Low-income natural gas discount cost allocation an issue

By CMTA Staff

Capitol Update, Feb. 24, 2006 Share this on FacebookTweet thisEmail this to a friend

Legislation has been introduced to expand enrollment for the California Alternative Rates for Energy (CARE) program, which provides a 20 percent discount on low-income natural gas customer’s bills, at apartment buildings, mobilehome parks and similar residential complexes.

AB 2104, by Assemblymember Sally Lieber (D-San Jose), requires the California Public Utilities Commission to improve the CARE application process by developing processes whereby electrical and gas utilities are able to directly accept CARE applications from those tenants and to directly notify and provide renewal applications to tenants that are existing CARE customers.

With rising natural gas rates, it is understandable that the policymakers would want to provide some rate relief to low income customers.  At the same time, however, it 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 Pacific Gas & Electric 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 expansion of the CARE program should be paid exclusively by the residential class.  No additional costs should be shifted to noncore, industrial customers.
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