AUGUSTA, Maine, March 31 -- The Maine Public Utilities Commission issued the following order (No. 2023-00056) on March 30, 2023:
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MAINE PUBLIC UTILITIES COMMISSION Establishment of Assessment and Apportionment Amounts for Low-Income Assistance Plan and Assessment Amounts for Oxygen Pump and Ventilator Programs Pursuant to Chapter 314
ORDER
BARTLETT, Chair; DAVIS and SCULLY, Commissioners
I. SUMMARY
By this Order, the Commission maintains the current funding amount for the Statewide Low-Income Assistance Plan (Statewide Plan) at $15,000,000 for the 2023 2024 Low-Income Assistance Program (LIAP or Program) Year. Further, the Commission updates the apportionment and assessment amounts for the 2023 - 2024 LIAP Year for each electric transmission and distribution (T&D) utility, sets the funding and assessment level for the Oxygen Pump and Ventilator Program (Oxygen/Ventilator Program) for the 2023 - 2024 Program Year at $250,000, and increases funding for administrative costs. There is $24,462 of unspent funds from the 2021 - 2022 Program Year that will remain in the fund and will not be rolled into the 2023-2024 Program Year funding for reasons described below.
II. BACKGROUND
Chapter 314 of the Commission's rules establishes the standard design, administration and funding mechanism for the Statewide Plan. The intent of Chapter 314 is to make electricity bills more affordable for qualified low-income customers. Chapter 314 requires each of Maine's T&D utilities to create and maintain a LIAP for its customers and establishes a central fund to finance the Statewide Plan./1 In 2022, the Commission amended Chapter 314 expanding LIAP eligibility to include participants in Department of Health and Human Services (DHHS) means tested programs whose income is at 75% or less of the Federal Poverty Level (FPL), in addition to Low Income Home Energy Assistance Program (LIHEAP)/2 eligible households./3 Chapter 314 designates the Maine State Housing Authority (MSHA) as the administrator of both the Statewide Plan and the individual LIAPs.
The Commission makes adjustments to the Statewide Plan in its annual LIAP assessment and apportionment dockets. On March 13, 2023, the Commission issued a Recommended Decision regarding the upcoming program year. On March 21, 2023, the Office of the Public Advocate (OPA) and Central Maine Power Company (CMP) filed comments.
III. DISCUSSION AND DECISION
A. Overall Funding Level for the Statewide Plan
Chapter 314 Sec. 5(C) requires that the Commission monitor the needs of Maine's low-income electric customers and evaluate annual LIAP funding and expenditure levels and program design features. On or before April 1 of each year, the Commission adjusts the overall assessment, as well as each utility's assessment, as necessary to ensure that the assistance provided by the LIAPs is consistent with the provisions of 35A M.R.S. Sec. 3214. The Commission does this by tracking the overall cost of electricity and modifying the overall assessment if the average cost of electricity in the State has changed significantly. The Commission conducted a review of electricity costs in 2022 and determined based upon the T&D responses that the average electricity rates had increased by approximately 33% since the last time the Commission increased the funding level in 2008. The May 3rd Order took this increase, as well as the expanded eligibility criteria, into consideration when it set the funding level for the 2022 - 2023 Program Year at $15,000,000. The Recommended Decision notes that the addition of DHHS program participants to the LIAP has not increased the number of participants to the extent expected and that, therefore, the Commission anticipates unspent money from the current LIAP to be available to help fund the 2023-2024 LIAP Year. As a result, the Recommended Decision recommended maintaining the funding level at $15 million.
Pointing in part to the increases in standard offer rates effective January 1, 2023, the OPA recommended that the Commission increase LIAP funding to at least $25 million for the upcoming program year. In support of this recommendation the OPA asserts that the definition of affordability that has been used is that low-income customers should not pay more than 4% of their household income on energy (the "affordability target"). The OPA argues that maintaining the $15 million funding level set last year is insufficient to meet the affordability target because 1) it does not provide sufficient funding for those currently enrolled in LIAP to reduce their energy costs to 4% of their income, and 2) it does not include sufficient funding to expend benefits to those ratepayers who need financial assistance to meet the affordability goal but have not yet enrolled in the LIAP program. The OPA acknowledges that uncertainty remains about how many DHHS recipients will eventually apply noting that participation has been lower than expected but argues that it is reasonable to expect that participation will continue to increase during the current program year.
