2021 -- H 5809

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LC001525

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE PERCENTAGE OF

INCOME HOME ENERGY AFFORDABILITY ACT

     

     Introduced By: Representative Scott Slater

     Date Introduced: February 24, 2021

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

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GOVERNMENT" is hereby amended by adding thereto the following chapter:

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CHAPTER 141.1

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THE PERCENTAGE OF INCOME HOME ENERGY AFFORDABILITY ACT

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     42-141.1-1. Short title.

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     This act shall be known and may be cited as “The Percentage of Income Home Energy

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Affordability Act.”

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     42-141.1-2. Findings.

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     (a) In recent years the federal government has reduced home energy assistance to low-

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income households;

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     (b) Thousands of low-income Rhode Islanders lose access to heat or electricity every year

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due to lack of energy affordability;

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     (c) Previous efforts to help low-income payers manage their arrears, while helpful, fail to

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address the burgeoning need for greater energy assistance;

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     (d) Many other states have passed legislation to establish some form of rate-payer

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assistance program to address rising demand for energy assistance;

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     (f) The general assembly hereby establishes the Rhode Island percentage of income home

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energy affordability act.

 

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     42-141.1-3. Program creation.

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     By December 31, 2022, or as soon as practicable thereafter, the department of human

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services shall create a program to be known as the “Percentage of Income Home Energy

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Affordability Program” for the purpose of ensuring that utilities are affordable for low-income

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households.

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     42-141.1-4. Definitions.

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     For purposes of this section:

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     (1) “Commercial and industrial customers” includes all establishments engaged in

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commercial activity, either for-profit or nonprofit, including, but not limited to, transportation,

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manufacturing, mining, construction, agriculture, fishing, forestry, forestry industries, school

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dormitories, hospitals, and military barracks and other non-residential customers.

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     (2) “Commission” means the public utilities commission.

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     (3) “DHS” means the department of human services.

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     (4) “Home energy” means retail electric and natural gas service provided for end-use

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consumption by residential consumers.

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     (5) “Home energy burden” means the percentage of a consumer’s household income,

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including any grant of LIHEAP assistance, that is paid toward the cost of a consumer’s home energy

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electric and gas usage.

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     (6) “LIHEAP” means the federal Low Income Household Energy Assistance Program.

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     (7) “Participating agency” includes any community action program or other community-

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based agency which determines eligibility for LIHEAP benefits.

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     (8) “Percentage of income home energy affordability program” is an income-sensitive

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tiered subsidy program that makes utility service affordable for low-income households. This type

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of program is also known as a percentage of income payment plan (PIPP).

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     (9) “Residential customer” includes all private residences, whether occupied or vacant,

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owned or rented, including single-family homes, multi-family housing units and mobile homes, but

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not including school dormitories, hospitals and military barracks.

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     42-141.1-5. Eligibility.

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     Customers with a household income at or below one hundred fifty percent (150%) of the

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federal poverty level who are receiving assistance through LIHEAP shall be eligible for the

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affordability subsidy program under this section.

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     42-141.1-6. Program subsidy credits.

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     (a) The DHS shall inform each utility of the subsidy credit for which each eligible

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household is qualified and of the duration for which that subsidy credit must be provided, on a first-

 

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come, first-served basis, as long as funds are available. All funds collected through “system benefits

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charges” established pursuant to § 42-141.1-10 shall be fully expended annually, including

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accumulated interest.

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     (b) The amount of subsidy credit shall be that amount necessary to reduce the household’s

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home energy burden to an affordable percentage of income as defined in this section.

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     (c) The affordable home energy burden for each eligible household shall be determined as

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follows:

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     (1) Each household that uses electricity as its primary source of heating shall pay not more

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than four percent (4%) of its annual gross household income for the cost of electricity;

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     (2) Each household that uses gas for its primary source of heating shall pay not more than

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two percent (2%) of its annual gross household income for the cost of gas;

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     (3) Each household that does not use electricity as its primary source of heating shall pay

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not more than two percent (2%) of its annual gross household income for the cost of electricity.

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     (d) The DHS may allocate additional subsidy credits as it deems appropriate for crisis

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intervention.

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     (e) The DHS may also allocate subsidy credits to reduce arrearages when needed to bring

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home energy burdens to an affordable level.

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     (f) Each utility shall raise funds for any subsidy credits it provides for its low-income

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customers under this chapter through system benefits charges established pursuant to § 42-141.1-

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10.

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     42-141.1-7. Obligations of participants.

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     Participating households shall agree to the following obligations in order to participate in

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this affordability program:

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     (1) The household shall report, within a time period prescribed by the DHS, changes in

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income or financial condition that affect the household’s eligibility or need for energy assistance

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to a responsible administrator in the DHS or in a participating agency;

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     (2) Household participation in this program shall be terminated if the household fails to

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make three (3) or more consecutive monthly payments of their gas and/or electric bills, unless the

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household has reported a change in income or financial status in accordance with subsection (1) of

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this section and has been determined eligible on account of that change for additional assistance or

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for emergency assistance. Upon termination from the program due to failure to pay three (3) or

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more consecutive monthly payments, the household shall be deemed ineligible to reapply for the

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program for a period of six (6) months and upon re-application, shall be treated as a new applicant

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for purposes of establishing the three (3) years of regular monthly payments required for arrearage

 

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reduction.

