The restructuring of the electricity system forces us to confront the issue of responsibility head-on. In a regulated system, utilities had an "obligation to serve." They were forced to provide electricity. In a deregulated system, they are not. Some believe that the California electricity crisis in early 2001 was a result of a botched deregulation system in which the distribution utilities still had an obligation to serve and not to raise prices, while the generators of electricity no longer had either responsibility. But if California had instead allowed utilities to pass through the increased charges, as occurred in 2000 in San Diego, the 100-200 percent increase in rates would have led many households to be cut off.

In return for their monopoly status, electric utilities have an obligation to serve all members of the community. Over the years, a number of states have elaborated rules to specifically protect low-income households' access to electricity. These have taken four forms:

• a ban on power disconnection in winter
• energy assistance payments and the absorption of delinquent bills by other utility customers
• lifeline rates and discounts
• low-income energy conservation (weatherization) programs

Some states have formally required providers and utilities to continue programs targeted to low-income households under a restructured system.

• Massachusetts requires that distribution companies continue programs "comparable to the low-income discount rate in effect prior to March 1, 1998." Eligibility may extend to 175 percent of federal poverty guidelines. Included in the energy conservation program is a permanent set aside for low-income energy efficiency investments of 0.25 mills per kWh or 20 percent of each utility's residential conservation program. Coordination is carried out by the local Weatherization Assistance Program agencies.
• California's electric restructuring law (AB 1890 Section 1(d)) states "It is the further intent of the Legislature to continue to fund low-income ratepayer assistance programs. . ." California's CARE program provides a 15 percent discount on gas, and electric and monthly customer charges to households with incomes at or below 150 percent of federal poverty guidelines.
• In Pennsylvania, the Consumer Choice Act, effective January 1, 1997 required programs to allow low-income customers to maintain electric service. The act requires distribution utilities to rely on community-based organizations for the delivery of these programs where that is appropriate.
• New Hampshire's electric restructuring legislation calls for "programs and mechanisms that enable residential customers with low-incomes to manage and afford essential electricity requirements..." Maine’s requires a minimum of 0.5 percent of distribution electric utility revenues be spent for low-income programs.

Overall, funding for low income households held firm or modestly increased after restructuring, although in many cases the before and after comparison is misleading because utilities decreased their spending on low income households significantly between 1993 and 1998.

RULES:

• Protecting Low Income Energy Customers
  Funding commitments for low-income energy programs is a critical component of a sound energy policy. Typically, low-income energy programs are focused on helping families pay their energy bills. In many cases there is also a component of the program that targets energy-efficiency improvements for low-income households. We highlight of few of the states that have made the best commitments to low-income households. More...
• Energy Efficiency
  Energy efficiency is a clearly demonstrated, cost-effective means to meet future electricity needs. Most states that have started to implement electric restructuring have set up policies to finance energy efficiency along with energy assistance programs for residents and businesses. These are commonly known as "public benefits programs." More...