14, 2017, BCS coordinated a stakeholder meeting (SM) to gather feedback on the previously submitted comments and any other priorities, concerns, or suggested changes pertaining to the USECPs. Interested parties submitted reply comments on October 16, 2017.
Thereafter, BCS, in consultation with the Law Bureau, prepared this report summarizing all parties' comments, feedback, and suggestions.
List of Commenters
On or before August 8, 2017, Comments in this proceeding were filed at this docket by the following organizations:
• Blair County Community Action Agency;
• Commission on Economic Opportunity of Luzerne County (CEO Luzerne);
• Coalition for Affordable Utility Services and Energy Efficiency in Pennsylvania (CAUSE-PA), Tenant Union Representative Network (TURN), and Action Alliance of Senior Citizens of Philadelphia (Action Alliance) (collectively Low Income Advocates or Advocates);
• Columbia Gas of Pennsylvania, Inc. (Columbia);
• Duquesne Light Company (DLC);
• Energy Association of Pennsylvania (EAP);
• Indiana County Community Action Program;
• Keystone Energy Efficiency Alliance, Housing Alliance of Pennsylvania, Green and Healthy Homes Initiative, National Consumer Law Center, National Housing Trust, and Natural Resources Defense Council (collectively PA Energy Efficiency for All Coalition [PA-EEFA])
• Met-Ed Industrial Users Group, the Penelec Industrial Customer Alliance, the Philadelphia Area Industrial Energy Users Group, the PP&L Industrial Customer Alliance, and the West Penn Power Industrial Intervenors (collectively Industrial Customers or Industrials);
• Metropolitan Edison Company (Met-Ed), Pennsylvania Electric Company (Penelec), Pennsylvania Power Company (Penn Power), and West Penn Power Company (West Penn) (collectively FirstEnergy or FirstEnergy Companies);
• National Fuel Gas Distribution Corporation (NFG);
• Office of Consumer Advocate (OCA);
• PECO Energy Company (PECO);
• Pennsylvania Energy Marketers Coalition (PEMC);
• Peoples Natural Gas Company LLC and Peoples Gas Company LLC, f/k/a Peoples TWP (collectively PNG);
• AARP Pennsylvania; ACTION Housing, Inc.; Community Justice Project; Disability Rights Pennsylvania; Health, Education, and Legal Assistance Project: A Medical-Legal Partnership; Homeless Advocacy Project; Interim House, Inc.; Just Harvest; Laurel Legal Services; Legal Aid of Southeastern Pennsylvania; MidPenn Legal Services; Neighborhood Legal Services Association; North Penn Legal Services; Pennsylvania Coalition Against Domestic Violence; Pennsylvania Council of Churches; Pennsylvania Institutional Law Project; Pennsylvania Legal Aid Network; Philadelphia Legal Assistance; Regional Housing Services; SeniorLAW; Southwestern Pennsylvania Legal Services, Inc.; The Women's Center, Inc.; The Women's Resource Center; Stephen R. Krone; and Medna D. Makhlouf (collectively Pennsylvania Service Providers);
• PA Departments of Aging (Aging), Community and Economic Development (DCED), Environmental Protection (DEP), and Health and Human Services (HHS);
• PA Energy Marketers Coalition (PEMC);
• PA Weatherization Providers Taskforce;
• Philadelphia Department of Human Services (PDHS);
• Philadelphia Gas Works (PGW)
• PPL Electric Utilities Corporation (PPL);
• UGI Utilities, Inc.—Gas Division (UGI-GD), UGI Utilities, Inc.—Electric Division (UGI-ED), UGI Penn Natural Gas, Inc. (UGI-PNG), and UGI Central Penn Gas, Inc. (UGI-CPG) (collectively UGI or UGI companies);
• United Way of Pennsylvania (United Way); and
• Weatherization and Conservation Collaborative (WCC);
On October 16, 2017, Reply Comments in this proceeding were filed at this docket by the following organizations:
• Commission on Economic Opportunity of Hazelton, PA (CEO Hazelton);
• Commission on Economic Opportunity of Wyoming County (CEO Wyoming);
• CEO Luzerne;
• Low Income Advocates;
• Columbia;
• DLC;
• Industrial Customers;
• FirstEnergy;
• Housing Authority of the County of Beaver;
• Housing Development Corporation of NEPA (HDC);
• NFG;
• OCA;
• Office of Small Business Advocate (OSBA);
• PA Chamber of Business and Industry;
• PA Weatherization Providers Taskforce,
• PECO;
• PEMC;
• Peoples;
• PDHS;
• PGW;
• PPL;
• Scranton-Lackawanna Human Development Agency, Inc. (SLHDA);
• UGI;
• United Way; and
• WCC.
The following organizations attended the Commission's Stakeholder meeting, in person or via teleconference, on September 13th and 14th, 2017:
• Burke Vullo Reilly Roberts (representing CEO Luzerne)
• CMC Energy
• Columbia
• Community Legal Services (CLS) (representing TURN)
• Department of Human Services
• Dollar Energy Fund (DEF)
• DLC
• EAP
• Energy Coordinating Agency (ECA)
• FirstEnergy
• Keystone Energy Efficiency Alliance
• McNees, Wallace, & Nurick LLC (representing Industrial Customers)
• NFG
• OCA
• OSBA
• PECO
• Pennsylvania Utility Law Project (PULP) (representing CAUSE-PA)
• Peoples
• P.R. Quinlan
• PGW
• PPL
• SFE Energy
• UGI
• United Way
Executive Summary
In reviewing the many aspects of Universal Service Design and Implementation, the Commission staff finds that utilities, advocates, and community based organizations bring some very different and some very similar opinions and recommendations.
Participants in this proceeding have recognized that some of the original directives in the Customer Assistance Program (CAP) Policy Statement are outdated, some need further definition, and some commenters prefer CAP policy be placed into regulation.
Utilities have traditionally had discretion to define CAP eligibility, with some holding fast to a ''payment troubled'' requirement, some only requiring self-certification of income as eligibility, and others granting automatic enrollment when a customer receives a Low-Income Home Energy Assistance Program (LIHEAP) grant. Determining household income itself is open to further specification as there can be taxes and deductions from gross earned income that is not applied to gross unearned income; and household income can change drastically from year to year for a self-employed or seasonally employed customer.
As indicated in the comments and at the SM, utilities prefer, in general, to maintain the CAP payment plans each currently offer, although, depending on costs of change, some utilities are willing to consider a single payment plan option or two. However, most advocate maintaining flexibility in program design. Low Income Advocates stress affordability as the main goal of CAPs, noting the benefits of streamlining payment plans according to energy burden or percent of income.
