Last Updated: July 2016
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Washington's utility landscape is somewhat unique. Like other states, it includes investor-owned utilities (IOUs), municipals, and cooperatives; however, it also features Public Utility Districts. PUDs are community-owned, locally-regulated utilities created by voters in the 1930s and 1940s.
All these entities provide significant low-income resources. As shown below, in 2014, the state's utilities provided more than $44.51 million in low-income rate assistance to over 108,000 low-income households. The following table presents totals by utility type.
Type of Utility Funding Households Public Utility Districts At least $9.71 million Over 29,000 Investor Owned At least $24.1 million Over 54,000 Municipals/Cooperatives At least $10.7 million Over 25,000 Sources: 2014 information from utilities
Washington's rate assistance programs vary greatly, particularly when it comes to their interaction with LIHEAP. The IOUs run their programs through the same community action agencies that administer LIHEAP. Both Puget Sound Energy's "Home Energy Lifeline Program" (HELP) and Avista Utilities' "Low-Income Rate Assistance Program" (LIRAP) have an "either/or" relationship with LIHEAP. While the guidelines of the programs vary a little, customers can receive either LIHEAP or the company's program when they apply for energy assistance at a local agency. The programs are designed to allow more households to access some form of energy assistance.
In October 2015, Avista began a special pilot program designed to help seniors and customers with disabilities living on fixed incomes. The “Rate Discount Pilot Program” is set to run through September 30, 2017, and is limited to 800 customers with incomes between 126 percent and 200 percent of federal poverty guidelines. The program is only available in four Washington counties.
Most of the other utility programs, whether funded by municipals, cooperatives or PUDs, rely on local LIHEAP administering agencies for intake and eligibility determination. In most cases, a customer can get a LIHEAP grant and access the utility's discount program.
Most of the PUDs currently offering some form of low-income discounts provide them only for seniors and people with disabilities. Until the late 1990s, these were the only discounts they could offer based on statute. However, the Washington Legislature amended the law in 1998 to allow PUDs to offer discounts to all low-income customers. Currently, Clark Public Utilities and Snohomish County PUD offer low-income discounts to all qualifying households. The Snohomish PUD automatically enrolls customers receiving LIHEAP into one of its discount programs. The following table gives a general break down of the low-income discounts offered by PUDs.
Low-Income Discounts Offered by Washington PUDs PUDs Offering Some Form of Discount 14 PUDs Offering Low-Income Senior Discount 14 PUDs Offering Low-Income Disabled Discount 10 PUDs Offering General Low-Income Discount 3 Source: LIHEAP Clearinghouse, Review of PUD Websites
Finally, the cities of Seattle and Tacoma, in addition to several smaller Washington cities, offer low-income discounts. The largest is Seattle City Light's "Utility Discount Program" (UDP), offering a 60 percent discount on electric bills. It is available to households at or below 70 percent of state median income.
In April 2012, the city announced a push to increase enrollment in the UDP, noting that only about 20 percent of those eligible for the program were using it. This was due, in part, to people being unaware of it, and because the application process was cumbersome and time-consuming. The city posted a simplified application form on its website.
Seattle City Light also offers the "Emergency Low Income Assistance" program to eligible customers facing disconnection. It is available when LIHEAP funds have been used up or are no longer available.
Tacoma Public Utilities provides a 30 percent discount to elderly (62 and older) and disabled low-income customers with incomes at or below 200 percent of FPG.
The 1999 Washington Legislature passed Engrossed House Bill 1459, which allowed the Washington Utilities and Transportation Committee (WUTC) to approve discounts for low-income customers of IOUs, but only if a utility proposed such a program. While the bill established a framework for these programs, the governor vetoed those parts of EHB 1459, saying they added "legal ambiguities" that weren't "necessary to fulfill the policy intent of the legislature." This left it up to the utilities to not only decide if they wanted to offer low-income rate assistance but also gave them wide latitude in designing such programs.
EHB 1459 came into play later that year when Avista filed a rate case in October 1999. During the case, Spokane Neighborhood Action Programs (SNAP) proposed a one percent surcharge to fund low-income programs. However, Avista did not support it, leading the WUTC to concur due to the new law's requirement that a utility had to request low-income program creation.
