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State PBF/USF History, Legislation, Implementation

Maine
Last updated: September 2016
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Rate Assistance

Maine's Low Income Assistance Plan (LIAP) helps low-income customers of participating utilities pay for electricity costs through a credit or discount on their electric bills.

Each of the participating utilities has a different LIAP. For example, Central Maine Power's percentage of income program utilizes a formula that keeps electric bills within four to ten percent of a customer's total income. Bangor Hydro-Electric, now part of Emera Maine, provides a once per year credit, while other smaller utilities give low-income customers one or two discounts a year on their bills if they make regular payments during the winter

The Maine State Housing Authority (MSHA), the LIHEAP and weatherization grantee, administers individual LIAPs in conjunction with its delivery of LIHEAP. Eligibility for LIAP is contingent on LIHEAP eligibility.

By the end of FY 2015, 11,093 households were receiving LIAP benefits. Total funding for the year amounted to over $8 million. In addition to LIAP, recipients that use an oxygen pump or ventilator for at least eight hours per day can receive assistance with the cost of operating these units. In FY 2015, the program spent $176,646 for 398 recipients using these units.

Since 2011, one gas company, Unitil, has provided a 30 percent rate discount to its LIHEAP-eligible households. Estimated cost of the discount is $155,000 per year for about 600 households.

A statewide Arrearage Management Program (AMP) became effective April 19, 2015 through an order that adopted a new rule, Chapter 317, which defines the requirements and procedures for the AMP. Utilities were required to implement AMPs by October 1, 2015 for LIHEAP-eligible residential customers that have arrearages of $500 or more. Arrearages must be at least 90 days old to participate in the program. AMP participants will have 1/12th of their arrearages forgiven each month, up to $300, if they pay their current bill on time.

The Maine Public Utilities Commission (MPUC) is required to prepare a report assessing the effectiveness of the AMP no later than January 28, 2018. If no legislative action to extend AMP is implemented, it will be repealed on September 30, 2018.

History

Maine's restructuring law states that:

"In order to meet legitimate needs of electricity consumers who are unable to pay their electricity bills in full and who satisfy eligibility criteria for assistance, and recognizing that electricity is a basic necessity to which all residents of the State should have access, it is the policy of the State to ensure adequate provision of financial assistance."

The 1997 legislation continued separate rate assistance programs, amounting to about $5.6 million yearly, which had been required of the three largest electric utilities since 1991. It also directed the Maine Public Utilities Commission (MPUC) to oversee the implementation of a statewide assistance program for low-income electricity customers.

The result was the MPUC's adoption of a Statewide Low-Income Assistance Plan in July 2001. The plan, set forth in Chapter 314 of the MPUC's rules, required each of Maine's transmission and distribution utilities to create or maintain a LIAP for its customers by October 31, 2001.

These rate assistance programs are funded by one-half of one percent of each utility's annual revenues, subject to change in periodic rate cases. Chapter 314 created a central fund to finance the statewide plan and apportioned the fund to each utility. Each utility contributes money to the central fund based upon the number of residential customers residing in its service territory. The funds are then redistributed to the utilities based on the number of customers eligible for LIHEAP in each service territory.

Initially, the MPUC and some of the stakeholders favored a single, uniform assistance program, called the Electric Lifeline Program, similar to one of the same name operated by the largest utility, Central Maine Power (CMP). Like the CMP program, the proposed program would have used a percentage of income approach, in which participants' electric bill payments are based on their income, and those at the lowest income level pay a lower percentage than those at higher income levels.

However, after two rounds of hearings, comment periods and rule makings, the MPUC's final rule "represents a series of compromises that were necessitated, in part, by the need to get the statewide program in place by October 1, 2001." Utilities with existing low-income programs have continued those programs, and consumer-owned utilities developed their own LIAPs within the requirements of the rule. The MPUC left open the possibility that it can amend its rule to change the program, if necessary.

The rule required that LIAP benefits be stratified so that participants with the greatest needs receive the highest benefits. Each LIAP that does not employ a percentage-of-income benefit structure must have a minimum of four separate benefit categories based on the federal poverty guidelines. The rule also requires that each LIAP track any changes in LIHEAP, such as an increase in the eligibility requirement, which may affect customers' LIAP eligibility.

In its initial years, total LIAP funding amounted to between $5 and $6 million annually. In May 2006, the MPUC voted to increase LIAP funding by 20 percent to about $7 million yearly, effective October 1, 2006, to help low-income consumers keep pace with rising electricity rates. In August 2008, again in response to higher electric rates, the MPUC increased LIAP funding by another 13 percent, or $906,000, bringing annual funding to at least $7.9 million and boosting the average annual benefit from $175 a year to at least $200 a year.

Energy Efficiency

The Efficiency Maine Trust, created by state statute in 2009, consolidates funds for Maine's energy efficiency programs that encompass all fuel types.