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     42-141.1-8. Arrearage.

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     A household establishing three (3) years of regular monthly payments under this chapter

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shall not be required to pay any preexisting arrearage at the end of the three (3) year period and that

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arrearage shall be forgiven.

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     42-141.1-9. Usage limit.

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     (a) The DHS shall establish maximum usage limits eligible for the subsidy program based

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on such factors as household size, thermal integrity of the household dwelling unit, and average

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household energy expenditure of a median income household.

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     (b) Under no circumstances may a maximum usage limit be set lower than one hundred

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fifty percent (150%) of the median RI household energy use.

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     (c) Energy usage exceeding the limits shall be billed at the prevailing consumer rate for

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low-income consumers.

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     (d) Conservation may be rewarded with a reduction in the payment percentage required.

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     42-141.1-10. System benefits charges.

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     (a) For the first three (3) years, utilities companies shall collect a non-bypassable monthly

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charge from each gas and each electric account receiving energy not for resale, including low-

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income households, in accordance with the following:

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     (1) Electric service accounts:

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     (i) One dollar and fifty-five cents ($1.55) for residential customers;

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     (ii) One dollar and fifty-five cents ($1.55) for commercial and industrial service customers

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whose average is less than ten kilowatts (10 kw) of demand;

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     (iii) Fourteen dollars and fifteen cents ($14.15) for commercial and industrial service

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customers whose average use is between ten kilowatts (10 kw) and two hundred kilowatts (200

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kw); and

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     (iv) Two hundred seventy-one dollars and seventy-five cents ($271.75) for commercial and

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industrial service customers whose average usage is greater than two hundred kilowatts (200 kw).

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     (2) Natural gas service accounts:

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     (i) One dollar and fifty-five cents ($1.55) for residential customers;

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     (ii) One dollar and fifty-five cents ($1.55) for commercial and industrial service customers

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whose average usage is less than five hundred thousand (500,000) cubic feet per year;

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     (iii) Fourteen dollars and fifteen cents ($14.15) for commercial and industrial service

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customers whose average use is between five hundred thousand (500,000) cubic feet and three

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million, five hundred thousand (3,500,000) cubic feet per year; and

 

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     (iv) Two hundred seventy-one dollars and seventy-five ($271.75) cents for commercial and

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industrial service customers whose average usage is greater than three million, five hundred

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thousand (3,500,000) cubic feet per year.

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     (b) After the third year of the program, the public utilities commission shall annually set a

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non-bypassable monthly charge sufficient to fund the total program budget developed by the DHS.

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When determining the charge, the commission shall not substantially deviate from the customer

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class rate allocation proportion as set forth herein.

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     (c) Utility companies shall use the funds collected through the system benefits charge to

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provide a subsidy credit to customers' accounts, such that eligible households pay only the amount

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of the affordable home energy burden as defined by § 42-141.1-6. The DHS shall designate to

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utility companies the qualifying customer accounts and the amounts to be credited to those

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customer accounts, provided that the total amount to be credited to those accounts shall be fully

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funded by, and not exceed, the total amount collected through the system benefits charge.

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     (d) Funds collected through the system benefits charge may be used to pay annual

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administrative costs incurred by utility companies; however, those costs shall not exceed ten

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percent (10%) of the total annual amount allocated for program credits for eligible households.

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     (e) Utility companies shall report to the DHS monthly the total amount of funds available

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for low-income consumers for each utility, including accumulated interest, minus any

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administrative costs incurred.

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     (f) Utility companies shall report annually to the public utilities commission including, but

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not limited to, the amount of funds collected through the system benefits charge, the distribution of

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those funds, the amount of funding allocated to administrative costs, and the projected amount of

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funds to be collected and distributed in the following year. This information collected pursuant to

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this section shall be non-confidential and shall be made available to the public.

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     42-141.1-11. Administration.

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     (a) The DHS shall administer the program, including informing utility companies of

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applicable subsidy credits, answering consumer inquiries, referring eligible customers for

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weatherization assistance, and keeping appropriate records. The DHS may delegate to participating

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agencies the responsibility for determining program eligibility and calculating the amount of

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subsidy credit due to each eligible household.

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     (b) The DHS shall annually evaluate the impact of the percentage of income home energy

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affordability act, including, but not limited to, an assessment of the number of eligible low-income

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customers who participated in the percentage of income home energy affordability program, the

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number of low-income customers who did not participate in the percentage of income home energy

 

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affordability program, any difference in payment history between these two (2) groups of low-

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income utility customers, and an assessment of frequency of utility terminations in comparison to

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enrollment in the program.

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     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- THE PERCENTAGE OF

INCOME HOME ENERGY AFFORDABILITY ACT

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     This act would create the Percentage of Income Home Energy Affordability Program, an

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income-sensitive tiered subsidy program to ensure that home energy utility costs are affordable for

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eligible low-income households.

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     This act would take effect upon passage.

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