Carcieri’s compassionate gambit (continued)

SOLUTIONS HAVE BEEN proposed before. Utility companies and advocates, including Shelton’s Wiley Center, fashioned a comprehensive plan to end shutoffs in 2003, following years of meetings under the auspices of the Public Utilities Commission. That plan called for poor households to pay only a fixed percentage of their incomes for energy needs. The premise was that energy costs are simply out of reach for these households, and that they need subsidies.

John Howat, a consultant involved in the previous and current discussions, says all households face an "energy burden" — the total cost of gas, electricity or other fuels. But most households, says Howat, a policy analyst for the National Consumer Law Center in Boston, devote only a relatively small percentage of their total income for energy, whereas energy costs devour a relatively bigger portion of the resources of poor people.

How much do utilities cost Rhode Islanders? According to figures supplied to the Phoenix by Narragansett Electric, a typical Rhode Island household might spend $753 for electricity this year. New England Gas says customers heating with natural gas could spend $1377. The combined bills total $2130. For a household with $45,205 income — the Rhode Island median — the energy burden is less than five percent of income. But a family of four with income of $18,810 — the federal poverty limit — needs more than 11 percent of its income to pay the same bills.

Two years ago, the group trying to solve shutoffs agreed that for households to have a reasonable chance of paying their bills, the percentage of income devoted to energy would have to be brought closer to the norm, or seven percent of income. A subsidy would have covered the rest of the bill. There was a second hurdle — what to do about the big back bills that prompted the shutoffs in the first place, sometimes totaling thousands of dollars?

The planners proposed that households agreeing to lower, but regular, payments of ongoing bills, would also get their big back bills "forgiven." What they couldn’t agree upon was how to pay for the twin subsidies. In the end, advocates such as Shelton proposed raising the rates of all electricity and gas users. That produced an enormous backlash on talk radio and in other forums, and the PUC flatly turned down the idea, saying it could not "socialize" utility rates.

Last year, a bill proposing the same sort of plan failed to win General Assembly approval, leaving the state with the status quo.

How Holt’s group will approach the long-term solution — and the need for millions in subsidies — remains to be seen, since it has only started to wrestle with the issue. One obvious source of funds is voluntary charitable contributions.

In fact, there is already a long-established program, the Good Neighbor Energy Fund, operated by the utility companies themselves. The companies enclose donation envelopes with their regular monthly bills. In past years, customers have mailed back a total of about $500,000.

One proposal suggested to the new energy committee is sharply boosting the Good Neighbor effort. The premise is that if a big portion of all utility customers annually chipped in $20 each, millions could be raised. PUC Commissioner Robert B. Holbrook, a former banker and past member of the East Greenwich Town Council, says he likes this concept, since he feels the PUC’s own hands are tied in raising rates to pay for subsidies. "By statute, the PUC does not have authority to favor one class of ratepayers over another," he says.

Other charitable dollars are already at work. In addition to the $50,000 allocated by the United Way for shutoff relief this year, the Rhode Island Foundation issues grants each year, usually in increments of $5000, to more than 40 nonprofit groups that provide emergency services, including shutoff assistance. The utilities themselves provide some subsidies to low-income customers.

Still, says energy expert Howat, the problem is simply too large and enduring for charity to be an effective long-term solution. "Just voluntary contributions will not meet the criteria ultimately to provide enough money," Howat says in a recent interview. "You never know what you are going to get, and when the money will come in." A year-in, year-out expense like energy subsidies needs a funding source that is stable and predictable, he says.

Rick Schwartz, a spokesman for the Rhode Island Foundation, says he doesn’t know whether the foundation would commit to big subsidies on a long-term basis if asked by the Holt committee. Normally, the foundation prefers to invest its money in ways that solve long-term problems, rather than providing outlays for on-going needs, year after year.

Holt thinks charities are reluctant to commit cash year after year. "If you raise your voice and say, ‘We have a major issue and need help,’ the community, the Rhode Island community, will respond," he says. "If you come back next year, it will again respond, but less than the year before. You go back a third year, and it will be less again."

Absent charity, it would appear that money is available mainly from two other sources: taxes; or surcharges paid by energy users, which would raise gas and electric rates and possibly oil prices.

Holt says government is not the sole solution to this or similar problems, but that it does have a big role to play. "Government has prime responsibility for public safety, which isn’t just about preventing crime, but also, I think, to make sure people are warm in their homes," he says.