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State PBF/USF History, Legislation, Implementation

Utah

Last Updated: April 2016
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Rate Assistance

Low-income electric and natural gas customers in Utah receive assistance through two separate programs.

The Home Electric Lifeline Program (HELP) provides qualified Rocky Mountain Power customers with a $12.60 discount off their monthly electric bills. In 2014, about 27,700 households received discounts that totaled over $3.65 million.

Questar Gas offers a gas discount, which provides qualified customers with a one-time $61.50 credit per year. During 2014, over 28,000 customers participated in the EAF, which provided over $1.72 million in bill credits.

History

The Utah Public Service Commission (PSC) established electric rate assistance in 2000 with its order in Docket 99-035-10 regarding PacifiCorp. The utility, which currently does business in Utah as Rocky Mountain Power, is the largest electric provider in the state, serving 80 percent of all electric customers.

Prior to issuing the order, the PSC created a Low-Income Task Force to examine various issues regarding electric rate assistance programs, including: eligibility requirements; programs in other states; measures to evaluate programs; a cap on how much money could be raised and spent; how to calculate the charge on customers; and which customers would pay for the program.

In December 1999, the task force reported back to the PSC. It announced that the "diversity of the economic and ideological interests" participating in the task force prevented it from reaching agreement on an assistance program. However, Salt Lake Community Action Program and Crossroads Urban Center, two advocacy groups, continued asking the PSC to establish a rate assistance program.

In their proposal, the two advocacy groups based eligibility on the guidelines used for Utah's LIHEAP program. The groups estimated their program would cost approximately $1.8 million per year, plus administrative costs of about $50,000 per year. They proposed that all customers would pay a charge based on usage to support the program. Residential customers with the lowest usage would have their charge capped at somewhere between $0.13 and $0.19 a month.

The PSC combined the advocates' proposal and the information contained in the Low-Income Task Force's report. In May 2000, it determined that it was "in the public interest to have a Lifeline program in Utah" and ordered its implementation. The PSC specifically addressed criticisms raised about non-program customers footing the bill. It said the new HELP was similar to a program it had already approved for telephoneIn summarizing its position, the Commission noted, "Examples abound to demonstrate that one person's improper 'social welfare' program is another person's legitimate regulation of utilities in the 'public interest.'"

In addition to implementing HELP, the PSC capped its funding at $1.8 million per year. The HELP surcharge would be paid by all Rocky Mountain customers, except those enrolled in the program. The PSC charged the Utah Housing and Community Development Division (HCDD), the state's LIHEAP grantee, to administer the program. HCDD encourages Rocky Mountain customers to apply for LIHEAP and HELP at the same time. Currently, both programs are open to households whose earnings are at or below 150 percent of federal poverty guidelines. Eligible households receive a monthly discount of $11 on their bills.

Legislation passed in 2009 (SB 75) increased participation in HELP, which increased costs beyond the established surcharge. In 2011, the PSC approved a three percent increase in the surcharge, raising the monthly charge from $0.23 per month to $0.26 for residential customers. The company projected the charge would bring in approximately $4.5 million annually for HELP, including a $30,000 payment to HCDD for administering the program.

While most low-income electric customers have had access to assistance since 2000, assistance for gas customers is more recent. As part of a 2007 rate case for Utah's largest natural gas provider, Questar Gas, the PSC ordered the company to convene a task force to identify ways to keep low-income customers on Questar's system.

The Low-Income Task Force submitted its report to the PSC on Dec. 1, 2009. It examined various ways to assist low-income customers and looked at programs in other states. Members initially focused on five potential approaches -- a discount on customer bills, arrearage assistance, expedited payment (pay stations), consumer counseling, and credit/collection policies. The group quickly narrowed down the list to the top two choices -- a rate discount and arrearage assistance. The task force reached consensus that a rate discount was the most viable option, but it also agreed that supplementing the discount with an arrearage assistance program should be a possibility. It said Questar shouldn't be responsible for determining eligibility for the discount, recommending, instead, that administration and intake be done through HCDD.

