EXECUTIVE SUMMARY OF RATEPAYER ADVOCATE’S
PROPOSED FINAL AND INTERIM UNIVERSAL SERVICE PROGRAMS
Filed July 7, 2000, BPU Docket No. EX00020091
The following is an executive summary of the testimony of Roger Colton, a national expert on issues relating to universal service programs for low-income consumers, filed on July 7, 2000 on behalf of the Division of the Ratepayer Advocate, in proceedings before the New Jersey Board of Public Utilities to consider the establishment of a Universal Service Fund for the State’s electric and natural gas consumers. Mr. Colton’s testimony includes both a proposal for a permanent Universal Service program, and an interim proposal to be implemented for a 12-month period commencing with the 2000-01 heating season.
I. PROPOSED UNIVERSAL SERVICE PROGRAM
- Basic rate affordability assistance. Low-income consumers should receive a fixed credit based on a percentage of household income. The percentage of income considered affordable should be based on a sliding scale, depending on household income.
- Arrearage forgiveness. Arrearages should be forgiven over a period not exceeding two years, and should be subject to affordable customer co-payments.
- Crisis intervention assistance. A crisis intervention fund, coordinated with existing emergency benefits, should be provided.
- Customer outreach and intake initiatives. Specific outreach and intake initiatives are needed, including expanded implementation of the Chronicles computer screening tool (formerly Benefits Outreach and Screening Software ("BOSS")), and outreach to be provided to all utility consumers as part of the Utility Education Program. Intake and enrollment should be automated to the extent possible.
- Energy efficiency assistance. To the extent not funded through the utilities’ Societal Benefits Charges ("SBCs"), the low-income energy efficiency programs recommended by the Ratepayer Advocate in the Board’s Comprehensive Resource Analysis proceeding ("CRA") should be funded through the USF.
- An assistance in aggregation program. New Jersey should operate an assistance in aggregation program administered by an Independent Statewide Administrator ("ISA").
- A low-income guarantee pool. The Board should develop a mechanism to allow third-party suppliers to transfer some of their risks of non-collection to a guarantee pool.
- Based on the budget estimates in this testimony, the Universal Service Charge should be set initially at $0.00061 per kWh and $0.0046 per therm. If the low-income energy-efficiency program is included in the USF, the initial charge should be $0.00081 per kWh and $0.0057 per therm.
- The USF should be a statewide fund, which should be funded through a non-bypassable charge. The fund should be administered by the State Treasurer's office.
- The utilities’s recovery of costs through the USF should be limited to incremental costs, net of savings realized as a result of the universal service program.
- The Board should require the utilities to submit reports tracking both the performance of the universal service program and the impact of competition upon low-income consumers.
- Utilities should provide outreach and education on the universal service program as one component of their overall natural gas and electric restructuring consumer education. Funding for this education should be derived from the restructuring consumer education budget.
II. INTERIM UNIVERSAL SERVICE PROGRAM
- Basic rate affordability assistance. Low-income consumers should receive a fixed credit based on a percentage of household income. This credit would be determined in the same manner as proposed in the Ratepayer Advocate’s proposed permanent Universal Service program.
- Arrearage forgiveness. Consumers receiving basic rate affordability assistance would also be eligible for arrearage forgiveness credits up to $10 per month.