CMP also expressed concern about maintaining the funding level at $15 million given the increase in standard offer rates. CMP also states that it has seen a significant increase in LIAP participation over the past year despite the relatively low participation from DHHS means tested program recipients and does not anticipate having any unspent money available from the current year to carry over to supplement funding for the upcoming program year.
As noted in last year's assessment and apportionment Order, the Commission is open to changing the overall funding level for the program once more is known about the actual number of DHHS means tested program recipients who will enroll in LIAP./4 However, as discussed above, the addition of DHHS program participants to the LIAP has not increased the number of participants to the extent expected and, thus, the Commission anticipates unspent money from the current LIAP to be available to help fund the 2023-2024 LIAP Year./5 In addition, electricity supply costs have fallen recently and in considering LIAP funding level changes, the Commission is mindful of the impact of increased program costs on other ratepayers so soon after doubling the cost of the program last year. Thus, though the cost of electricity for most of the State has risen because of the increase in the standard offer rate for CMP and Versant customers since the overall funding level for the LIAP was established last year, because of the anticipated unspent money being available from the current year due to lower participation rates than expected, the Commission will maintain the overall funding level at $15,000,000. The Commission will also continue to monitor the enrollment numbers for the current program year and can adjust funding levels if necessary./6 Further, if it appears that automatic enrollment for DHHS participants becomes feasible, the Commission can adjust funding levels.
B. Individual Utility Assessment and Apportionment Amounts
To determine if a change is necessary to either the assessment or apportionment allocation across the T&D utilities, the Commission has recalculated both the assessment and apportionment percentages using the methods outlined in Chapter 314. The assessment percentages are based on the number of residential customers in each T&D utility territory and the apportionment percentages are based on the number of LIHEAP customers. The Commission obtained the number of residential customers for each T&D utility from the 2022 Annual Consumer Assistance Division Credit and Collections Reports and the LIHEAP demographic statistics for the same period from MSHA.
Last year, the Commission included an estimated number of eligible participants in DHHS means tested programs in each T&D utility territory to calculate the apportionment. However, the difference between apportionment with and without this estimate was not material and from Commission Staff discussions with the T&D utilities, the data available is only available by town and not by T&D utility service area resulting in estimates that are too imprecise to be relied on. The assessment percentages and levels are shown in Appendix A, Table 1 and the apportionment percentages and levels are shown in Appendix A, Table 2. Appendix A, Table 3 lists the amount that T&D utilities must submit in payments to MSHA in accordance with Chapter 314, Sec. 5(E)(1).
C. Administrative Costs
Chapter 314, Sec. 5(B)(3) established the total statewide spending for administrative costs for the LIAP in 2001 at $291,164.00. Chapter 314 further states that this funding amount will continue each year thereafter unless modified by the Commission. The Commission has not previously modified the spending amount for administrative costs.
Pursuant to Chapter 314 Sec. 6(B), DHHS will send a notification in September of each year to all households participating in a DHHS means-tested program whose income level is at or below 75% of the FPL notifying the household of the existence of the LIAP and the household's eligibility to participate in the program. For the current LIAP Year, the cost associated with this mailing was approximately $20,000. In anticipation that the annual cost for mailing the DHHS letter will range from $20,000 to $25,000 depending upon the number of letter recipients, the Commission increases the funding for the administrative costs of the program by $25,000. This increases the total administrative costs for the program to $316,164. The annual assessment that each T&D utility must pay to administer the Statewide Plan has not changed since the inception of the program but now must be adjusted to account for this increase. Chapter 314 does not indicate how these costs are to be allocated to each T&D. However, in keeping with the assessment of the costs of the LIAP and the Oxygen/Ventilator Program, the Commission has allocated the costs based on the number of residential customers. This is shown in Appendix A, Table 4. T&D utilities must remit all administrative cost payments to MSHA by October 7, 2023.