In July 2010, the PSC established what is now called the Questar Gas Discount (formerly known as the Energy Assistance Program). The initial funding target for the program was $1.5 million. A surcharge based on usage would appear on all customers' bills, except for those receiving the discount. The PSC tasked HCDD with determining eligibility and administering the program. The initial discount was an annual $37 credit for eligible customers.

In 2011, Questar returned to the PSC and claimed the program was overfunded at the $1.5 million level. It proposed decreasing the regular residential customer's bill by $0.04 a year. At the same time, the company wanted to raise the annual discount for eligible customers from $37 to $52. Questar said that was possible because of a "projected decrease in participants due to funding cutbacks at the qualifying agencies." The PSC approved the change. The discount now sits at the one-time annual payment of $61.50.

Energy Efficiency

As with rate assistance, the largest electric and natural gas utilities in Utah provide energy efficiency programs for all customers, including low-income.

Both Rocky Mountain Power and Questar Gas have large conservation and efficiency programs, which are funded through charges on ratepayers. The only efficiency programs directed specifically to low-income customers are for weatherization assistance. The funding goes to the HCDD, the Weatherization Assistance Program (WAP) grantee, and is used to supplement that program.

Rocky Mountain operates over 10 different energy efficiency programs that are funded through a Demand Side Management (DSM) surcharge. Its funding for low-income weatherization is passed through to local weatherization agencies, via HCD, to be used for eligible customers. The company spent approximately $162,859 on low-income weatherization during the 2014 program year.

Like Rocky Mountain Power, Questar Gas offers numerous efficiency programs under its "ThermWise" brand. Also like Rocky Mountain, the only efficiency program dedicated solely to low-income customers is its weatherization program, which is administered by HCD. During the 2014, Questar spent about $877,000 for its low-income weatherization program.

The Questar money goes to HCDD and is only used for natural-gas related projects. In addition to providing high-efficiency natural gas furnaces, when needed, the funds are used for correcting problems such as gas leaks, high carbon monoxide levels, inappropriate venting of natural gas appliances and adjustment of natural gas appliances. Customers apply for these services through HCDD.

During the 2014 program year, the two companies' low-income weatherization funds provided services for about 2,400 households.

History

In 2003, the PSC approved a DSM Cost Adjustment for Rocky Mountain. It allowed the company to put a surcharge on customers' bills referred to as "Customer Efficiency Services." The Commission approved a 3 percent rate increase for Rocky Mountain in the form of the surcharge, which was expected to generate approximately $22.5 million.

In February 2012, Rocky Mountain asked the PSC to reduce the surcharge's rate from 3.6 percent to 2.4 percent. This proposed reduction was expected to reduce collection from $62.6 million to $41.5 million. The PSC ultimately decided to approve a rate decrease of 3.2 percent, which was projected to bring in $54.2 million during 2012.

By the end of 2014, funds for DSM programs were under-collected by $18.4 million and Rocky Mountain asked the PSC to approve an increase in the DSM surcharge. The PSC agreed and issued an order to increase the DSM surcharge to 3.62 percent, effective February 2015.

DSM approval was a key factor in developing Questar's energy-efficiency programs. In December 2005, the company sought approval of a "Conservation Enabling Tariff" (CET) and a DSM Pilot Program. In September 2006, the company and two other entities filed a settlement stipulation with the PSC related to the case. The parties involved agreed that creating the CET would remove barriers to successfully implementing DSM programs.

The PSC approved the settlement in October 2006. This resulted in an initial credit made by Questar to the CET account for $1.1 million, and $1.3 million of unused research funds went into the DSM account. Approval of the settlement also established a Natural Gas DSM Advisory Group to work with the company on developing energy-efficiency programs.

In December 2006, Questar proposed five DSM programs, which became the central programs for its ThermWise brand. One of the programs increased annual funding for Questar's Low-Income Weatherization Assistance Program from $250,000 to $500,000. The PSC approved Questar's DSM proposal and a $7 million first-year budget for the efforts in January 2007.

In 2009, Questar sought and received approval from the PSC (Docket No. 08-057-22) to increase annual low-income funding from $250,000 to $500,000.

More Information

Low-Income Task Force report

Utah Public Service Commission website

Rocky Mounting Power (PacifiCorp) DSM Annual Reports and Evaluations

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