The 2009 Washington Legislature nullified this requirement through the passage of Substitute Senate Bill 5290, which allowed any party to a rate case to seek an assistance program.
After Avista's refusal to start a rate-assistance program in 1999, Pacific Power (PacifiCorp) became the first IOU to file a request (UE-002063) with the WUTC to offer one as part of a rate-case settlement in January 2001. Its "Low-Income Bill Assistance" (LIBA) program provided monthly tiered discounts to low-income customers for usage over 600 kilowatt hours during the winter (November through April). PacifiCorp based the tiers on income eligibility related to federal poverty guidelines: 0-75 percent; 76-100 percent; and 101-125 percent. The lowest income bracket received the highest discount. For the first three years, participation was limited to 2,400 households on a first-come-first-serve basis. Over the years, LIBA's funding level increased as part of rate cases. The money went to increasing the amount of the discounts, allowing more customers to participate, or a combination of both.
In 2010, PacifiCorp proposed (UE-100749) raising LIBA funding by almost 21 percent (the same increase sought in its overall rate case) and using 70 percent of the increase to raise the discounts offered and 30 percent to add customers to the program (from 4,475 to 4,720). The company also proposed raising the cap on income eligibility in the highest discount tier from 125 percent of the federal poverty level to 150 percent.
The WUTC ruled in March 2011 that LIBA funding would increase by 21 percent. The WUTC ordered that LIBA eligibility stay at 125 percent, believing that having different levels for LIBA and LIHEAP (which was at 125 percent) could "create confusion and increase administrative costs." The WUTC did not state whether the increased funding would be used to increase LIBA participation or discounts. Instead, it ordered PacifiCorp and other parties, including the Energy Project (a nonprofit that works with all stakeholders statewide to leverage more low-income energy resources through advocacy, intervention, training, and creating partnerships), to work together to figure out a solution.
The final product of their efforts became part of UE-111190, which was decided in 2012. During the rate case, the Energy Project introduced what the parties developed to resolve three LIBA issues: 1) the level of discount received by participants; 2) how to increase the number of customers in LIBA; and 3) the need to increase the fee paid to the local agencies to certify customers. The Energy Project said the parties involved established a gradual framework for changes over the next five years. The agreement projected LIBA participation growing 25 percent by 2016, and the monthly bill discount increasing by about 10 percent. The final agreement suggested that local agencies implement a modified two-year certification process for LIBA participants to help lower program costs.
In March 2012, the WUTC issued its final order in EU-111190, approving the LIBA agreement. In addition to the points noted above, the WUTC extrapolated on the benefits of the two-year certification. It pointed out that a maximum of 4,720 customers would be certified in a given year; however, there was no limit on the number of customers that could participate in the program during a given year (since certification would be good for two years). PacifiCorp was also allowed to raise eligibility of its top discount tier to 150 percent of federal poverty guidelines from 125 percent.
Avista started LIRAP soon after PacifiCorp's LIBA program was up and running. Authorized by the WUTC in 2001 (UE-010437 and UG-010437), Avista proposed creating a customer surcharge to fund LIRAP as part of changes to the company's Demand-Side Management (DSM) portfolio. SNAP supported Avista's creation of LIRAP, stating there had been a 70 percent increase in natural gas prices in the last year that had burdened low-income households. It noted that, unlike a rate discount, LIRAP wouldn't deepen the subsidy to the same household. Instead, LIRAP would "increase substantially" the number of households receiving energy assistance since it would work hand-in-hand with LIHEAP.
While PacifiCorp runs a discount program, Avista's LIRAP collects funds via the customer surcharge, and the money is distributed as grants to local community action agencies, which administer both LIRAP and LIHEAP. When low-income customers apply for energy assistance, they receive funding from either LIHEAP or LIRAP. In Avista's 2012 rate cases (UE-120436), the company agreed to continue discussions with stakeholders about possibly changing LIRAP from a grants-based program to a LIBA-type discount.
A rate-case settlement in June 2002 (UE-011570) established Puget Sound Energy's (PSE) HELP as a supplement to LIHEAP. If a household qualifies for LIHEAP, it receives LIHEAP instead of HELP. However, if LIHEAP qualifications are met but LIHEAP funds have been exhausted, the household can receive HELP. If a household doesn't meet LIHEAP qualifications but is under the income ceiling for HELP (50 percent of the area's median income), it receives HELP. The 50 percent of the area's median income generally fluctuates between 125 percent and 150 percent of federal poverty guidelines.
