Why do we let people freeze in winter? (Continued) BY BRIAN C. JONES

UTILITY BILLS are big for most households. Narragansett Electric says the average home, which heats with oil or gas, pays about $59 a month. The gas company says heating customers average $1277 a year. That’s a total annual energy bill of about $1985.

For homeowners in the middle of the income ladder — about $44,300 — this bill takes a little under five percent of the household’s money. This "energy burden" totals about the same for poor households, but it takes a much bigger portion, about 17 percent, of a poor family’s income. This disparity formed the basis of the shutoff reform plan, whose authors agreed that paying monthly utility bills is mathematically out of reach for impoverished families.

So the planners decided arbitrarily to cut the poor families’ energy burdens in half. Gas-heating households would be asked to pay just seven percent of their income for electricity and gas. At the same time, households that had run up big bills would get a one-time chance to have those wiped out. One of the attractive parts of this plan — despite what critics would later say — was that it was intended to foster the development of a bill-paying ethic. Instead of throwing up their hands at the impossibility of paying their bills, households would become regular contributors to a more affordable bill.

But the planners faced the obvious problem: how to pay for the program.

The so-called "working group" was assembled under the auspices of the Public Utilities Commission, the utility rate-setting body, when it opened a special case to bring some finality to the wrenching annual shutoff issue. But the three-member PUC warned the working group not to lay the problem on the rest of the electric and gas ratepayers, or to "socialize" the plan by raising the rates of better off customers to support the poor ones.

John Howat, a policy analyst for the National Consumer Law Center in Boston, was a paid consultant to the working group and later donated his time when the federal funds to pay him ran out. The total cost of the first year of the program, he estimates, would be about $21.9 million, although costs would shrink in later years as back bills were wiped clean. But because of the availability of other money – from the federal LIHEAP programs, and what the utilities already spend to help low-income customers — about $11.7 million would be needed in "new" money, Howat says.

Matteo Guglielmetti, chief of energy and community services at the state Energy Office, who chairs the working group, said that at every meeting, the planners discussed the challenge of finding other sources to fund the long-term plan. But they never did.

Finally, the advocacy groups — which include Henry Shelton’s Pawtucket-based George Wiley Center, the Rhode Island Association of Community Organizations for Reform Now (ACORN), the Coalition for Consumer Justice, and others — proposed a funding mechanism of their own: a rate-payer based assessment. Utility users would contribute extra money based on the amount of energy they used. The PUC staff estimated that this assessment would work out to about one percent of energy bills.

Howat says a residential gas heating customer would pay about $13 extra a year, or about $1 more a month, and that the amount would be similar for customers with electric hot water heaters. The bills for businesses would be proportionately higher, since they use more energy. The PUC division said that the largest electricity-devouring industrial customers could have paid as much as $4900 more a month.

As word got out about the funding scheme, there was a public outcry, especially on talk radio shows, where hosts and listeners expressed outrage at the prospect of seeing their own — and businesses’ — rates going up. Some callers noted that they themselves were already struggling to pay their bills.

What wasn’t clear to critics was that ratepayers are already paying to help the poor families. Narragansett Electric has a special rate for low-income families that knocks 20 percent off the regular bill — it’s a $3.6 million expense paid by all customers. New England Gas, meanwhile, matches the LIHEAP grants with a 35 percent bonus, at a total cost of $1.6 million.

In any case, the Division of Public Utilities and Carriers, which is part of the working group, stridently opposed the funding plan, saying that the PUC commission had specifically ordered the group to find an "independent" funding source. Instead, the advocates laid the bill on ratepayers, and the division estimated that businesses would end up paying half of the new program’s cost.

After five hearings over the summer, the commission rejected the plan on September 4, telling the working group to keep working. "You’re asking for the PUC to level a tax," PUC chairman Elia Germani was quoted by the Providence Journal. "We don’t have the power to tax to benefit low-income people."

WITH REAL REFORM at least another season away, shutoff rituals have resumed traditional patterns. It means endless rounds of haggling between utilities and their customers, and street demonstrations, press conferences, and other actions by advocates determined to help as many as possible get through at least one more winter.

A focus for Shelton and others is to get disconnected households turned back on — so they can be covered by the annual winter "moratorium" against shutoffs.

Rhode Island’s utility rules, like those in other states, discourage regulated utilities from shutting off low-income families, along with elderly, sick, or unemployed residents, between November 1 and April 15. The catch, however, is that the service has to be on in the first place.

Thus, there’s an annual rush to get customers back in service by paying a portion of their back bills. Under the current rules, a customer who has run into back bill trouble the first time can be restored with a 25 percent down payment; service for a second round of bill problems can be restored for 35 percent, and 50 percent is required for repeat problem ratepayers.