Most utilities and advocates agree that there would be benefits to using a standard ''no income form'' for all energy assistance programs. This form would require customers to certify that they have no current income and explain how they meet their living expenses. Utilities and advocates also support the development of a common application form that can be used to qualify for all assistance programs.
Sharing data among utilities and the Department of Human Services' (DHS) programs is recognized as a possible and positive accomplishment if customer permission is obtained and privacy concerns are addressed. Benefits to such income data sharing include utilities' ability to more simply qualify and recertify customers for CAP, and customer's ability to document income-eligibility once for multiple assistance program, increasing efficiencies for all. DHS acknowledges that it has had internal conversations on this issue.
Comments and SM discussions that relate to LIURP operations will be addressed as part of the Commission's review of LIURP regulations at Docket No. L-2016-2557886. Summarized comments related to LIURP in this report generally relate to, or are intertwined with, the design, budgeting, administration, reporting, and evaluation of universal service programs.
Opinions on CARES programs varied, with some commenters' stating it is merely a referral program, others requesting the program be staffed by trained social workers to provide more comprehensive case management, and some suggesting that referral outcomes be tracked and reported to the Commission. Most had concerns with increased costs to implement those suggestions.
Utilities' Hardship Fund Programs differ in both administration and implementation. Most utilities have varying options for fundraising, but few companies currently solicit customer contributions through electronic billing. Others, after discussion, are open to pursue implementing more online solicitations, depending on operational costs. Advocates strongly encourage increased fundraising. The general consensus was that hardship funds should not be derived from base rates.
Most utilities propose increasing the current three-year time-period between the filing of Universal Service and Energy Conservation Plans (USECPs), for several reasons, not the least of which was for increased time to implement recommendations made through third-party universal service evaluations conducted every six years.
There are differing opinions on the Commission's review process for USECPs. Some would prefer they go before an Administrative Law Judge (ALJ) first to allow discovery and establish a certified record. Other parties prefer the Commission maintain the current review process administered by BCS. Opinions also differ as to whether USECP issues can or should be discussed or addressed in a rate case. Program costs are a common thread in these discussions.
Because of the increasing costs of universal service programs, there are very strong opinions as to whether there should be cross-class subsidization. Commercial and industrial advocates assert that since they cannot benefit from these programs, they should not be burdened with the costs. Other parties argue that most residential customers who currently pay for these programs do not benefit from them either and that affordable utility service is a public good that benefits the entire community. Some commenters advised that businesses might leave the utility (i.e., switch to deliverable fuels) if they were required to pay universal service costs.
Comments and SM discussion resulted in thoughtful consideration of issues raised and sometimes reconsidered through Reply Comments. Further stakeholder meetings and collaboratives were frequently recommended.
1. Customer Assistance Programs
Eligibility
Columbia proposes that CAPs should be restricted to income-eligible customers who demonstrate they cannot afford their utility bills. Columbia proposes customers should be required to apply for LIHEAP and Hardship Funds before enrolling for CAP. Sometimes, either Hardship Fund grants or LIHEAP grants may resolve a crisis for a low-income customer, making CAP unnecessary. This could help keep CAP costs down. Columbia Comments at 3.
PGW does not currently require customers to be ''payment troubled'' to qualify for its CAP. However, it is willing to consider adding this requirement. PGW Reply Comments at 3.
The Low-Income Advocates maintain that all customers with household incomes less than 150% of the Federal Poverty Income Guidelines (FPIGs) are payment-troubled. There should be no further payment-troubled requirement as proof. Low Income Advocate Comments at 34. The Advocates state that allowing all low-income customers to enroll in a CAP before accruing arrears will likely significantly improve payment behaviors—reducing debt management, collections, and uncollectible costs. It is well documented that improved affordability significantly improves payment behavior, noting that when a household receives an affordable bill, they are far more likely to pay their bill. Low Income Advocates Reply Comments at 7-8.
OCA notes that when a confirmed low-income customer misses a monthly utility bill, that utility should initiate a process to enroll that customer in CAP. Utilities should not wait until a customer defaults on a payment agreement. OCA added that even though those with incomes at 151—200% of the FPIG struggle to afford the basic necessities, they are also burdened with helping to financially support universal service programs. According to 52 Pa. Code Section 69.262 Definitions, low-income payment-troubled customers are ''those who have failed to maintain one or more payment arrangements.'' OCA suggests that definition is too narrow. OCA Comments at 9-10.
EAP agrees that CAP eligibility could be redefined to include those who meet the program's income guidelines in an effort to avoid increasing arrearages. However, it does not support automatically enrolling all low-income customers into a CAP because that assistance may not be needed by all customers and the increased costs to the program would further burden residential ratepayers. EAP Reply Comments at 5-6.
DLC states there is no need for a ''payment troubled'' requirement. DLC Reply Comments at 17. DLC suggests the Commission take steps to develop eligibility and acceptable documentation for income calculations for different income levels. DLC Reply Comments at 11-12.
PNG states that CAP eligibility should be based on whether the customer is low-income, not payment-troubled. PNG Reply Comments at 3.
PPL Electric Utilities Corporation (PPL) has found that a ''payment-troubled'' requirement is a barrier to CAP enrollment. It agrees with the Low-Income Advocates that all income-qualified customers should be eligible for CAP. PPL Reply Comments at 3.
PNG strongly discourages a CAP enrollment limit or payment troubled requirement. PNG Reply Comments at 6.
Determining household income
OCA submits the CAP Policy Statement should reflect the fact that 30-, 60- or 90-day annualized income is an appropriate basis for establishing CAP eligibility. CAP eligibility should not be restricted to annual (12-month) income. OCA Comments at 23 and SM.
OCA offers several reasons why CAP should not rely on annual income only. First, it is inconsistent with LIHEAP policy. OCA's understanding is that LIHEAP allows households to use an annualized income (30-, 60-, or 90-day income) or an annual income, whichever provides the greater benefit. OCA urges that the CAP income eligibility determination be reconciled with the LIHEAP income eligibility determination to the extent feasible. These reasons support the use of flexible standards for determining CAP eligibility based on current income. OCA Reply Comments at 5-6.
Second, while the use of tax returns can be a sufficient basis to establish annual income, it can be problematic for self-employed individuals. A low-income, self-employed individual may not be required to file a tax return under the law. Further, that individual is likely to have more dramatic changes of income from year to year. As such, the tax return information may be outdated. OCA Reply Comments at 5.
Third, seasonal laborers will have monthly variations in income that when viewed in isolation may look different than their annual incomes or incomes at the time of their initial application. These three reasons support the use of flexible standards for determining CAP eligibility based on current income. OCA Reply Comments at 5.
DLC would prefer more current income information for its calculation. SM. DLC recommends use of annualized or annual income, whichever is more beneficial to the customer. DLC Reply Comments at 18.
