About 115,000 low-income households in Maine collectively need $126 million a year – more than five times what’s currently available – to help pay their electricity bills, according to a state report released Friday.
“We think that is woefully inadequate,” Public Advocate William Harwood said in an interview. “The question is where do you get the money?”
About $22.5 million in assistance is provided now, but fewer than half of those who need help are getting it, the Electric Ratepayer Advisory Council says.
Funding for the Low Income Assistance Program, administered by the Maine Public Utilities Commission, already increased by 50% from $15 million last year. Lawmakers and Gov. Janet Mills used $7.5 million from unappropriated surplus in the General Fund – the first time taxpayer dollars have been used to fund a program that has been financed by utility ratepayers.
The PUC also expanded income eligibility to households with incomes at or below 150% of the federal poverty level, or $45,000 for a family of four, which means an additional 46,000 Maine residents will benefit this season, the Governor’s Energy Office said. The low-income households represent roughly 15% of Maine’s approximately 739,000 housing units in the 2020 Census.
PUC Chairman Philip L. Bartlett II said the program’s funding has more than tripled from $8 million a few years ago and any further expansion will require policymakers to figure out how much ratepayers should pay to finance the program for the benefit of others.
“To increase it to $15 million we were weighing how much of an effect is on other ratepayers,” he said. “$100 million or more, that would be huge. You’re adding a significant amount to other people’s bills.”
Harwood said “virtually all states” require wealthier ratepayers to subsidize low-income ratepayers.
“It’s not getting as much resistance as getting moderate ratepayers to pay,” he said.
The Electric Ratepayer Advisory Council report recommends that the Legislature dedicate the state sales tax on electricity to LIAP funding, which Harwood said would raise $15 million to $20 million a year. The report said state officials should consider setting a consistent charge per kilowatt-hour for all ratepayers across all utilities to fund the program and increase its funding from ratepayers.
In addition, the report recommends converting the program to monthly discounts from an annual lump sum and establishing automatic enrollment for all state Department of Health and Human Services clients with household incomes at or below 150% of the federal poverty level.
Megan Hannan, executive director of the Maine Community Action Partnership, said a rising need for financial help is fueled by several factors that include higher electricity costs and the loss of COVID-19 relief after the pandemic retreated.
“There’s a dearth of support programs now and people aren’t getting richer,” she said.
One local community action agency has reported fielding 5,000 to 7,000 calls a week, Hannan said. As many as 900 calls were reported at an agency in January after a particularly cold weekend, she said.
Ratepayers in Maine and other New England states have historically faced the highest electricity rates in the U.S., according to the U.S. Energy Information Administration. Mainers last year paid an average of 17.44 cents a kWh, 41% more than the U.S. average of 12.36 cents, the agency said.
Relief is in sight for next year, though, following sharply lower rates approved by the PUC on Wednesday. The average monthly savings will be about 35% for Central Maine Power customers or slightly more than $30 per month.
New England relies heavily on burning imported fossil fuels such as natural gas to generate electricity. The fuels are costly and the region is at the end of the line along natural gas pipelines, contributing to the higher prices.
As policymakers and the industry reduce the use of fossil fuels, electrification will account for a larger portion of monthly energy bills, Bartlett said. The “flip side,” however, is that the per-hour cost of delivery is projected to fall, he said.
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