Gino DiCaro

Low-income natural gas discount shifts costs to industrial users

By Gino DiCaro, VP, Communications

Capitol Update, Nov. 4, 2005 Share this on FacebookTweet thisEmail this to a friend

On October 27, the California Public Utilities Commission (CPUC) approved a decision expanding enrollment for the California Alternative Rates for Energy (CARE) program, which provides a 20 percent discount on low-income customers' bills.  

Eligibility for the program, currently set at 175 percent of the federal poverty level (approximately $34,000 a year), will be expanded to include ratepayers whose income is 200 percent of the federal poverty level (approximately $38,000 a year).  The decision also allows CARE customers to enroll by telephone and prohibits utilities from kicking customers off the program for failure to re-certify their income eligibility.

With rising natural gas rates, it is understandable that the CPUC would want to provide some rate relief to low income customers.  At the same time, however, the CPUC must also recognize the burden that such an effort imposes on other consumers.  Industrial customers are already paying far too much of the CARE subsidy.  In the PG&E system, CARE costs have increased by one thousand percent in the past five years.  For industrial customers, the CARE subsidy amounts to more than fifty percent of the total transportation rate paid to PG&E.  In contrast, the average residential gas customer pays only about $12 per year in CARE costs on the PG&E system.

CMTA's position is that the additional subsidy to protect low-income customers against high natural gas costs should be paid exclusively by the residential class.  No additional costs should be shifted to noncore, industrial customers.

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