EAP agrees with OCA that annualized income is equivalent to annual income for CAP, but utilities should be permitted to exercise flexibility. EAP Reply Comments at 7.
The Low Income Advocates propose that an applicant/customer should have the choice of using last month's income annualized or last year's, whichever is more beneficial to the applicant. The Advocates would like the Commission to adopt flexible and consistent income documentation standards as many utility USECPs do not disclose how the utility calculates income and/or what documentation the utility requests from CAP applicants. The lack of clear guidelines for income documentation is particularly problematic for low-income populations, which often work ''odd jobs,'' receive inconsistent support from family or friends, or otherwise earn income through non-traditional employment. The Low-income Advocates recommend that income documentation issues be referred to a working group consisting of Commission staff and interested stakeholders, which could explore the issue more thoroughly and develop recommendations to the Commission in furtherance of a consistent and fair policy for the Commission's adoption. Low Income Advocate Comments at 36-37.
The OCA agrees with the Low-Income Advocates on the recommendation for a working group. However, the Commission should look to the income documentation requirements imposed by Pennsylvania's LIHEAP program for guidance. If the income documentation is sufficient to establish income eligibility to receive LIHEAP assistance, the OCA submits that the same documentation should be sufficient to establish income eligibility for CAP assistance. OCA Reply Comments at 10.
The Low Income Advocates note that customers with earned income may have harder time qualifying for CAP than customers with unearned income. To demonstrate the conundrum, the Advocates offer this example: a household of two persons that relies on a monthly Social Security check of $2,030 would fall at exactly 150% of the Federal Poverty Income Guidelines and would be eligible for CAP. However, a household of two that receives a paycheck (i.e., net income) for $2,030 for work performed would not be eligible for CAP because their higher gross income, including tax withholdings and other deductions, is above 150% FPIG. Both households have the same monthly spending power, yet one is eligible for CAP and the other is not. The Low Income Advocates are not suggesting that those with employment income should be given any advantage over non-working families but do assert that all low income households should be assessed for eligibility in CAP based on something closer to actual expendable income—not gross pre-tax income. Low Income Advocate Comments at 37-38.
The Low Income Advocates recommend adoption of a standard earned income disregard of 20% of income which would help place working families on level footing and would better ensure that needy families are able to access the relief they need to meet their monthly expenses. They also recommend that households with fixed income sources—such as Social Security—be permitted to deduct their mandatory Medicare premiums from income, as it is deducted from benefits. Low Income Advocate Comments at 38.
OCA does not support the use of 'income disregards' into the income eligibility determination for CAP. Within the context of the Temporary Assistance for Needy Families (TANF) program, its earned income disregard cannot be separated from TANF's new Work First program policy. TANF's earned income disregard provides an additional incentive (i.e., disregarding 50% of earned income) for TANF recipients to seek jobs and eventually remove themselves from TANF. OCA asserts no such policy justification can (or should) be attached to utility CAP programs. OCA Reply Comments at 7.
If the Commission were to adopt a proposed earned income disregard and/or income deduction for mandatory Medicare premiums, it would, in fact, be relaxing its long-time definition of ''low-income,'' which references 150% of the Federal Poverty Level. CAP participation would extend to some but not all households with income exceeding 150% of Poverty Level. For these reasons, OCA does not recommend implementing earned income disregards into the CAP program. OCA Reply Comments at 9.
PNG supports applying a standard earned income disregard of an appropriate percentage of income to place working CAP customers on equal footing with those on assistance-based income. PNG Reply Comments at 4.
FirstEnergy's income guidelines must be consistent with LIHEAP's. For this reason, the FirstEnergy does not support including a 20% earned income disregard within the calculation of CAP household income. FirstEnergy Reply Comments at 5.
Asset testing
OCA submits that asset tests should not be used to determine CAP eligibility. OCA opines that requiring a low-income customer to dispose of assets at less than full value and to incur costs in the process of disposal as a requirement to enter a program such as CAP would be counter-productive in both the short- and long-term. OCA Comments at 22-23.
Opinions at the stakeholder meeting varied: PNG had no interest in asset testing as it noted that a customer may have a nice home but their income may not support it. Columbia, however, chooses not to weatherize homes (LIURP) valued over $800,000. CLS of Philadelphia opposed asset testing and said there is no easy way to determine asset value. SM.
DLC does not support asset testing for CAP. DLC Reply Comments at 18.
PGW does not support asset tests for CAP enrollment but does look at asset valuation (e.g., determining property ownership and value) when investigating potential fraud in CAP. PGW Reply Comments at 5.
The Low Income Advocates agree with OCA and stand firmly opposed to asset testing for CAP eligibility. Low Income Advocates Reply Comments at 27.
Requiring Social Security Numbers
OCA submits that a utility should not require a customer to provide his or her Social Security Number (SSN) as prerequisite to program participation. Moreover, while the utilities may request such SSNs, before doing so, utilities should notify and educate consumers that the request is not, and may not be, mandatory. Utilities should adopt alternatives to the provision of SSNs for those not likely to have SSNs. Finally, utilities should not provide access to SSNs to anyone not requiring access to determine program eligibility and should not maintain records of the SSN beyond the time required to use the SSN to determine program eligibility. OCA Reply Comments at 19—21.
The Low Income Advocates assert that SSNs should not be required to participate in universal service programs. SM
DLC accepts driver's license or other government identification in lieu of SSNs. DLC Reply Comments at 18.
PGW does not require SSN for CAP enrollment, but does ask for it. Upon refusal, PGW permits other ways to verify identity. PGW Reply Comments at 4.
FirstEnergy does not consider a customer's SSN mandatory for CAP but does request it as an efficient means to confirm a customer's identity. FirstEnergy Reply Comments at 4.
Columbia agrees that SSNs should not be required but customers should be permitted to voluntarily provide SSNs. Columbia suggests that the CAP Policy Statement, if updated, clearly state that utilities cannot require an SSN for CAP enrollment but can ask for and use one when provided voluntarily. Columbia Reply Comments at 2-3.
Payment Plans
OCA and Low Income Advocates support percent of income payment plans (PIPs). OCA Comments at 11-12. Low Income Advocates Comments at 6.
NFG opposes a PIP as a uniform program design stating it is unnecessary and would negatively impact its customers. NFG's CAP program (LIRA) encourages resource conservation and rewards consumption management. A PIP would not. Flexibility is key to program success. NFG Reply Comments at 4.
PGW does not support a PIP CAP that allows customers to pay either a percentage of income or the average bill amount, whichever is less. It argues that CAP customers paying the average bill amount have a lower energy burden than PIP customers and should not be subsidized with ratepayer dollars. PGW Reply Comments at 5.
