Last updated: September 2018
Go to Summary
Oregon's restructuring legislation, SB 1149, was signed into law in July 1999 and provided for about $18 million in new funding for low-income energy assistance and weatherization programs.
The legislation authorized collection of money for low-income electric rate assistance through a meters charge on residential and commercial/industrial customers of the state's two investor-owned utilities, PGE and PacifiCorp. Funding for OEAP comes from fees added to customers’ utility bills. The rate is approximately $0.84 per meter for residential customers and not more than $500.00 for commercial/industrial customers. The funds are distributed by the Oregon Energy Assistance Program (OEAP).
In June 2011, the governor signed SB 863 that directs electric companies to collect an additional $5 million per year for low-income electric bill payment assistance if at least two of the following economic conditions are met during the previous 12-month period:
- unemployment rate exceeded 10 percent for at least 6 months
- the poverty rate exceeded 12 percent
- the LIHEAP allocation is 75 percent or less than the previous year's allocation
- the number of Oregon households receiving SNAP exceeded 20 percent during the previous 12-month period
The $5 million in additional funds cannot be collected for more than 12 months after the initial findings unless additional conditions have been met and, then, not more than 24 months. The additional funds are collected only from residential customers; commercial/industrial customers were excluded from the legislation.
The Oregon Public Utility Commission (PUC) has instructed utilities to collect an additional $5 million three times. The first authorization was in PY 2012 after the poverty rate exceeded 12 percent and unemployment exceeded 10 percent during the previous 12 months. To pay for the additional funds, the PUC directed a 12-month temporary meter charge increase of $0.35 per month starting October 2011. The collection was re-authorized for PY 2013. The PUC authorized another two-year collection period that ended October 4, 2015.
OEAP funds must be expended solely for low-income electric bills in the service area of the electric company from which the funds are collected. Income eligibility for OEAP is the same as for LIHEAP — 60 percent of state median income. Over $19.24 million assisted more than 40,553 households in PY 2016.
Additionally, legislation enacted in 2001(http://www.liheap.ncat.org/legislation/orra.htm) allows natural gas companies to collect funds through a meters charge for bill payment assistance; as a result, three gas utilities collect these funds. The largest utility, NW Natural, currently applies a 0.75 percent charge to residential customers' total energy bills for its Oregon Low-Income Gas Assistance Program (OLGA). During PY 2016, NW Natural spent about $2.5 million for assistance payments to 7,559 households.
Oregon's two smaller natural gas companies, Cascade and Avista, have similar programs. Avista’s Low-Income Rate Assistance Program is a ratepayer-funded program that provided $219,258 in grants to 708 households in PY 2016. Cascade’s program, Oregon Low Income Bill Assistance, delivered $43,652 in energy assistance payments to 194 households in PY 2016.
Consumer-owned utilities (public utility districts and municipal utilities) can choose whether to participate in restructuring. If they do participate, they are also obligated to collect the three percent public purpose charge from their customers. These utilities provide around $3 million per year for their low-income programs. However, more than 60 percent of this total is accounted for by a single utility, the Eugene Water & Electric Board, which commits more than $2 million each year to its limited-income programs.
The 1999 restructuring legislation established a $60 million Public Purpose Charge (PPC). About $7.8 million, collected through the PPC, supplemented the Weatherization Assistance Program (WAP) in 2014. Utilities provided another $1.5 million to WAP the same year.
The PPC is equal to three percent of the total revenues collected by participating electric utilities and funds "new cost-effective local energy conservation, new market transformation efforts, the above market costs of new renewable energy resources and new low-income weatherization." The PPC will be collected through 2026 by PGE and PacifiCorp — which serve 80 percent of the state's electric customers.
According to a 2015 report on the PPC, during the period from January 2013 through December 2014, about $10.1 million from PGE and $6.1 million from PacifiCorp were allocated to Oregon Housing and Community Services (OHCS), the LIHEAP and weatherization grantee, for two low-income weatherization programs. An additional $4.6 million from the two utilities was committed for projects that had not been completed.
Through the larger of the programs, which is called Energy Conservation Helping Oregonians (ECHO), low-income households that use electricity as their primary heat source can receive weatherization measures such as insulation, energy-related minor home repairs, air infiltration reduction, furnace repair and replacement, heating duct improvements and energy conservation education. (About 70 percent of Oregon's low-income households use electricity for heat.) Other households may receive education and baseload measures.
During January 2013 through December 2014, ECHO weatherized 2,110 homes with a combined estimated electricity savings of over 9 million kWhs. The majority of households served included elderly and disabled members and young children; these households are given priority for service.
