For the first time since its inception in 2003, the state is expanding access to its popular low-income energy assistance program.
In approving the changes, the New Jersey Board of Public Utilities will add up to 5,700 low-income households to a program that will help pay their gas and electric bills. Last year, the Universal Service Fund program assisted 174,943 customers, with benefits totaling over $115 million.
The action will raise the income eligibility limit from 175 percent of the federal poverty level to 185 percent, which is equal to a monthly gross income of $3,870 for a family of four, effective this Oct. 1.
“Updating the income threshold to make more residents eligible for support is an important step in furthering our mission of ensuring affordable utility service for all customers in the Garden State,’’ said BPU president Joseph Fiordaliso.
Broadening the USF program comes at a time when gas and electric customers are facing a slew of new rate hikes due to the Murphy administration’s aim to transform the state’s energy system to one relying entirely on clean energy sources — like solar, wind and nuclear — by 2050.
All of those require significant ratepayer subsidies, ranging from up to $300 million a year for New Jersey’s three nuclear power plants to the current $500 million the state’s solar sector enjoys. Ratepayers also face increases to modernize a power grid that’s more than a century old so as to transition away from fossil fuels.
The agency has been studying possible changes in the 16-year-old program since April. After a review, the board determined that the eligibility limit be raised from 175 percent to 185 percent of the FPL. Some groups, like AARP New Jersey and Legal Services of New Jersey, recommended the limit be raised even higher.
To raise the threshold to 200 percent of the FPL, it would have increased the number of income-eligible households to 12,100 and cost an additional $11.2 million. The hike to 185 percent will increase the cost by $5.3 million.
The USF is funded by a surcharge on utility bills that amounts to about $16 a year, according to the BPU. Unlike other parts of the surcharge, which primarily funds clean-energy programs, the USF money has not been diverted in the past.
To be eligible for USF assistance, applicants must be income-eligible and spend more than 6 percent of their annual income on their electric and gas bills. The benefits are reflected as credits on utility bills with a cap of $150 per month or $1,800 per year. First-time enrollees also are eligible for the Fresh Start program, which provides debt forgiveness for overdue energy balances of $60 or more.
In approving the changes, the board also directed its staff to initiate a comprehensive study of its energy assistance programs, an analysis it hopes to complete this fall.
“The measure of a society is how well it takes care of its vulnerable, and I am proud that New Jersey is doing that,’’ Fiordaliso said.