FirstEnergy opposes a statewide requirement for PIP adoption. It maintains that a fixed credit CAP ensures that costs remain reasonable for other customers who are responsible for funding these programs through utility riders. FirstEnergy submits that a PIP design eliminates a customer's responsibility to implement energy conservation behaviors. The legislature clearly intends for utilities to promote energy efficient customer behavior, and a PIP is inconsistent with this objective. FirstEnergy Reply Comments at 7-8.
Flexibility with other plans
PPL supports multiple payment options, including a PIP, that improve customer bill payments. PPL Comments at 10. PPL does not support a requirement that all utilities use the same payment plan design for CAP and specifically opposes a PIP-only mandate. The Commission should consider the costs of such change. PPL Reply Comments at 2. PPL currently offers more than one payment option and stated that if it must change to only offer a PIP, the change could raise program costs by $500,000 per month. SM.
The Low Income Advocates suggest a PIP as a payment ceiling for alternate CAP payment plans. SM.
PECO and DLC note that it would be difficult to discuss PIPs without discussing an appropriate energy burden level, which is currently being reviewed in another proceeding.1 SM.
OCA supports flexibility in CAP payment plan designs but argues that programs that explicitly tie CAP bills to an affordable percentage of income may be more effective. Variations on the PIP such as the fixed credit option (FCO) and other designs beyond the PIP should be permitted. OCA Comments at 12. If program designs other than PIP are in place, the OCA recommends that the bill payment patterns be monitored to ensure continued effectiveness. OCA Reply Comments at 36-37.
DLC supports a PIP but maintains that flexibility is needed for changing conditions. If CAP shopping is allowed, an FCO could work for portability. DLC Reply Comments at 18.
Energy Burden
An energy burden and affordability inquiry is proceeding on a separate track at Docket No. M-2017-2587711. Knowing there is a separate proceeding addressing this issue, stakeholders nevertheless made a few comments, emphasizing their positions.
As a quick overview, the Pennsylvania Service Providers, PA-EEFA, the Low Income Advocates, and the WCC recommend a 6% energy burden. Pennsylvania Service Providers Comments at 3; Low Income Advocates Comments at 16—19; PA-EEFA Comments at 6; and WCC Comments at 6. The Low Income Advocates propose 4% for gas heating and 2% for gas. Low Income Advocates Comments at 29-30.
PECO estimates that for every 1% decrease in the energy burden level, its CAP costs will increase by 20%. PECO Comments at 7.
The Low Income Advocates maintain that total payments must stay under 6% of energy burden, so customers can pay based on an ability to pay. Any add-ons like CAP Plus should be part of the program design, not added to the energy burden. Low Income Advocate Comments at 23-24.
UGI noted that it is currently a low-cost commodity and that its customers have choices for other sources of natural gas. It faces concerns that customers would leave its system if costs increase $5—9 million should there be a 6% energy burden. SM.
EAP and DLC are waiting the results of the Commission's Energy Affordability proceeding at Docket No. M-2017-2587711 before commenting on this issue. SM; DLC Reply Comments at 19.
OCA notes that Pennsylvania is different from other states which have a 6% energy burden. Most other state universal service programs are only open to LIHEAP recipients. Pennsylvania is not the same size as other states, and others do not include similar amounts of ratepayer contributions. SM.
EAP points out that the energy assistance programs in New Jersey and Maryland, which have energy burdens closer to 6%, have a much smaller scope and cost than PA's utility-funded programs. It submits that universal service programs are not intended to be a ''catch-all'' solution for every Pennsylvanian who might struggle to pay his energy bills. EAP Reply Comments at 3.
PGW asserts that universal service programs are not government programs to help solve poverty in PA. Reductions in energy burden would cost tens of millions of dollars for non-CAP PGW customers, and PGW's CAP costs would grow. It awaits the Commission's energy burden study results. PGW Reply Comments at 6—8.
UGI states that a decision regarding a correct energy burden for low-income customers should be discussed and evaluated after the release of the Energy Affordability Report. It estimates, based on 2016 figures, that lowering the energy burden to 6% for CAP would increase CAP credit expenses by 76%. UGI cautions against comparing Pennsylvania's energy burden to that of other states for several reasons, including differences such as PA does not make CAP a prerequisite for receiving LIHEAP, program scope, and costs. UGI Reply Comments at 3—5.2
PECO notes that if a 6% energy burden requirement is implemented, it would increase CAP Credit expenditures by $72 million for electric and $14 million for gas. PECO Reply Comments at 4.
FirstEnergy urges the Commission to use caution in reducing energy burden levels, as the projected increase in costs for other customers would likely be astronomical. Lowering the energy burden to 6% for all CAP participants would result in additional annual CAP costs of approximately $5.2 million for Met-Ed, $5.9 million for Penelec, $1.5 million for Penn Power, and $9.5 million for West Penn. These projected costs would increase the current level of CAP credit costs by 46% annually. FirstEnergy recommends that the Commission postpone a determination regarding energy burden levels until it completes its Energy Affordability proceeding. FirstEnergy Reply Comments at 10.
The Low Income Advocates respond to concerns of several stakeholders that the cost of providing adequate universal service programming to all those in need is simply too expensive, and cannot or should not be done. The Low Income Advocates assert that the stakeholders making such arguments have misinterpreted the Commission's legal obligation to ensure that universal service programs remain cost effective as a requirement that they not be too costly. Low Income Advocates Reply Comments at 2.
OCA submits that once the Energy Affordability proceeding is complete and the stakeholders have the opportunity to conduct a full analysis of the findings, further discussions on this issue will be necessary.3 OCA Reply Comments at 22—36.
The Low Income Advocates urge the Commission to continue its universal service inquiry and decision making process in tandem with the Energy Affordability proceeding. The Advocates maintain a delay in progress will simply result in continued hardship for low-income households and, thus, a failure to achieve the intended outcomes expected by the Choice Acts. Low Income Advocates Reply Comments at 17.
Minimum payments
DLC opined that the minimum charge provision in the CAP Policy Statement is outdated as it can be less than the basic service charge; if the utilities could charge both (minimum payment and the basic service charge), it would cover at least a part of the fixed system costs and some percent of energy costs. DLC Comments at 12. DLC supports continuation of minimum CAP payments. DLC Reply Comments at 19.
At the stakeholder meeting, the Low Income Advocates state that low-income customer protections may be lost if minimum payments are added to the distribution cost. SM.
PGW supports maintaining a minimum bill for low or no-income CAP customers. However, it would be willing to participate in a collaborative stakeholder process to establish new minimum payment amounts. PGW Reply Comments at 6.