Funding for the Efficiency Maine Trust comes from Maine's electricity customers through a system benefit charge (SBC) wherein electric utilities are assessed a fixed rate of 1.45 mills per kWh. Initially at least 20 percent of the SBC funds was required to be spent on low-income energy efficiency services; this was changed to 10 percent through the passage of LD-1559 in June 2013. Among other things, the bill reformed the Efficiency Maine Trust.

In FY 2015, there were two initiatives for low-income households, called the Low-Income Direct Install Initiatives. The first initiative provided over $1.2 million for electric and thermal measures. These measures included heat pump water heaters, ductless heat pumps, low-flow shower heads and CFLs, which were installed in 635 low-income households throughout the state. This initiative was funded by the SBC, the Maine Yankee Settlement and the Regional Greenhouse Gas Initiative (RGGI). The Maine Yankee Settlement is a settlement with the federal government for the storage of spent nuclear fuel. The Efficiency Maine Trust receives funds from the settlement to supplement the SBC. Proceeds from carbon dioxide allowances that are auctioned through the RGGI are transferred to the Trust Fund.

The second initiative, funded by an assessment on Unitil natural gas customers, provided $76,138 for air sealing, insulation, and high-efficiency heating systems for seven low-income households located in Unitil territory. Both low-income initiatives were implemented through a partnership between the Trust and Community Action Agencies.

History

Since January 2004, Efficiency Maine has been the state's portfolio of energy conservation programs for all customer classes, which included the Low-Income Appliance Replacement Program (LIARP). These programs were mandated by Maine's 2002 Act to Strengthen Energy Conservation, which replaced some of the conservation stipulations in the state's restructuring law.

The LIARP was implemented through the MSHA and the state's community action agencies. Through on-site visits, the agencies monitored refrigerators and freezers in income-eligible homes and replaced them with high-efficiency refrigerators if the old units were found to be highly inefficient. While at a residence, workers also replaced incandescent bulbs, halogen lamps and torchieres with compact fluorescent light bulbs (CFLs) and provided information on how to save energy.

Refrigerator replacements began as a $300,000 pilot program and at its busiest year had a budget of $2.5 million. In FY 2011, the program delivered 534 refrigerators and 6,761 CFLs to 585 low-income households at a cost of $325,515 and a benefit-to-cost ratio of 1.43 to 1. The program slowed down as homes meeting the eligibility requirements became harder to find and, as of December 31, 2011, the program ended.

Also during 2011, administration of Efficiency Maine programs was transferred from the MPUC to the independently managed Efficiency Maine Trust that was created by statute in 2009. The purposes of creating the Trust included consolidating consumer efficiency programs for all fuel types and integrating delivery of electric and thermal efficiency measures so customers can have a one-stop shopping experience. Activities during 2012 transitioned from appliance replacement to energy-efficiency upgrades in electrically-heated multifamily homes.

During FY 2014, low-income energy efficiency programs focused on efficiency upgrades for multifamily dwellings. The Maine Efficiency Trust provided funds for the upgrades through the SBC and natural gas utility assessment. Efficiency measures provided through the Low Income Multifamily Weatherization Program included high-efficiency heat pumps and hot water saving measures for electrically-heated units; heating system upgrades for natural gas heated properties; and efficient lighting and envelope improvements for both electric- and gas-heated units. The 2014 budget was about $2.1 million for electric projects and $664,780 for natural gas projects. This program was discontinued by the end of FY 2014 because all of the eligible electrically-heated multifamily properties had received upgrades.

In FY14, the Trust also administered funds for two programs for low-income single family homes: the Efficient Central Heating Improvement Program (E-CHIP) and the Low Income Heat Pump Initiative. E-CHIP complemented MaineHousing's Central Heating Improvement Program (CHIP). CHIP is implemented through the Community Action Programs (CAPs) and provides repair or replacement of heating systems that present health and safety issues to low-income families. The CHIP funds the lowest cost replacement heating units, which are typically not the most efficient. The E-CHIP program paid 100 percent of the incremental cost of providing a heating system that met ENERGY STARĀ® efficiency standards. In FY 2014, 44 heating systems in the CHIP were upgraded to efficient models at a total cost of $75,363. Because of the small volume of replacements under the E-CHIP initiative, the program was discontinued E-CHIP in FY15.

The Trust worked with the CAPs to develop the Low Income Heat Pump Initiative in FY14. The CAPs identified eligible homeowners, based on income and high fuel usage, to receive heat pumps. In FY 2014, the program installed 123 high-efficiency heat pumps in LIHEAP-eligible homes at an average cost of $3,068 per unit.

More Information

Maine Public Utility Commission 2015 Annual Report

2015 Efficiency Maine Annual Report

Chapter 317 Statewide Arrearage Management Program (Effective 4/19/2015)

Order adopting Chapter 317, April 9, 2015

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