Last Updated: March 2016
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New Hampshire's statewide Electric Assistance Program (EAP) provides discounts on monthly electric bills of qualifying customers.
Electric restructuring legislation passed in 1996 authorizes funding EAP through a system benefits charge (SBC). The SBC is a variable charge based on the consumer's monthly usage that is applied to all electric utility ratepayers.
The current SBC, 3.3 mills per kilowatt-hour (kWh), supports energy efficiency and low-income bill payment assistance. For a residential customer using an average of 650 kWh per month, the monthly SBC is $2.15. The initial charge and allocation of the SBC between energy efficiency and low-income programs was designated by the legislature and was changed periodically based upon need (See History section below). The current law sets a cap on the low-income portion (1.5 mills per kWh) but sets no cap on the energy efficiency portion or the charge overall. The New Hampshire Public Utilities Commission has not raised the overall SBC since 2001.
The EAP began on October 1, 2002. During FY 2014, approximately $13.6 million in benefits were provided to EAP households. As of September 1, 2014, 34,444 households were enrolled in the program.
Tied to a percentage of the federal poverty guideline (FPG), the discounts are designed so that the portion of the bill for which the customer is responsible is between 4 and 5 percent of their income. There are five discount tiers: less than or equal to 75 percent of the FPG; 76 to 100 percent of the FPG; 101 to 125 percent of the FPG; 126 to 150 percent of the FPG; and 151 to 200 percent of the FPG.
Historically the discounts on customer bills ranged from 5 to 70 percent and were applied to the first 700 kWh of use per month. In June 2013, the EAP Advisory Board recommended the following changes to the EAP program design:
- Increase the kWh usage to which the EAP discount is applied from the first 700 kWh to the first 750 kWh of use each month
- Increase the EAP discount levels by 10 percent-from 8 to 77 percent-for 24 months.
The Commission approved these changes, and they went into effect August 14, 2013 (Order No. 25,544). The changes were implemented to spend down a surplus in EAP funds over the next 24 months. The surplus came about as enrollment declined between May and December 2012.
Further changes to the EAP went into effect March 2014 (Order No. 25,643). The Commission approved an increase in eligibility from 175 to 200 percent FPG and increased the discount percentages for three of the tiers.
Participating utilities work with six community action agencies located throughout the state to identify and enroll eligible customers for the statewide EAP. These agencies are also the local administrators of LIHEAP. Customers are certified as eligible to receive EAP benefits for 12 months or 24 months for participants 65 years of age or older.
Low-income natural gas customers have also received bill payment assistance since 2006. Income-eligible heating customers of Liberty Utilities and Unitil-Northern receive a 60 percent discount on the delivery portion of their bill. Customers must qualify for one of 13 means tested programs, including LIHEAP and the EAP. The Low-Income Gas Assistance Program serves about 5,500 households with an estimated annual budget of $1.6 million.
In addition to the EAP, the SBC funds energy efficiency programs. In May 2002, the New Hampshire Public Utility Commission ordered implementation of a CORE Energy Efficiency Program for all electric customer classes for 19 months. It included a $3.1 million low-income energy efficiency program that began June 1.
The CORE programs are divided between programs for residential customers and commercial and industrial customers (C&I). Program budgets are allocated to residential and C&I customers roughly in proportion to their respective SBC payments. The Home Energy Assistance (HEA) program provides weatherization and energy efficiency measures for low-income customers, often in coordination with, and as a supplement to, the Department of Energy Weatherization Assistance Program (WAP). The HEA program is administered by the utilities in conjunction with the community action agencies, which also administer the WAP.
When it released its order implementing the CORE programs, the Commission also issued an Order of Notice to investigate whether it would be in the public interest to re-institute energy efficiency programs by New Hampshire's two natural gas utilities, Northern Utilities (now Unitil) and KeySpan (now Liberty Utilities). In December 2002, the Commission approved a Settlement Agreement that allowed implementation of the natural gas companies' energy efficiency programs. The Commission now oversees the natural gas and electric CORE programs in a coordinated fashion.
The Commission issued Order No. 25,554 in DE 12-262, (July 26, 2013), which approved the following changes to the HEA, on a temporary basis:
- Increase the 2013 and 2014 HEA spending cap from $5,000 to $8,000 per customer.
- Expenditures above the $8,000 cap are allowed for the replacement of space heating equipment and combined space/water heating equipment. The customer's home must be weatherized first.
Households that also qualify for the WAP can receive additional energy efficiency measures from a combination of state and federal funds. Measures include insulation, air sealing, new thermostats, electric hot water measures, refrigerator replacement, lighting upgrades, health and safety measures, and a home energy audit and rating.