OCA proposed that minimum payments should balance affordability and payment responsibility and be based on an objective set of factors. OCA submits it is very important to maintain a customer payment mindset as minimum payments help in controlling the costs of CAP programs. OCA Comments at 13—15 and SM. OCA supports the continued use of minimum payments in CAP program design. It has concerns with the proposal to specifically tie the minimum payment to a particular cost component, such as distribution costs or customer charge. It should be tied to CAP customer affordability and to establishing routine payments. OCA Reply Comments at 17.
OCA submits that the following principles should help determine a minimum payment:
• It should impose an obligation to make some payment toward utility bills;
• It should not be so high as to materially impede achieving the affordability objectives of CAP;
• It should reflect some empirical reality about utility service territories (i.e., there should be range for minimum payments);
• It should reflect the affordability ranges otherwise adopted by the Commission; and
• It should reflect the income for a three-person household living with income at 25% of the FPIG because the average household sizes in Pennsylvania are between two persons and three persons per household;
• It should reflect the average household size in its service territory, and
• It should reflect the household composition at the time of the triennial filing of the USECP.
OCA Reply Comments at 18.
PPL agrees with OCA that utilities should charge minimum payments and that they be uniform across utilities. PPL Reply Comments at 3.
FirstEnergy opposes a minimum payment requirement that would limit the CAP credits received by customers each month. An arrearage copayment is also not compatible with FirstEnergy's CAP design. Such changes would remove a portion of CAP customer benefits and would require a significant overhaul to CAP structure. As a result, to adopt either would require FirstEnergy to significantly modify the current CAP structure. FirstEnergy Reply Comments at 11-12.
Maximum CAP Credits
Columbia does not enforce a limit to CAP credits as its CAP customers should pay the maximum amount they can afford. It would worsen a customer's situation if the customer were removed from CAP for exceeding a maximum amount. Columbia Comments at 4.
Columbia had a pilot program for CAP customers using $1,000 in credits. It surveyed over 2,200 customers to determine the sources of high usage and to see if the customers met one of the existing exemptions. Only 117 accounts did not meet a policy exemption. Of those, Columbia increased the CAP payment amount for 30 customers. Columbia determined that the cost of implementing the pilot program was substantially greater than the benefits of overall reduced CAP credits. It refers customers to LIURP once they have reached $1,000 in CAP credits. Columbia Reply Comments at 4.
The Low Income Advocates find limits to CAP credits unduly punitive. Low Income Advocates state that CAP credits need to be different for each income tier. Because the lowest-income customers receive the biggest discounts on CAP discounts, these customers can quickly deplete allowable credits. Low Income Advocates Comments at 6 and SM.
UGI eliminated maximum credits two years ago but the past two winters have been mild. UGI is still analyzing the impact of this change on its companies' CAP costs. SM.
DLC states that current control features such as minimum payments, consumption limits, and maximum CAP credits are appropriate. It suggests evaluating if these current features are effective in controlling program costs, and/or if other measures exist that should be considered. DLC states a CAP participant should have a maximum benefit that reflects the difference between payment assistance and payment of all usage. Duquesne Comments at 11, 13.
The OCA proposes that:
1. Instead of a fixed ceiling on CAP credits, the maximum CAP credits should be indexed to the individual utility's average annual rates, including the default service price (electric) or supplier of last resort price (natural gas), so that the amount of the maximum CAP credit makes sense given the fluctuations in energy costs in the service territory and distribution rate changes.
2. Limitations should be placed on the maximum CAP credits, and they need not be uniform across utilities due to differences in housing stock and participant income.
3. The maximum CAP credit should vary by FPIG level so that they do not disproportionately affect the lowest income customers. It suggested using the average of all companies' maximum credits.
4. Utilities should notify CAP participants when they are approaching the CAP credit ceiling and automatically evaluate them for LIURP.
5. Utilities should waive maximum limits if customers meet the usage exemptions in the CAP Policy Statement.4
OCA Comments 25—27.
DLC agrees with OCA that the maximum CAP Credit limit in the CAP Policy Statement needs to be updated or reviewed for inflation and need not be consistent among utilities. DLC Reply Comments at 20.
EAP generally agrees that if maximum CAP credits remain part of the CAP Policy Statement, they should be flexible and not part of a regulation. EAP Reply Comments at 8.
PPL believes that maximum CAP credits should be determined in USECPs, not in the CAP Policy Statement. PPL Comments at 11.
PECO states it has very few customers that reach its maximum CAP credits. It will waive the maximum limit for households experiencing health problems necessitating high energy usage. SM.
PGW does not currently set limits on CAP credit usage. PGW plans to initiate a study on the potential impact of implementing a CAP credit maximum as it may be a reasonable way to address concerns of other ratepayer costs. PGW Reply Comments at 10. PGW would support addressing this issue in a rulemaking. PGW Reply Comments at 11.
PNG opposes a setting an absolute limit on the level of CAP credits available to customers. Any regulation should continue to permit exceptions of the maximum for instances such as increased household members, inability to weatherize, and poor housing stock. PNG Reply Comments at 5.
LIHEAP as a prerequisite for CAP eligibility
OCA opposes LIHEAP participation as a prerequisite to CAP. OCA Comments at 32—34, Appendix A, Colton White Paper at 28. OCA recommends removal of the provision in the CAP Policy Statement that allows for a customer to be penalized for failure to apply for LIHEAP.5 OCA Comments at 12-13. OCA added that most other states only offer low-income programs to customers approved for LIHEAP, and their programs are much smaller than Pennsylvania's. SM.
EAP supports removing the LIHEAP participation requirement from the CAP Policy Statement. EAP Reply Comments at 9.
DLC opposes LIHEAP application as a requirement for eligibility. DLC Reply Comments at 17.
PNG does not support a requirement for LIHEAP or Hardship Fund eligibility before enrolling in CAP. PNG Reply Comments at 3.
PPL supports OCA's recommendation that the CAP Policy Statement be revised so that CAP customers are not penalized for not applying for LIHEAP. PPL Reply Comments at 3.
The Commission on Economic Opportunity (CEO) states that CAP customers should be encouraged but not required to apply for LIHEAP or Hardship Funds. CEO Reply Comments at 1.
Auto-enrollment of LIHEAP recipients into CAP
LIHEAP serves as an income qualifier for CAP enrollment for both Columbia and UGI. Columbia states, however, that sometimes the LIHEAP grant alone is enough to help the low-income customer out of a temporary hardship and that CAP is therefore not necessary. SM.
PGW supports auto-enrollment of LIHEAP recipients into CAP with an opt-out provision post enrollment. PGW would need access to income and household size to establish a correct CAP payment amount. PGW Reply Comments at 12.
OCA used to support CAP auto-enrollment for LIHEAP recipients before enactment of Chapter 14, which complicated any previous benefit. SM. OCA recommends the CAP Policy Statement address what steps a utility must take when auto-enrolling a LIHEAP recipient into CAP. OCA Comments at 47-48.