D. Oxygen/Ventilator Program Funding
Chapter 314 establishes a separate account for the reimbursement of Oxygen/Ventilator Program benefits and Section 5(E)(4) allows for the quarterly reimbursement of benefits similar to the reimbursement allowed for the LIAP. Section 5(B)(2) states that funding for the Oxygen/Ventilator Program is based on the spending for the last completed program year and will be set by Commission Order. Further, Chapter 314, Sec. 6(A)(4)(f), requires MSHA to file a report with the Commission stating the amount of benefits paid by the Oxygen/Ventilator Program for the prior program year immediately following January 1 of each year. Each utility's assessment for the Oxygen/Ventilator Program is based on the percentage of residential customers residing in the utility's service territory. For MSHA to have the funds available for the quarterly reimbursement of funds expended in this program, Chapter 314 requires that the utilities remit funds for the Oxygen/Ventilator Program to MSHA by October 7 of each program year.
The last completed program year, 2021 - 2022, resulted in a cost of $246,980 for the Oxygen/Ventilator Program./7 Thus, Chapter 314 would require that the funding level for 2023 - 2024 be set at $246,980. The initial funding level was set at $151,793 for the 2021 - 2022 Program Year and MSHA used funds that were underspent in this program in previous years to cover the shortfall. To accomplish this, the Commission authorized MSHA to transfer $75,000 in accrued interest to the Oxygen/Ventilator Program account to allow MSHA to continue to reimburse the utilities for benefits provided to customers./8 The Commission also set the 2022 - 2023 funding level for this program at $250,000 with an additional $54,000 available from the 2021 - 2022 LIAP rollover funds noting that the expansion of the LIAP may double the number of participants in the program. Although it appears that participation did not increase as expected, the Commission expects that the increased funding needs for this program will continue and therefore keeps the funding level for the Oxygen/Ventilator Program at $250,000, with an additional $24,462 available in roll over funds if needed (see discussion below).
E. Rollover and Unspent Funds
The Commission's review of the quarterly reports sent by T&D utilities to MSHA indicate that $24,462 of unspent funds are available from the 2021-2022 Program Year.
However, unlike in past years, the Commission will not add these funds to the apportionment available for each T&D utility for the upcoming 2023 - 2024 Program Year. It is the Commission's view that it is better to have reserved funds in the first few years of the program expansion for use either to pay LIAP benefits or Oxygen Pump/Ventilator benefits. Appendix A, Table 6 provides the detail of the calculation of the unspent amounts. The Commission directs MSHA to maintain the unspent funds from previous LIAP years until it receives direction on how that funding should be assigned.
For T&D utilities where the assessment exceeds the apportionment - Central Maine Power Company (CMP), Fox Island Electric Company (FIEC) and Kennebunk Light and Power (KLP) - these utilities must forward the difference between the assessment and the apportionment to MSHA at the beginning of each LIAP year and then spend at least the apportionment amount, excluding rollover funds, on LIAP benefits in the utilities' service territories. Once these T&D utilities' spending reaches the apportionment amount (without rollover funds), the utility is eligible for reimbursement from the Statewide Plan fund for any of the rollover funds apportioned to the utility./9 Based upon the reports filed for the 2021 - 2022 Program Year, to the extent not already done, CMP, FIEC, KLP can receive $340,378, $246 and $1,869 from MSHA for benefits paid from roll-over funds.
For T&D utilities where their apportionment exceeds their assessment, they must provide benefits to participants up to their assessment amount, then they can request reimbursement from MSHA for LIAP expenditures that exceed their assessment amount up to their apportionment amount. Appendix A, Table 7 provides the details of this calculation. For the 2021 - 2022 Program Year, all T&D Utilities provided benefits above the assessment level.