One of the things that helps this process is the LIHEAP program, which awards grants to households whose incomes are no more than 60 percent of the state’s median income. A family of three, for example, qualifies with an income of up to $35,505.

Guglielmetti, of the state Energy Office, says 90,000 households are eligible, but that less than a third — about 26,000 — got grants, averaging $370 to $380, last year Families apply through local Community Action Program offices. Once a family qualifies, energy companies accept the promise of the money in calculating down payments. As the November 1 moratorium period approached, the Energy Office said the LIHEAP money had helped 400 shutoff families get reconnected, but that for another 100, the gas or electricity stayed off because even the grant wasn’t enough for the minimum payment.

Shelton, ACORN, and other advocates then tried to get the PUC to lower the 25-to-50 percent threshold to 15 percent of the back bill. The Wiley Center filed an "emergency" petition that said a large number of turnoffs so far this year, plus the plight of families facing cold houses, required urgent action.

At a hearing in late October, the idea got support from a variety of top officials — including aides speaking for Lieutenant Governor Charles J. Fogarty and Attorney General Patrick C. Lynch, although Lynch’s office presented a variation, suggesting a cut of 10 percentage points from each level. The Laborers’ Union and Rhode Island Kids Count supported the lower down payment.

At the hearing, one mother said of herself and her four children: "I have no gas for two weeks. I’m here to say I need help — they are cold."

Luis Adames, 57, of Potters Avenue in Providence, said he left his job as a security guard to care for his sick 54-year-old wife and their eight-year-old granddaughter. When his gas bill got to $3118, service was stopped. Unemployment checks don’t come close to paying the rent, he said, much less the utility bills. "The only thing I do is say," Adames said, "Please help."

But the PUC division, as well as PUC commissioners, argued that there was no "emergency" in the legal sense of the term. Shutoffs were running consistent with the past seven years. Customers wanting to plead individual hardship cases were encouraged to seek hearings with PUC division staff. When an audience of more than 30 got the drift of where the commission was headed, some members interruped with shouts of "Greed!" and "You have no idea what is going on in the world."

As the atmosphere got rowdier, the commission declared a recess, and the hearing never resumed. In the afternoon, the commissioners voted, three to zero, to reject the petition.

"You can probably imagine that I am disappointed — I suppose that’s putting it gently," Lynch said in an interview a few days after the PUC decision. "Not necessarily that they didn’t agree with our position. But they didn’t even agree with any of them [the reduction plans]."

Shelton and ACORN representatives say their next target will be the gas company itself, demanding that a gas company bonus provided to LIHEAP recipients — matching 35 percent of the LIHEAP grant — be immediately counted toward the turn-on down payment, rather than credited to bills in the spring. In that way, more would qualify for service restoration.

In Washington, Senator Reed says Congress is still deciding how much LIHEAP money to parcel out. The Senate is proposing $2 billion, of which Rhode Island would get $13.6 million, he says; the House wants to budget $1.7 billion, which would give Rhode Island $11.5 million – the same as last year’s amount. The outcome is important, because the program is not open-ended: money is given to heating customers on a first-come basis until the funds run dry. "There is a deficit here in Washington, caused principally by tax cuts going forward," says Reed, a Democrat. "And in that situation, there’s a scramble for dollars for all domestic programs."

Frederick L. Mason III, a Narragansett Electric spokesman, and his New England Gas counterpart, Christopher Medici, say they hope that the "working group" will continue its efforts. The Energy Office’s Guglielmetti says he’ll probably convene the panel this month.

Shelton — whose work in previous decades helped produce the shutoff moratorium and encouraged the gas and electric companies to give grants or discounts to poor customers — is surprisingly upbeat considering the PUC’s rejections of long- and short-term proposals. "I think we have momentum going for some permanent changes," Shelton says, and he’s hopeful that appeals to Governor Donald Carcieri and other state officials will provide some immediate funds in the short term.

In January, when the new legislative session starts, the advocates will be at the State House, Shelton promises: "For sure, when it opens next year, we hope the General Assembly will order the PUC to do what it should have done anyway."

Meanwhile, community action programs continue to process heating assistance applications.

At the Blackstone Valley Community Action Program in Pawtucket, Deborah Byron has been working on heating assistance for 15 years and says LIHEAP applications are coming in at a faster rate than other years. "A woman called last week," Byron says. "She’s a single parent and has a little boy who has been diagnosed with cancer. She’s been in and out of work for six months and they turned her service off."

With the heat off, and winter bearing down, the dilemma of working a 40-hour week to pay her bills, but needing time off to take her son to the hospital for his treatments tore at the mother, Byron says. Service was restored once the woman documented her son’s medical condition to the gas company — something she learned she could do when she called BVCAP. But it remained unclear where matters stood with the woman’s back bill.

Brian C. Jones can be reached at brijudy@ids.net