The Low Income Advocates prefer use of a LIHEAP grant to certify income eligibility or as a qualification for recertification, not auto enrollment. SM.
FirstEnergy does not endorse auto-enrollment into CAP without both the customer's permission and assurances of customer education. FirstEnergy Reply Comments at 3.
Duquesne no longer auto-enrolls LIHEAP recipients into CAP. It is planning to change its CAP to a PIP and will need the specific income to place customers into the appropriate discount. SM. DLC opposes auto enrollment. Education is a necessary step. DLC Reply Comments at 13.
EAP cautions against a mandate for auto-enrolling every income-eligible customer into CAP as the costs would outweigh the benefits. Not all low-income customers are inherently payment troubled or would want to be in CAP. Increased costs could also cause gas customers to switch to deliverable fuels for heating. EAP encourages broadening of eligibility requirements without mandates. EAP Reply Comments at 6-7.
PNG supports using LIHEAP eligibility to verify income eligibility for CAP, but not for auto-enrollment. LIHEAP, without CAP, is sufficient to make gas service affordable for some customers. PNG Reply Comments at 3.
FirstEnergy proposes that the Commission initiate a stakeholder collaborative among DHS, utilities, and customer advocates to evaluate methods for expediting the CAP enrollment process and explore the viability of automatic enrollment of LIHEAP recipients into CAP. FirstEnergy Reply Comments at 4.
Impact of LIHEAP on CAP
Columbia commented that applying LIHEAP directly to the CAP customers asked-to-pay (ATP) amount allows customers to pay less than they can afford for utility service or it can lead to no payment responsibility for one or more months, disrupting monthly payment habits. Columbia Comments at 10-11.
OCA recommends the Commission should address how to resolve the $0 payment problem identified in the Columbia comments. The problem occurs with the application of the LIHEAP grant to the ATP amount. Coordination with the DHS may be necessary to address how to resolve the problem. OCA Reply Comments at 50.6
OCA contends that in some other states, a 6% energy burden level is only available for LIHEAP recipients. The Low Income Advocates note that New York does not limit the availability of affordable bills, calculated as 6% of household income, solely to those customers who receive LIHEAP. Unlike in New York, Pennsylvania's Choice Acts7 require that all Pennsylvania low-income households have access to affordable utility services through the delivery of appropriately funded universal services—not simply those who are eligible to receive LIHEAP. See 66 Pa.C.S. § 2802(9)-(10), 2804(9), 2203(7)—(9). Low Income Advocates Reply Comments at 16.
FirstEnergy maintains that customers should receive their full CAP and LIHEAP benefits. FirstEnergy Reply Comments at 12.
PGW supports application of LIHEAP grants to the CAP credits, as opposed to the application to the CAP bill. PGW Reply Comments at 12.
Customer Information Data Sharing
EAP supports adding a check box on LIHEAP applications for customers to agree to share their income and household information with utilities to streamline qualification for available energy assistance programs. EAP Reply Comments at 13.
The Low-Income Advocates note that data sharing needs to occur both among some gas and electric companies, to coordinate enrollment, and between the companies and DHS. A customer consent process would need to be established as well. SM and Low Income Advocates at 41.
PGW recommends using DHS' COMPASS system to verify a household's eligibility for CAP, the same process used for the telephone Lifeline program. This could simplify and/or eliminate the need to recertify LIHEAP recipients for CAP. PGW Comments at 2-3.
Columbia states that requiring a customer to verify income once for all programs would save time and money, and increase efficiencies. The company suggests a central repository containing proof of income, household size, program participation, and utility service providers set up with customer permission to help alleviate confidentiality concerns. Utilities would need to share the cost of establishing and maintaining this database. Columbia Comments at 10.
FirstEnergy recommends that EDCs, NGDCs, and DHS should share customer income eligibility information via a data exchange program. Customers could grant explicit permission to release their information to the group. FirstEnergy Comments 8-9.
DHS relayed that it is having internal conversations about this topic, including what information it would need from the utilities. SM.
PNG already has an information sharing program in effect. PNG partners with the Dollar Energy Fund, so its CAP customers can link to the FirstEnergy and Pennsylvania American Water Co. CAP programs. Customers are given the option to consent to shared income documentation. PNG Comments at 10.
PNG recommends that both a uniform statewide application be used for CAP and that application should explicitly include consent to share the underlying income and household information with other utilities servicing the same territory for purposes of establishing CAP eligibility. PNG Comments at 10.
PA Energy Efficiency for All Coalition (PA-EEFA) believes that a LIURP work group could be effective in addressing coordination among utilities to streamline service and data sharing. PA-EEFA Comments at 9-10.
PGW would support a data exchange program, but is wary of costs. PGW would need to recover costs from all ratepayers through its Universal Service surcharge. PGW Reply Comments at 12.
Columbia favors greater coordination and data sharing between utilities and DHS, and implementation of a common platform for income acceptance and calculation. Columbia Reply Comments at 8. It also supports a common income acceptance repository and income-level calculation for DHS and utilities to use to ensure the data sharing stream is relevant and accurate. Columbia Reply Comments at 9.
PECO supports bi-directional data sharing with DHS with customer consent, including (a) name, birthdate, and phone number of each household member; (b) household address; (c) income of each household member; and d) household income as a percent of the FPIG. PECO Reply Comments at 7.
The types of information FirstEnergy would seek within a DHS data-sharing program, with customer's verbal or written consent include: (a) date of last income review; (b) household names and ages; (c) household size; (d) household income amount by household member; (e) sources of household income; and (f) DHS benefits provided. FirstEnergy Reply Comments at 31.
OCA submits that so long as appropriate customer consent has been received, it makes administrative sense to use a uniform application and share data across utilities. It should streamline the application/recertification procedures to eliminate the need for CAP customers to verify information twice, particularly when it is with the same agency. In Columbia's 2015—2018 USECP, the Commission approved the development of a data sharing agreement between Columbia and FirstEnergy to share income and data information. A similar strategy could be developed statewide. OCA Reply Comments at 43-44, citing the Columbia 2015—2018 USECP Final Order, Docket No. M-2014-2424462 (Order entered July 8, 2015), at 32-33.
Arrearage forgiveness
OCA recommends the CAP Policy Statement be amended to specify that: (a) CAPs should include customers not receiving a discounted bill but qualifying for arrearage forgiveness; (b) Participants should receive arrearage forgiveness for each on-time and in-full monthly payment and retroactively for months missed once the CAP balance is completely paid; and (c) Tenants of public and/or assisted housing that receive Housing and Urban Development (HUD) energy bill subsidies could participate in CAP to receive pre-CAP arrearage forgiveness but not receive CAP credits. OCA Comments at 11-12, 17 and 28.
