Michigan Legislature takes action on temporary plan to help low-income residents heat homes
Both chambers of the Michigan Legislature took action Thursday night to approve legislation that offers a temporary solution to help low-income residents heat their homes this winter.
Senate Bills 864 and 364, which passed with bipartisan support in both the House and Senate, create a new Vulnerable Household Warmth Fund that will provide $58 million for utility assistance and shutoff prevention — with $48 million coming from utility bill surcharges and $10 million coming in the form of a one-time appropriation from the general fund.
Money from the fund will be used to pay bills for electricity, natural gas, propane, heating oil, or any other type of fuel used to heat the homes of vulnerable residents.
The new fund replaces the Low-Income and Energy Efficiency Fund, a program administered by the Michigan Public Service Commission since 2000.
Jeff Irwin
The new program will be funded in a similar manner, but energy efficiency aspects of the former LIEEF program are being eliminated.
"The bill is only in effect for one year. The Republican leadership has indicated that we will take this issue up next year," said state Rep. Jeff Irwin, D-Ann Arbor, who lamented the demise of the energy efficiency aspects of the program.
"Energy efficiency met the axe. Hopefully we will restore these cost-saving efficiency programs in future iterations of this program," he said. "Killing the stalled projects from Clean Energy Coalition and others are an amazingly wasteful decision."
Revenue from surcharges added to the utility bills of customers of the three largest electricity and natural gas providers in the state previously funded the LIEEF program to the tune of nearly $90 million annually, about two-thirds of which went to utility assistance. A court decision earlier this year froze the program.
Under the new legislation, utility companies with more than 1 million customers will continue to charge their customers a similar surcharge for contribution to the new fund until it reaches a balance of $58 million, or until Sept. 30, 2012, whichever comes first.
For residential customers, the surcharges amount to about $1 per month, according to a legislative analysis.
The legislation requires that any utility payments for vulnerable residents must be in the form of a voucher or direct payment to the utility company, and it requires vulnerable residents to make a contribution toward their fuel bill in order to receive a voucher or payment.
It also requires the PSC to hold proceedings in early 2012 for each affected utility to determine the manner in which money being held in escrow for LIEEF will be refunded to customers.
And it requires the PSC to issue an order reducing the retail rates of the companies that contribute to the new fund by the amount contributed by Sept. 30, 2012.
The legislation awaits Gov. Rick Snyder's signature.
Washtenaw County officials still say the the local community stands to lose nearly $19 million in utility assistance funding due to other state and federal cutbacks, including proposed cuts to the federal Low-Income Home Energy Assistance Program.
Andrea Plevek, human services coordinator in the county's Department of Community and Economic Development, said about $200,000 in funding for utility assistance came to Washtenaw County service providers through the state's LIEEF program.
Ryan J. Stanton covers government and politics for AnnArbor.com. Reach him at ryanstanton@annarbor.com or 734-623-2529. You also can follow him on Twitter or subscribe to AnnArbor.com's email newsletters.
Comments
stunhsif
Sat, Dec 17, 2011 : 2:51 a.m.
"Under the new legislation, utility companies with more than 1 million customers will continue to charge their customers a similar surcharge for contribution to the new fund until it reaches a balance of $58 million, or until Sept. 30, 2012, whichever comes first." It pays to be poor I guess. No vote on it, just take it from us in the form of a surcharge. Thanks a lot, you are welcome ! Go Green Go White
DonBee
Fri, Dec 16, 2011 : 8:22 p.m.
First realize that this is a tax on your utility bill if you pay for gas or electricity. Your bill will increase to find this assistance. Only a small portion will come from the general fund. As to extending gas lines, there are regulations in the state about extensions. They have regulated rates to extend the lines and you have a number of years to pay it off on your gas bill - in our case is was 15 years.
DonBee
Sun, Dec 18, 2011 : 12:17 a.m.