F. Changes in Calculation of Lump Sum Payment
By Order dated July 14, 2017, the Commission amended Chapter 314 to add Section 4(F)./10 Section 4(F) allows T&D utilities using a lump sum benefit program to calculate benefit amounts using a default allocation model provided annually by the Commission. The rule does not require T&D utilities to use the default allocation model but does require T&D utilities not using the model to propose an alternative process for determining benefit amounts. Currently all T&D utilities using a lump sum program have elected to use the default model. As a result of the May 3rd Order and discussions with the T&D utilities, the Commission modified the model so it would properly reflect the requirements of Chapter 314. The model is attached.
III. ORDERING PARAGRAPHS
Accordingly, the Commission
ORDERS
1. That the overall funding level for the Low-Income Assistance Program (LIAP) is $15,000,000 for the 2023 - 2024 Program Year;
2. That the LIAP assessment and apportionment levels for each Transmission and Distribution (T&D) utility shown in Appendix A, Tables 1 and 2, respectively, are adopted;
3. That the T&D utilities listed in Appendix A, Table 3, forward those amounts to the Maine State Housing Authority (MSHA);
4. That each T&D utility pay MSHA the annual assessment shown for administrative costs in Appendix A, Table 4;
5. That the Oxygen Pump and Ventilator Program funding level is set for the 20232024 Program Year at $250,000 and that the Oxygen Pump and Ventilator Program assessment as shown in Appendix A, Table 5 is adopted; and
6. That MSHA retain the $24,462 of unspent funds from the 2021 - 2022 Program Year in the fund.
Dated at Hallowell, Maine this 30th day of March, 2023
BY ORDER OF THE COMMISSION
/s/ Harry Lanphear, Administrative Director
COMMISSIONERS VOTING FOR: Bartlett
Davis
Scully
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Footnotes:
1/ The fund has three separate accounts: one dedicated to LIAP benefits, one dedicated to oxygen/ventilator benefits and one dedicated to administrative expenses.
2/ LIHEAP is a federal program that offers energy assistance to people who fall within the established poverty guidelines and is administered by the MSHA.
3/ Maine Public Utilities Commission, Amendments to Statewide Low-Income Assistance Plan Rule (Chapter 314), Docket No. 2021-00400, Order Adopting Rule and Statement of Factual and Policy Basis (May 3, 2022) (May 3rd Order).
4/ MAINE PUBLIC UTILITIES COMMISSION, Establishment of Assessment and Apportionment Amounts for Low-Income Assistance Plan and Assessment Amounts for Oxygen Pump and Ventilator Programs Pursuant to Chapter 314, Docket No. 202200037, Order at 3, n.3 (June 7, 2022).
5/ The Commission also notes that LIHEAP enrollment typically ends in April, so the Commission does not expect there to be significant numbers of additional enrollment this program year as the commenters suggest. In addition, the Commission does not yet have a full year of data since the program was expanded. This first year of the program expansion ends on September 30, 2023.
6/ The OPA suggested a couple additional program changes in its comments which the Commission does not adopt as part of this Order. Broader program changes may be considered at a future date once more is known regarding the full effects of the program expansion.
7/ Utilities provided $246,598 in oxygen pump benefits and $382 in ventilator benefits (for a total benefit amount of $246,980) during the 2021-2022 Program Year.
8/ MAINE PUBLIC UTILITIES COMMISSION, Establishment of Assessment and Apportionment Amounts for Low-Income Assistance Plan and Assessment Amounts for Oxygen Pump and Ventilator Programs Pursuant to Chapter 314, Docket Nos. 202200037 and 2021-00051, Order (Oct. 18, 2022).
9/ As noted earlier in this Order, the $24,462 in roll over funds from the 2021 - 2022 Program Year will remain with MSHA and will not be reapportioned to utilities through this Order for the 2023-2024 Program Year.
10/ Maine Public Utilities Commission, Amendments to Chapter 314 - Statewide Low Income Assistance Plan, Docket No. 2016-00256, Order Amending Rule and Factual and Policy Basis (July 14, 2017).
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Original text here: https://mpuc-cms.maine.gov/CQM.Public.WebUI/Common/ViewDoc.aspx?DocRefId={6EBF8D05-7010-4E57-A023-6E0DA2CDFC58}&DocExt=pdf&DocName=2023-00056%20Order%203-30-23.pdf
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