PNG prefers that forgiveness apply to all balances that exist on a customer's bill upon CAP enrollment. PNG Reply Comments at 4.
CLS prefers multiple opportunities for forgiveness so that customers can control debt. If arrears are not permitted to mount, the need for forgiveness would not be high. SM.
The Low-Income Advocates support multiple opportunities for forgiveness both for those removed from CAP because they did not recertify or for arrears accrued under previously unaffordable CAP designs. Low Income Advocate Comments at 34. They prefer that customer applicants in transition have arrears forgiven if they have never been in CAP, if they have been homeless, or if they are entering HUD housing. SM.
FirstEnergy is satisfied with its current arrearage forgiveness policy (i.e., offering one-time forgiveness for a balance at initial CAP enrollment). It is concerned with program sustainability if forgiveness is extended. SM. FirstEnergy states that if a customer is removed due to failure to recertify his or her income, the customer may no longer be income-eligible for the program. FirstEnergy would not support allowing this customer to receive a second arrearage forgiveness opportunity. To the extent the Commission is interested in allowing for multiple opportunities of arrearage forgiveness, it should establish explicit frequency and eligibility limitations to ensure the costs associated with this change remain reasonable. FirstEnergy Reply Comments at 14.
DLC is not looking to make any changes to its arrearage forgiveness policy but will consider changes proposed by other stakeholders. DLC Reply Comments at 21.
PPL believes any proposed changes to maximum CAP credits, the reapplication process, and the arrearage forgiveness timeframe should be addressed through the triennial USECP proceeding, not through the CAP Policy Statement. PPL Comments at 11.
Recertification
OCA recommends the following changes to reduce the administrative burden and costs necessary for recertification of the entire CAP population on an annual basis.
1. Recertification should only require reverification of income, not catch-up bill payments as a recertification prerequisite.
2. Amend the CAP Policy Statement to allow for a longer income recertification period if the customer's income is not likely to change from year to year.
3. Annual recertification be waived when the customer receives a LIHEAP grant.
4. The recertification process should be the subject of collaborative discussions to identify best practices. Many utility recertification procedures present substantive barriers to the process of recertification (e.g., significant paperwork, mandatory personal appearances to recertify, unreasonably short recertification periods). Such requirements discourage rather than encourage recertification.
OCA Comments at 45-46.
FirstEnergy is evaluating whether to extend the recertification timeframe for customers with a fixed income or who receive a LIHEAP grant. FirstEnergy Reply Comments at 15.
DLC prefers a two-year cycle for recertification, with more frequent recertification for those reporting no income. SM.
UGI allows recertification once every three years if the CAP customer receives LIHEAP each year. SM.
Columbia notes recertification as its biggest reason for CAP drop outs, even though time limits are very lenient. SM.
The Low Income Advocates prefer coordination of enrollment and recertification with other state and federal assistance programs. They cite a study conducted by the Applied Public Policy Research Institute for Study and Evaluation (APPRISE) which stated that if a household is eligible for food or cash assistance, LIHEAP, or Lifeline, it should automatically be screened and/or enrolled in CAP. They note that in New Jersey, households receiving food assistance are automatically screened for CAP. Low Income Advocate Comments at 41.
DLC notes that a single application form used by all companies/agencies could provide info useful for recertification. DLC does not oppose recertification on a two-year cycle. DLC Reply Comments at 10-11.
DLC is open to OCA's suggestion to develop ''best practices'' to address common problems with recertification. DLC Reply Comments at 21-22.
EAP agrees with OCA that recertification could be streamlined and on a less-than-annual basis when income such as pension or Social Security is unlikely to change. EAP Reply Comments at 7.
PNG prefers limiting annual recertification to those with no LIHEAP benefit within a year and those with potentially changing income such as employment. Multiple-year recertification is sufficient for those on disability income or Social Security. PNG Reply Comments at 5.
FirstEnergy opines it would be more appropriate to determine recertification timeframes within utilities' USECPs rather than in the CAP Policy Statement. In general, the CAP Policy Statement should not establish specific funding levels or timing restrictions but should allow utilities to design their plans in a way that appropriately fits their customers' needs. FirstEnergy Reply Comments at 15.
PPL states that proposed changes to the recertification process should be addressed in a utility's three-year USECP. PPL Comments at 11. PPL uses an 18-month time for recertification. SM.
PGW recommends developing the recertification process through a collaborative. PGW Reply Comments at 13.
Zero Income Recertification
No stakeholder voiced opposition to a six-month recertification period for CAP customers reporting zero income. SM.
EAP agrees that customers reporting zero income should recertify on a more frequent basis. EAP Reply Comments at 7.
PGW recertifies zero-income customers after six months in CAP. SM. PGW does not agree that it should allow a customer reporting zero income to remain in CAP beyond six months as it would encourage and authorize fraud. PGW Reply Comments at 4.
PPL agrees with OCA that utilities should be consistent in requiring zero income customers to recertify income on a less than annual basis. PPL Reply Comments at 3.
DLC requires customers with zero income to fill out a form explaining how they meet their household expenses, and reviews the account every six months. It also requires customer permission to verify income with government agencies such as the IRS or bankruptcy proceedings. DLC Reply Comments at 18.
CLS requests a non-burdensome and consistent process for those with no income. Pennsylvania needs a standard no-income form for all utilities to use. SM.
Reinstatement
Columbia discourages customers from voluntarily leaving CAP. If a household requests removal from CAP, Columbia sends a letter explaining the household would not be able to re-enroll for 12 months and that the household must catch up missed payments to reinstate CAP. Customers must sign and return that letter for removal. SM.
PGW sends a letter and counsels customers who want to leave CAP. Customers must pay the CAP catch up amount (i.e., the amount they would have paid on CAP) prior to reinstatement. SM. CAP customers who request to be removed from CAP must stay out for one year to prevent ''churning.''8 PGW Reply Comments at 14.
PNG policy is to keep customers out for 12 months if they voluntarily leave CAP, but it often waives this requirement. It opposes a mandatory stay-out rule for those voluntarily leaving CAP. It prefers to have flexibility to address customers' needs individually. SM and PNG Reply Comments at 5.
PPL supports flexibility in reinstating a customer into CAP to deal with unusual or extenuating customer circumstances. PPL Comments at 11.
OCA, in its initial comments at 17, recommends that the CAP Policy Statement require that voluntary removal should require a 12-month stay out provision to prevent ''gaming the system'' through churning and increasing costs to non-CAP customers. However, in its reply comments, OCA reflected that at the stakeholder meeting some utilities explained that it is often more effective to allow the customer to return to CAP if they have encountered payment difficulties while out of CAP rather than enforce a 12-month stay-out. Utilities such as Columbia maintain a CAP balance when the customer exits the program and require the customer to pay the CAP balance, if greater than the amount paid while being billed under residential retail rates. In this situation, it is as if the customer never left CAP in the first place. After considering this information, OCA supports allowing such flexibility. OCA Reply Comments at 20.
