1. CFA 2017 Consumer Assembly John Howat jhowat@nclc.org
Equity Policy Objectives and Utility Safety Net Components for the Evolving Energy System
CFA 2017 Consumer Assembly
John Howat

2. The Utility Industry in Transition: The more things change …
Generation and end-use technologies and economics
Advanced communication capabilities
Flat or declining electricity and natural gas sales in many regions
Utility business model assumptions in flux
Regulatory models and assumptions in flux
Higher rates in the short term from new infrastructure investments and transition to lower carbon generation
At this juncture it is hardly newsworthy that the utility and energy services industries and changing at breakneck speed.

3. … the more they stay the same
Home energy service remains a basic necessity of life
End uses
Heating and cooling
Lighting
Refrigeration
Communication
Uninterrupted access required to ensure health, safety, and effective societal participation
Home energy costs and benefits are regressively distributed
Access to energy efficiency, management, and distributed generation technologies is not an equal opportunity proposition

4. Energy Security Threat
Absent thoughtful rate design and implementation of the comprehensive set of safety net provisions, the evolving energy system will bring to lower income households higher utility rates and technologies that will exacerbate service disconnection problems.
Grid modernization investments
Advanced meters

7. Racial Justice Emphasis

8. Low-income Home Energy Security Safety Net
Affordable Payments
Consumer Protections
Efficient Usage

9. Essential Safety Net Component: Affordable home energy payments
“Affordability” should be defined as a home energy burden in low-income households not exceeding the home energy burden in the median income household in a particular service territory. Bill payment assistance programs should be designed to achieve this affordability guideline.
Reduced payments for current bills must be fully coordinated with “arrearage management” programs that allow a low-income customer to pay down outstanding back bills over time through timely payment of affordable current bills.

10. Essential Safety Net Component: Consumer Protections
No existing regulatory consumer protection should be degraded in the transition to a re-envisioned energy system.
Secure notification of disconnection in person or by mail
Disconnection protections
Weather
Vulnerable households
Reasonable payment agreements
Limited security deposits and late payment fees
Rules applicable to unregulated or less-regulated energy suppliers, brokers and product vendors

11. Essential Safety Net Component: Low- and moderate-income home energy efficiency
Energy efficiency remains the premium marginal energy resource and a cornerstone low- and moderate- income home energy security.
Low-income residential energy efficiency program design should incorporate a whole-house, deep retrofit approach with zero upfront payments or any financing obligations.
No PACE Loans for low-income households!
Low-income energy efficiency programming should be designed to maximize energy savings, participant cash flow, and household comfort.

13. Utility Fixed Charge Rate Design: The intra-class cost shift and disproportionate harms
With declining sales, utilities seek to shift cost recovery from volumetric to monthly, fixed charges
Undermines energy efficiency investment and program participation incentives
Shifts costs within a rate class from high-volume consumers to low-volume consumers
Data demonstrates that in nearly all regions of the US electricity usage is below the residential class average for
Low-income households
African-American, Latino and Asian-headed households
Elder households

17. Electricity Consumption Graphs and Tables
Website detailing electricity consumption by
Income category
Race of householder
Age of householder
communications/utility-rate-design.html or Google “NCLC rate design”
U.S. Energy Information Administration – Residential Energy Consumption Survey
27 “Reportable Domains”
Click on link to interactive map