Massachusetts Low-Income Utility Discounts to Escalate

Low-income gas and electric utility bill discounts in Massachusetts will increase effective November 1.  This is a result of an order released September 15 by the state’s Department of Public Utilities (DPU) requiring utilities to file new low-income discount rates that restore the percentage value of those discounts to their level as of 1998. 

During 2007 the value of the discounts was over $58 million, according to the state’s LIHEAP leveraging report, and over 268,000 households received them. However, since 1998, their actual value has eroded considerably due to higher commodity prices. Specifically, Massachusetts’ residential natural gas prices have increased 64 percent between 2002 and 2007 and average electricity prices have jumped at least 52 percent. The escalating prices had prompted the DPU in February 2008 to open an investigation into expanding low-income consumer protections and assistance, including standards for arrearage management programs, the discount rates, service termination, and energy efficiency programs.

Comments filed by the utilities, the Massachusetts Energy Directors Association, the Low-Income Weatherization and Fuel Assistance Network, and others almost unanimously supported the need to expand the discounts. Utilities were to file their new bill tariffs by October 15. While the exact impact of the new discounts is unknown, it’s estimated their aggregate value will increase by tens of millions of dollars, according to the National Consumer Law Center, one of the groups advocating expanded discounts.  

Per the order, the utilities are also required to expand their pilot arrearage management programs to every low-income customer with a sufficiently large arrearage. Since 2006 gas and electric utilities have been required to have arrearage management programs targeted at low-income consumers with overdue utility bill balances. Enrollees agree to an affordable payment plan and, in return, receive some forgiveness of their debt. Approximately 3,500 customers were enrolled in the program in 2006.

The DPU will continue to operate a Best Practices Group that will discuss and make further recommendations regarding arrearage management programs and the low-income discount by December 1, and in a future proceeding it will address expanding protections for low-income consumers. 

Source: DPU, NCLC

Page Last Updated: October 23, 2008