The Low-Income Advocates support flexibility. They inform customers that, even though bills may be lower in summer, leaving CAP may not be the wisest decision. The Advocates stress educating customers about the consequences of leaving CAP. SM.
FirstEnergy does not support a CAP stay-out period after voluntary removal. It supports allowing utilities the flexibility to determine the criteria for CAP reinstatement as opposed to establishing uniform criteria within the CAP Policy Statement. FirstEnergy Reply Comments at 16.
PECO does not have a stay-out provision for voluntary CAP removal. It does not require a CAP catch-up amount for reinstatement. Former CAP customers are no longer eligible for forgiveness for amounts accrued out of the program if they re-enroll. SM.
Termination
PGW does not remove customers from CAP due to missed payments prior to termination. PGW Reply Comments at 15.
Columbia requires CAP customers to satisfy any missed CAP payments (catch-up) to be reconnected as a CAP customer. SM.
DLC requires those who have a past due balance at time of service termination to pay the past due catch-up amount, curing the default. DLC Reply Comments at 23.
OCA recommends that utilities place CAP customers into the collection cycle for missed CAP payments, including termination of service. Disconnected CAP participants should pay unpaid CAP bills (not at full-tariff rate) and reconnection fees. OCA Comments at 16.
The Low Income Advocates note that termination notices do not explain anything about what may be needed to get back on CAP or to stay in the CAP program. The CAP Policy Statement says that the amount on the termination notice should generally be no more than two CAP bills.9 The Advocates recommend revising the CAP Policy Statement to prevent inconsistent statewide CAP termination practices leading to high up-front restoration costs for vulnerable households. SM.
CAP Costs
OCA recommends that utilities identify and report cost savings when a customer enrolls in CAP. OCA Comments at 43.
NFG and FirstEnergy believe it necessary to consider the residential ratepayers funding burden. NFG Comments at 13; FirstEnergy Comments at 3-4.
DLC suggests that current control features such as minimum payments, consumption limits, and maximum CAP credits are sufficient to control program costs. DLC Comments at 11 and 14.
EAP questions how much a utility is responsible to make energy affordable. SM.
The Low Income Advocates question how big is too big for program costs. The answer depends on having data as to whether CAPs are doing what they are designed to do (i.e., providing affordable monthly payments, establishing consistent payment habits, reducing debt, reducing collection costs, etc.). Pennsylvania enacted universal service provisions and required universal service programs to be appropriately funded. If the universal service programs are expensive but not cost-effective, that needs to be addressed. SM.
OCA, Columbia, and the Low Income Advocates oppose CAP participation limits to control program costs. SM.
FirstEnergy reports that customers have testified at its Public Input Hearings that their rates/bills are reaching the saturation point. SM.
PGW has a very high percentage of working poor customers and questions how much other residential ratepayers should have to pay to make CAP bills more affordable. SM.
DLC echoes PGW's concern. DLC's customer base is 89 percent residential, with many being low income. It recommends the Commission wait until the outcome of the energy burden study to make further decisions. SM.
CAP Shopping
The Low Income Advocates assert that everyone wants a statewide solution to CAP shopping. They encourage the Commission to create some level of consistency, weighing hardship versus benefits. SM.
DLC does not recommend a statewide solution. SM.
OCA recommends that consideration be given to fixed rate products that over the term of the contract that would be lower than the price to compare (PTC) for the same term, guaranteed lower than percentage discounts off the PTC rates, and a requirement of no cancellation fees. Effective communications and consumer education must be in place. OCA Comments at 44-45.
Pennsylvania Energy Marketers Coalition (PEMC) urges the Commission to allow time for lessons to be learned from the PPL CAP Standard Offer Program before proposing a universal policy that may limit low income customers from choosing products and services that may provide real and substantial value to them. It questions protecting low income customers vs. preventing them from exercising choices of energy efficiency audits and equipment, or value added services like home heating, ventilation, and air conditioning system repair. PEMC Comments at 2-3.
DLC submits that if EDCs had ownership of alternative energy systems, such as that proposed in House Bill 1799, introduced on September 21, 2017, an EDC could make renewable resources directly applicable to low-income customers. DLC Reply Comments at 7.
PGW supports imposing reasonable limits on CAP shopping and would allow time to evaluate through a separate stakeholder or rulemaking process. PGW Reply Comments at 13-14.
PECO states that the Commission should defer any CAP shopping related proposal until the Commonwealth Court reaches a decision in the PPL CAP Shopping Appeal of the cases at P-2012-2283641 and P-2016-2534980. PECO Reply Comments at 10.
The Low Income Advocates submit that data available in a number of current and pending proceedings show that unrestricted CAP shopping is responsible for millions of dollars in wasted program costs each year and has been a tremendous impediment to the ability of low income consumers to maintain affordable bills throughout the year. Low Income Advocates Reply Comments at 8.
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1 Energy Affordability for Low Income Customers, Docket No. M 2017-2587711.
2 UGI also provided an appendix to its reply comments comparing Pennsylvania to states with a 6 3.107281e-309nergy burden benchmark. UGI Reply Comments at Appendix A.
3 OCA provided extensive comments outlining information from Ontario and from three other states. OCA Reply Comments at 22—36.
4 52 Pa. Code § 69.265(3)(vi)
5 Section 69.265(9)(iv).
6 OCA's consultant, Mr. Roger Colton, discussed in the White Paper attached to the OCA's Comments, Pennsylvania may want to examine in its CAP Policy Statement as to integrating LIHEAP and CAP programs. Mr. Colton identified many issues that should be reviewed regarding the integration of LIHEAP and CAP including: (1) LIHEAP auto-enrollment; (2) expedited recertification; (3) balancing non-participant burdens with LIHEAP participation; (4) impact of applying LIHEAP to asked-to-pay amounts; (5) mandatory LIHEAP participation as a CAP pre-requisite; and (6) LIHEAP Crisis Grant recipients targeted for CAP participation. OCA Comments at 34, Appendix A, Colton White Paper at 28.
7 The Electricity Generation Customer Choice and Competition Act, 66 Pa.C.S. §§ 2801—2812, and the Natural Gas Choice and Competition Act, 66 Pa.C.S. §§ 2201—2212.
8 ''Churning'' is the practice of enrolling in CAP when the program amount is lower than actual usage and then leaving the program when the program amount is higher than actual usage.
9 Low-Income Advocates Comments at 32, citing 52 Pa. Code § 69.265(7)(i).
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