Client Consumption Patterns Within An Income-Based Energy Assistance Program

Abstract

An increasing number of states and utilities are exploring and implementing income-based energy assistance programs for their lowincome clients and customers [Hill, Gonzales and Colton 1990]. Such programs include not only programs involving federal fuel assistance funds,' but programs involving utility rate discounts as well. The Public Utilities Commission of Ohio initiated this approach to low-income problems in 1983 when it ordered that state's utilities to implement a Percentage of Income Plan (PIP).2 Since then, a number of generations of programs have arisen. The Low-Income Home Energy Assistance Program (LIHEAP)-based PIP3 was first implemented in Rhode Island in 1986.4 In Pennsylvania, the Philadelphia Electric Company (PECO) implemented its Customer Assistance Program (CAP), an income-based payment plan program,5 while Wisconsin and Minnesota undertook programs similar to the LIHEAP-based PIP.6 Just recently, the Philadelphia Gas Commission approved an incomebased rate design for the Philadelphia Gas Works7 and the Vermont Department of Public Service proposed an income-based Basic Energy Needs Program (BENP) for regulated non-heating vendors. Some analysts rely upon blackboard economic theory to oppose income-based programs. They argue that such programs are contrary to public policy promoting energy conservation. These analysts assert that implementation of such a program will inexorably lead to the