Mick52 - There is the Michigan Public Service Commission. They have complete control over the rates that MichCon and DTE can charge. The only piece they don't control is the local franchise fee. If you are not getting a response from MichCon a simple email to MPSC will probably get you rapid response from the gas or electric company. If you don't like your rates, there are hearings on a regular basis at the MPSC that you can attend and speak out at.
Mick52
Sat, Dec 17, 2011 : 6:10 p.m.
Thanks DonBee. IMHO we should not have to pay a large mega wealthy corporation a fee in order for it to extend its service, especially when it is only a short distance when they have a monopoly in the market. I suppose I would agree to a reasonable fee, divided equally between all the residents, but I can't get them to even call me back. I would be willing to do a survey to gauge interest but their lack of response is not encouraging in my belief I would receive fair treatment. Another bit of info I left out. One day a Consumers Energy truck drove down our street. Hoping for some expansion, I stopped them. They told me that they were not their for any expansion planning but were scouting out major underground lines. They told me that many Nat Gas companies have underground lines to transport gas from one region to another, even companies that do not have customers in Michigan. That is why I see so many signs warning of gas lines all around here. I guess I support opening up the market to more companies to increase competition and perhaps expand service with competing prices. When one company has control over your area they have too much power to jack up your costs and it appears, deny you service.
xmo
Fri, Dec 16, 2011 : 6:48 p.m.
Why not title this article " Republicans Lead Michigan Legislature to HELP POOR"
Doug
Sat, Dec 17, 2011 : 3:57 p.m.
You can't really expect Ann Arbor.Com to give the Republicans credit for something good now, can you?
Forever27
Fri, Dec 16, 2011 : 9:26 p.m.
because that would be misleading...and we all know how much you hate it when journalists act as propagandists for politicians.
John Q
Fri, Dec 16, 2011 : 6:57 p.m.
Helping the poor? They cut back the funding for the program, reduced the amount of support low-income households can get eliminated the energy efficiency component that helped save money and didn't bother to put in place a permanent fix. No credit is given because none is deserved.
Mick52
Fri, Dec 16, 2011 : 5:32 p.m.
This is an essential plan. In homes where resident's heating source has been shut off, people frequently resort to dangerous space heaters, which often lead to fires and the death of children. That is a cost that we cannot put a price on. I do have a suggestion that I hope will be investigated. The article notes homes heated by propane and fuel oil will be included. I am not aware of the cost of fuel oil, but the cost of propane has spiked drastically in the past few years, along with the cost of oil, its source. I have tried repeatedly to find out why natural gas providers do not run lines to my neighborhood, which is about a mile from homes that do have access to natural gas. My phone calls are not returned. If the policy of ending America's dependence on foreign oil is true and that natural gas is plentiful in the U.S., which is what I hear from commercials, would it not be cost saving to make natural gas providers run lines to more homes? Natural Gas companies appear to have a monopoly with no competition. I have been told my acquaintances that they want to charge prospective customers tens of thousands of dollars to extend natural gas lines just a few hundred yards. I have called my "local representative" at least three times and I have not received a call back from messages left on an answering machine (Consumers Power). I would like to see the legislature put pressure on DTE and Consumers Power to expand their service areas which will provide lower cost heating to many people, saving them money and reducing dependence on oil. I hate to propose putting propane providers out of business, but the cost of propane is way too high, unaffordable, and quite frankly will consume a lot of these funds. The relief funds will go further is more of these homes can get natural gas heating. Many propane furnaces can be easily converted to natural gas.
stunhsif
Sat, Dec 17, 2011 : 2:46 a.m.
I built a house in 1992 out in the country and DTE/Michcon charged me 3 grand back then to run gas and electric 500 feet off the roadway. That was a cost I had not even thought about until I had to have it done. Ignorance on my part ! I do agree with you though on most of what you say. BTW , I now buy my natural gas and lock in my rate for a year each august , got it this year for .5399 CCF. Too bad we cannot do that yet with electricity. Go Green Go White