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Utility Customers Will Pay Less to Help Poor Cover Energy Bills in Coming Year

Residential customers will kick in about $40 annually to help finance two highly regarded assistance initiatives

BPU Commissioner Jeanne Fox
Credit: Amanda Brown
BPU Commissioner Jeanne Fox

It will cost utility customers a bit less next year to pay for two widely regarded programs designed to help low-income residents cover their energy bills.

The typical residential gas and electric customer will pay about $6 less to finance the programs, a 13 percent drop, according to the New Jersey Board of Public Utilities, one of two agencies in charge of the initiatives.

The BPU indicates that the two programs will add about $40 a year to the typical residential customer's bill.

More than 200,00 households take advantage of the assistance, which ensures that customers who qualify for the so-called Universal Service Fund spend no more than 6 percent of their household income on energy bills. The budget for the fund this year tops $186 million, a drop from last year's $230 million. It is financed by a surcharge on all customers’ gas and electric bills.

Another $87 million is targeted for the state’s Lifeline program, which offers senior citizens and the disabled a $225 one-time energy benefit, also funded by ratepayer surcharges, dubbed the societal benefits charge.

In approving the new budgets, BPU President Bob Hanna described the two programs as very important components of the utilities’ safety net initiative.

BPU Commissioner Jeanne Fox agreed. She said the programs are pretty well established in helping poor people pay their utility bills. “It’s one of the best programs in the country,’’ Fox said.

To qualify for the USF program, the household must earn no more than 175 percent of the federal poverty line, which differs depending upon the size of the household.

New data released yesterday by the U.S. Census Bureau shows a significant increase in the number of families in New Jersey living in poverty.

Census officials estimate 8.2 percent of families were living in poverty in 2012, compared with 7.8 percent the prior year, and 6.4 percent in 2008 in the midst of the recession. Poverty levels differ based on family size. In 2012, a family of four was considered impoverished if its income was $23,050 or less.

Despite the increase in poor households, the number of people participating in the program has remained relatively stable, according to BPU officials. One reason could be that energy bills might have been lower last year because of the relatively warmer weather. Another factor might be that natural gas prices have dropped to historical lows in recent years.

“You guys have done a great job,’’ said BPU Commissioner Joseph Fiordaliso. “We’re willing to assist people who really need that help.’’

Besides the low-income energy assistance program, the surcharge on utility bills also finances other state initiatives, most notably New Jersey’s clean energy fund. In recent years, the surcharge has raised more than $300 million annually, but much if has been diverted by the state Legislature and Christie administration to plug holes in state budgets.

More than $1 billion has been siphoned off from the clean energy fund, a step that has drawn harsh criticism from environmentalists, consumer advocates, and business interests who end up paying the bulk of the surcharges because they use more electricity and gas than residential customers.

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