Keeping the Heat On

Art Handy wrote a great op/ed piece on Rhode Islanders battling utilities during the winter months and the My Home Energy Rate Affordability Act which will help those who need it.

Every fall, families throughout Rhode Island struggle to pull together enough money to get their utilities turned on before the cold months. Each winter, we hear about another fire caused by a family keeping warm with their oven after losing their heat. More and more we hear about children struggling at school because they can’t sleep in their frigid apartments. Emergency rooms deal with the consequences of a system that allows children to go months without heat and electricity.

In the last year, over 30,000 homes – a record high – had either gas or electricity shut off. While many shutoffs are in the cities, the affluent communities are also affected: in Westerly 612 homes were shut off. East Greenwich had 270, Barrington 118, Newport 811, even Little Compton had 30. This problem isn’t happening somewhere else; it’s in your community.

Currently, all winter long, even if they can make payments, few families can keep up with their current bills and even fewer can make headway into eliminating the old debt. The result is that most end the winter in even greater debt and have their utilities shut off again when the moratorium ends.

A side effect of this cycle is that most available heating assistance is aimed at paying just enough to get utilities restored before winter. There is simply not enough money to help customers become current. Each year rising energy costs and the growth of that debt mean it costs more for the customer to reach the point where power is restored. This hopeless cycle leaves more than 30,000 Rhode Island households exposed to the risk of a cold, powerless winter every year and exhausts public assistance funds.

Read the full article here or after the jump.

The only way to stop the cycle is to address the underlying debt. My Home Energy Rate Affordability Act (2009-H 6079, 2009-S 0490 (Josh Miller)) is aimed at doing exactly that through discounts, subsidies and debt forgiveness in exchange for customers’ sustained effort to pay what they can afford.

The program works this way: Qualified customers – the elderly, the disabled and those with income at or below 150 percent of the federal poverty level ($31,800 for a household of four) – would pay 6 to 8 percent of their income, slightly more than the amount that goes toward utilities in a median-income household. They would pay that amount throughout the year, even in summer, to reduce their debt. They would be allowed that rate only for a basic level of heat and energy, so they must conserve. They must make these payments fully for 36 months for their remaining debt to be forgiven.

This program would be funded partially through existing programs and through a modest surcharge pf $1.40 a month per meter for all residential and small business customers – amounting to $16.80 annually per meter.

Some would argue against adding anything to the rising cost of utility bills. However, in addition to helping the poorest, this program would actually help stabilize utility rates for everyone because it would result in fewer customers failing to pay at all. Currently, those who cannot afford to pay enough to get their service restored are unlikely to pay anything. Their debt is then absorbed by all other ratepayers. Under this plan, those customers would be less likely to get shut off again, and more likely to pay every month, even in the summer months when they might otherwise have less incentive.

There are few families in Rhode Island for whom $16.80 a year is going to make the difference between eating or not, which college their child attends, or whether they make their mortgage payment. However, there are many families for whom this program would absolutely make the difference between freezing all winter or not. For them, it could also mean the difference between health and sickliness. It can enable their children to sleep comfortably and go to school prepared. It can mean they stay in their homes instead of shelters or packing in with friends. It can mean that adults can concentrate on work instead of seeking warm shelter.

Allowing the less fortunate to pay a reasonable percentage of their income for utilities frees up some of their income for other necessities like food and rent. That spending would have a positive effect on the local economy.

This proposal doesn’t cost ratepayers much and has no effect on the state budget. But its impact on poor families will be overwhelming. I sincerely urge my fellow lawmakers to adopt this plan in the upcoming return to session.

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