In Chilly Economic Climate, BPU Puts More Money into Low-Income Energy Assistance

Tom Johnson | October 21, 2010 | Energy & Environment
Number of households enrolled in board's Universal Service Fund crosses 200,000 for first time

The sour economy is bumping up the cost of a popular low-income energy assistance program once again.

With more people seeking help, the state Board of Public Utilities (BPU) yesterday increased the budget for its Universal Service Fund (USF), an assistance program that ensures low-income households pay no more than 6 percent of their income on energy bills.

For the first time ever, the number of households participating in the USF topped 200,000, according to Kristi Izzo, board secretary. Last year there were 180,000 households enrolled; this year the number was 205,000, Izzo said.

Qualifying households for the USF program are those whose income is 175 percent below the federal threshold for poverty.

Increasing the Budget

The board increased the budget for the USF program from $195 million to $215 million. At the same time, it adopted a $72.6 million budget for the Lifeline program, which provides senior citizens and the disabled with a $225 energy benefit.

The increases will boost by $1.23 a year (or 3 percent) a surcharge on gas and electric customers’ utility bills. The surcharge, known as the societal benefits charge, amounts to about $44.46 a year to pay for both the USF and Lifeline programs.

Overall, however, the surcharge raises far more than that. Last year, it brought in $740 million. The bulk of the fund pays for low-income energy assistance programs and New Jersey’s clean energy fund. It also pays for the decommissioning of nuclear power plants and cleanup of contaminated coal gas plants.

The increased spending on state low-income energy assistance programs comes at a time when the federal government is reducing its own energy assistance program. Funding for the Low Income Home Energy Assistance Program (LIHEAP) in New Jersey this year dropped from $196 million to $120 million, a cut that most other states also suffered.