Home heating discount approved

By Mike Dennison of The Standard State Bureau - 10/26/2005

HELENA — Low-income households served by NorthWestern Energy should get discounts of up to 30 percent on their home-heating bills this winter, thanks to action Tuesday by the state Public Service Commission.

On a 4-1 vote, the PSC ordered NorthWestern to use a special pot of ratepayer funds to provide low-income households a 30 percent discount on natural gas bills and a 25 percent discount on electric bills starting next month.

The discounts will apply to customers who qualify for the Low Income Energy Assistance Program (LIEAP), which is for households whose income is up to 150 percent of the federal poverty level. For a household of two, the income cut-off is about $19,200.

About 9,000 NorthWestern Energy customers currently are eligible for the program, and the ranks could grow this winter. The company has 310,000 customers in Montana.

Tuesday’s action does not affect customers of Montana-Dakota Utilities in eastern Montana. MDU has a sliding-scale discount program for low-income electric and gas customers, and has asked the Montana Public Service Commission to approve a new program that offers more conservation programs for its customers.

The PSC vote on Tuesday told NorthWestern how to spend ‘’universal system benefit’’ (USB) funds, which are 2.4 percent of customers’ electric rates and 0.42 percent of customers’ natural gas rates.

Together, the two charges are expected to generate $11.6 million in the coming year.

Tuesday’s vote increased the amount of USB funds allocated for low-income assistance from about $4.8 million to $6 million. The remainder is spent on conservation and alternative energy programs.

Commission action doubles the current discount available to NorthWestern Energy gas customers, and increases the discount for electric customers from 15 percent to 25 percent.

Tuesday’s vote also increased the available funds for Energy Share of Montana, a non-profit group that offers home-heating assistance for consumers who don’t qualify for other programs.

Commissioner Greg Jergeson, D-Chinook, who crafted the proposal along with Commissioner Bob Raney, D-Livingston, said the Energy Share money will help households who aren’t technically ‘’low income,’’ but still might have a tough time paying high bills this winter.

‘’There are going to be a whole lot more people who face, for the first time, an emergency situation when it comes to paying their heating bills (this winter),’’ Jergeson said.

Natural gas prices are expected to hit record highs this winter. NorthWestern’s rates increased 27 percent last month and probably will rise again during the winter, company officials have said.

The commission directed NorthWestern to give $575,000 of USB funds to Energy Share.

To finance the higher discount and increase for Energy Share, the PSC told NorthWestern to reduce USB funding by about $800,000 for several conservation and ‘’renewable energy’’ programs. That includes $400,000 for the Northwest Energy Efficiency Alliance, which promotes energy-efficient products.

While Tuesday’s vote increased the discount for homeowners through next April, it eliminated any discount for natural gas customers during the late spring and summer months.

Commissioner Tom Schneider, D-Helena, objected to eliminating the gas discount for those months, voting against the proposal for that reason.

He tried to convince fellow commissioners to remove some funding for Energy Share and leave the discount for gas-users in spring and summer, but couldn’t get a majority of the five-member PSC to support him.

Commissioners also said they could come back later this winter and further adjust spending on the USB programs depending on what other home-heating assistance programs may materialize.

Congress is considering higher federal spending, and Gov. Brian Schweitzer has promised some state help, as well.