The second program, multi-family rental housing, provides grants for the construction or rehabilitation of affordable rental housing. At least 50 percent of the units in the project must be rented to households whose income is at or below 60 percent of the area median income. Projects receiving funds must also remain affordable for at least 10 years. Program resources may be used for weatherization measures such as new windows and doors and insulation plus baseload measures including lighting and energy-efficient appliances. Around $1.5 million was spent on 15 projects during this period. About $1.3 million more was committed for projects not yet completed.
The overriding principle of both programs is that 1 kWh must be saved for every dollar spent, and their effectiveness is evaluated according to that measure.
Additionally, OHCS receives and administers PPC funds for low-income housing. A total of 4.5 percent of the PPC funds are dedicated to low-income housing development projects, either construction of new housing or rehabilitation of existing housing for low-income families through the OHCS Housing Trust Fund. Expended plus committed funds for low-income housing amounted to $6.3 million for 45 multi-family housing projects during January 2013-December 2014.
Since 2002, NW Natural has collected public purpose funding for its Oregon Low Income Energy Efficiency (OLIEE) program. In 2016, OLIEE, provided energy efficiency measures amounting to $1.46 million to 231 income-eligible households.
Effective November 27, 2013, several changes were implemented in the OLIEE: the cap on spending increased from $4,000 to $5,000 per dwelling; state or federal matching funds are no longer required; and up to 10 percent of funds may be used for energy education.
From late 2001 through 2007, the meters charge collected about $10 million annually for rate assistance. The amount was an attempt to bring the state's total bill assistance funding up to the level of LIHEAP funding in 1985, when Oregon received about $20 million for LIHEAP rate assistance.
Through the passage of SB 461 by the Oregon Legislature in 2007, the amount collected through the meters charge was increased from $10 million annually to $15 million, effective January 1, 2008. The law also allows that amount to change each year in accordance with the percentage change in the number of residential customers and certain business electricity sales.
The law stipulates that OHCS administer both low-income funding sources. OHCS distributes the funds through the community action agencies that operate LIHEAP and the WAP, but energy assistance is under a separate program called Oregon Energy Assistance. The law requires that priority assistance be directed to low-income electricity consumers of PGE and PacifiCorp in danger of having their electricity service disconnected. It also stipulates that bill payment and crisis assistance include programs "that effectively reduce service disconnections and related costs to retail electricity consumers and electric utilities."
Collection of the low-income portion of the PPC began on March 1, 2002. These monies are distributed through OHCS and, in addition to low-income housing programs, they fund two separate weatherization programs. The ECHO program is for energy efficiency for low-income households and is administered through the community action network; the second is designed to reduce the energy usage and utility costs of lower income tenants in multi-family rentals. All expenditures must be for customers of PGE and PacifiCorp.
Legislation enacted in 2001 allowed natural gas companies to collect funds through a meters charge for bill payment assistance. NW Natural initially collected funds through a 25-cent surcharge on all residential customer bills for its Oregon Low-Income Gas Assistance Program (OLGA). In May 2006, this charge increased to 31 cents and then, in a November 2008 filing with the Public Utility Commission, was revised from a flat rate to a 0.33 percent charge applied to residential customer's total energy bill.
A 2008 filing also allows a separate charge of up to 0.25 percent that can be allocated either to OLGA or the OLIEE program.
From October 2008 through October 2010, OLGA was funded by both the 0.25 percent charge and the 0.33 percent charge. Effective October 1, 2010, the 0.25 percent charge was redirected to funding OLIEE. At the same time, OLGA collections were raised by 0.25 percent resulting in no change in OLGA program funding.
OLGA funding was increased once again in 2012 when the Company filed its rate case (UG-221). As a result of this proceeding, the residential charge funding OLGA was increased from 0.58 to 0.75 percent.
Chapter 757, the latest version of the law authorizing the public purpose charge.
Report to Legislative Assembly on Public Purpose Expenditures, January 2013 - December 2014, Final 2-Year Report, March 25 2015, Evergreen Economics
OLGA Annual Report, NW Natural Gas, 2013-2014
OLIEE Annual Report, NW Natural Gas, 2013-2014
Low-Income Rate Assistance Program (LIRAP), Annual Summary Report, Avista, October 2013 through September, 2014
Low Income Bill Assistance Program Annual Report, Cascade Natural Gas, October 2013 - September 2014
Oregon Energy Assistance Program, Report to the 78th Legislative Assembly, Oregon Housing & Community Services, December 31, 2014