Low-income participants also receive energy efficiency education, including a review of their energy usage, and ways to reduce it. An auditor will also discuss advantages of efficient lighting and appliances, lifestyle changes that could reduce energy usage, and weatherization opportunities in the participant's home.
In 2014, about $3.9 million in program funds provided energy efficiency measures to 814 electric customers. The same year, over $1.1 million provided services to 535 income-eligible gas customers. Projected budgets for 2015 are almost $3.8 million for 393 electric customers and $1.1 million for 369 gas customers.
In recent years, CORE program budgets have been supplemented by funding through the ISO-New England's (ISO-NE) Forward Capacity Market auction - $2.6 million in 2014. About thirty percent of these funds are allocated to residential CORE programs. ISO-NE is an independent, non-profit Regional Transmission Organization serving six New England states. The ISO-NE conducts an annual auction to purchase enough qualified resources to satisfy the region's future needs.
As a result of the passage of HB 1490, beginning in January 2013, a portion of future Regional Greenhouse Gas Initiative (RGGI) auction proceeds will be allocated to the electric distribution utilities. RGGI is a coalition working to limit carbon dioxide pollution through a cap and trade system. Participating states limit the amount of CO2 that can be emitted by their power plants and auctions of CO2 emissions allowances are conducted quarterly. One dollar of each RGGI allowance sold will be awarded to electric utilities for CORE programs. HB 630, which became law on July 16, 2013, requires at least 15 percent of RGGI funds be allocated to CORE programs for low-income customers. In 2014, electric utilities received $724,899 in RGGI funds that provided services for 155 income-eligible households.
The EAP and the CORE Energy Efficiency Programs were implemented statewide during 2002 for customers of regulated electric utilities. The legislature had passed a restructuring law in 1996 that authorized a system benefits charge for such programs.
On May 30, 2002, the New Hampshire PUC issued an Order, Docket # DE 02-034, explaining its consideration of three different assistance program designs and adopting the tiered discount design. The order stated that the adopted design "strikes the best balance between cost efficiency and program efficiency" and that the program would reach several thousand more households than either of the other two proposals.
The tiered-discount program is a modified percentage of income plan. The tiers were originally structured to provide qualified low-income households with monthly electric bill payments equal to, on average, four percent of income for general use customers and six percent for electric heat users.
The early EAP also included a one-time pre-program arrearage retirement component for arrearages that were less than 24 months old. Only arrearages existing on or before August 31, 2002 were eligible for retirement. The program paid out over $500,000 in arrears forgiveness during its first three years. It was discontinued prior to FY 2005-06 so that more direct benefits could be paid.
The 2007 legislature removed that sunset date and continued the programs indefinitely.
The SBC, paid by all electric customer classes, initially totaled 3.0 mills per kWh and was divided between the EAP (1.2 mills) and the CORE Energy Efficiency Programs (1.8 mills).
Substantial changes were made to the program effective FY 2007. After asking stakeholders to review the program for possible changes, the PUC issued Order No 24,664 on September 1, 2006, incorporating a new program design that was based on consensus among the stakeholders including utilities, the state community action association, and the state utility consumer advocate. Among other things, the new design maintained the low-income SBC at 1.2 mills per kWh and employed a formula under which customers were responsible for electric bills equal to approximately 4.5 percent of household income.
In May 2005, partially in response to escalating natural gas prices, the Commission opened an investigation into the benefits of a low-income rate assistance program for natural gas customers. (Around 18 percent of New Hampshire's low-income households use natural gas as their primary heating fuel.) Both KeySpan/National Grid and Northern agreed that such a program was needed and that they would work toward implementing it for the winter of 2005-2006. Both utilities operated low-income discount programs in Massachusetts and both indicated they could pattern a New Hampshire program after their Massachusetts programs. After operating a one-year pilot, the Low-Income Gas Assistance Program began operating in 2006.
In 2005, the American Council for an Energy Efficient Economy (ACEEE) identified the Home Energy Assistance Program as an "exemplary" low-income efficiency program. It said the program uses holistic practices and state of the art software and data tracking. Because it is delivered by CAAs that also deliver the federal WAP, it leverages several different funding sources, allowing customers to receive more services than they would with a utility-funded program. It also achieves relatively high electricity savings per household, the ACEEE report said, because it prioritizes electrically-heated and other high energy use homes.
For more information:
Results And Effectiveness of the System Benefits Charge, Annual Report, NH PUC, October 1, 2014
Results And Effectiveness of the System Benefits Charge, Annual Report, NH PUC, October 1, 2015
Order Approving Changes to EAP Discounts and Income Eligibility Level, Order No. 25643, March 28, 2014
Order Addressing EAP Fund Surplus, Order No. 25,544, July 15, 2013