Energy Affordability Working Group Phase II Proposal Breakdown

The Backdrop: Despite the success of the State’s recent Electric and Gas Bill Relief Program (Phase 1), which eliminated $587 million of arrears (“past-due balances”) for low-income residential customers who were identified by their utility as Energy Affordability Program (“EAP”) participants, overall residential and small business arrears throughout the State remain far above pre-pandemic levels.

The Proposed Phase 2: In response, the Energy Affordability Policy Working Group (Working Group) has recommended that the Public Service Commission (PSC or Commission) adopt a second phase of relief directed toward those customers in arrears who did not receive assistance in Phase 1. The Working Group’s recommendations are provided in a report submitted to the Commission on December 23, 2022.

The Working Group’s report recommends a Phase 2 Utility Arrears Relief Program (Phase 2 program) that would provide one-time arrears credits of approximately $672.1 million across the State.
The credits would provide relief to all residential non-EAP customers who did not receive relief under the Phase 1 program, and all small-commercial customers with certain usage characteristics in arrears as of May 1, 2022 (hereby identified as “Phase 2 customers”). The credit is subject to an “up to” cap for each utility, which is designed to eliminate COVID-19 period arrears for at least 75% of eligible customers. For the relatively small group of customers with notably higher arrears amounts, the “up to” design of the credit should help make balances more manageable but would not cover the full arrears balance.
To ensure the efficient and effective implementation of relief, the Working Group proposes that assistance be provided automatically to all Phase 2 customers, instead of requiring an application or self-certification process. During implementation (at least through March 1, 2023 or 30 days after credits have been applied, whichever is later), the utilities would suspend residential terminations of service for non-payment.

A note on shareholder participation: While applauding these initiatives, PULP also notes that the Working Group proposes that $570.5 million, or 85%, of Phase 2 program costs be funded by ratepayers. This stands in stark contrast to the Phase 1 program, for which ratepayers were only responsible for approximately $234 million, or 40%, of program costs. (See, Tabe 4 on page 23 of the Phase 2 Report for the shareholder contributions by utility company)

PULP continues to urge that utility shareholders should assume a more equitable share of the cost burden for Phase 2. Low-income customers already face excessive energy burdens, which has worsened by the economic disruptions caused by the pandemic, inflation, and extreme weather.
As proposed by the Working Group, however, shareholder contributions would fund only approximately 12-15% of Phase 2 program costs — despite the fact that the utilities have been able to increase dividends to almost $1.6 billion during the pandemic.
PULP believes that a more equitable sharing of costs would be achieved by shareholders and ratepayers each assuming 50% of Phase 2 program costs.

*Public comments on the Phase 2 program are encouraged and can be emailed to: Secretary@dps.ny.gov or uploaded here.