During a rate case decided in 2012 (UE-111048), advocates successfully called on the WUTC to increase HELP funding. They reported PSE devoted the lowest percentage of revenue to payment assistance when compared to other IOUs, spending 0.51 percent of its revenues versus Avista's 0.82 percent. They asked the WUTC to order PSE to spend 0.665 percent, the midpoint between the two figures.
When the WUTC issued its ruling in May 2012, it said testimony made it clear that low-income customers in PSE's service area needed more assistance, especially in "the context of the sluggish economic recovery and PSE's request for frequent rate increases." It ordered PSE to increase funding of HELP to 0.665 percent of revenue. The change took effect in October 2012.
Cascade Natural Gas Corporation created its rate assistance program as part of its 2006 rate case (UG-060256). During the 2006 rate case, the Energy Project supported creating the program, noting that Cascade's rates had increased 72 percent between August 2000 and November 2005, and the utility was seeking another 9.5 percent in 2006. Cascade's Washington Energy Assistance Fund (WEAF) sets eligibility between 125 percent and 150 percent of federal poverty guidelines.
A major area of contention in UG-060256 was that Cascade wanted a waiver from the "prior obligation" rule. The Washington Administrative Rules (Washington Codes 480-90-123 and 480-100-123) state that a company cannot refuse service to a customer due to an outstanding balance when service was disconnected. The rules say gas companies must reconnect service when a customer has paid all appropriate deposit and reconnection fees. Cascade claimed that "some customers who are able to pay choose instead to invoke their rights under the 'prior obligation' rule." It asked for a waiver from this rule, so it could be certain that WEAF went to "provide benefits to those in need."
The Energy Project opposed the waiver for a few reasons. Since Cascade was asking for a change in an established administrative rule, the Energy Project said it seemed that such a change would need to go through a traditional rulemaking process. Also, the Energy Project pointed out that there was no "logical nexus between amending the rule and funding low-income assistance" and there was "no reason to hold off on funding low-income assistance." In response, Cascade agreed that a general rulemaking proceeding might be the best way to address prior obligation and decided not to pursue it as part of the overall rate case.
In 2014, IOUs spent more than $6.5 million on low-income energy efficiency. Many of the IOUs participate in the state-funded Matchmaker Program, that provides a state match to energy-efficiency funding from utilities and other sources, and thereby helps supplement the states' Weatherization Assistance Program. Started in 1987 with funds from an oil overcharge settlement, the Washington Legislature has authorized the use of state Matchmaker funds since 1991. In recent years these funds have averaged about $5 million annually.
Utilities have supported energy efficiency in Washington at least since 1995, when the WUTC approved an Avista proposal for a distribution charge on electric customers to fund energy efficiency.
In 2006, voters passed Initiative 937, which established the "Energy Independence Act". The act required electric utilities serving more than 25,000 customers in Washington to obtain 15 percent of their electricity from renewable resources by 2020 and undertake cost-effective energy conservation. The WUTC reports that most of the current natural gas conservation programs were implemented as companions to the required electric-service programs. Within their efficiency portfolios, all the IOUs offer some form of low-income weatherization services that are administered by local community action agencies, which also carry out the state's Weatherization Assistance Program.
In June 2012, Avista asked the WUTC to let it suspend its natural gas efficiency programs, saying low natural gas prices provided "new challenges to offering a comprehensive" natural gas portfolio. For its low-income weatherization, the utility said it would honor all its existing 2012 contracts with community action agencies but said no additional gas measures would be funded as of Jan. 1, 2013. Advocates opposed the move, questioning how Avista was determining the cost effectiveness of its gas programs and calling the suspension of the offerings short sighted. In April 2013, the company withdrew its proposal to suspend its gas programs.
For More Information
Washington Utilities and Transportation Commission's Energy Page
Eastern Washington University, Assessing Heating Assistance Programs in Spokane County, January 2010
Washington Utility and Transportation Commission, Prior Obligation Study, February 2012
Avista Utilities, Low-Income Energy Efficiency Report, Sept. 1, 2010