The initial “PIPP” tax added to Dominion and APCo bills in 2021 may hide the full impact of the program.
By Steve Haner
As the State Corporation Commission prepares to set up Virginia’s first electricity cost shifting program, using a tax on all electric bills to provide discounts to low-income customers, advocates are already pushing to expand and enrich it.
An expert hired by an environmental group argues in testimony that the General Assembly erred when it capped electricity payments from poorer households at 6% of their monthly income if they did not have electric heat, and 10% if they did. Appalachian Voices’ expert wants the SCC to lower the rate to 5% and 8% respectively, greatly increasing the amount of revenue that must be extracted from other customers. Continue reading
By Steve Haner
Virginia’s two major electric utilities estimate that as many as 150,000 of their poorest residential customers will see their monthly bills reduced next year using money extracted from all their other customers on their own power bills.
Appalachian Power Company projects about 30,000 of its low income customers will receive subsidies of $500-$600 per year. Dominion Energy Virginia projects bill subsidies to about 120,000 households of about $750 per year.
Both companies told the State Corporation Commission recently that to pay for this, about $1.12 will be added to the cost of every 1,000 kWh of electricity used by homes, businesses, and industries in Virginia. The cost per kWh is the same for all customer classes, and thus represents a larger percentage price increase for the commercial and industrial users. Continue reading
Three of the six electric utilities charging customers to provide others with Ohio PIPP subsidies. Per 1,000 kWh the surcharge to customers is $3.19 for Toledo Edison, $3.34 for Ohio Edison and $2.37 for The Illuminating Company.
by Steve Haner
Both the Virginia House of Delegates and Senate have voted to increase the price of electricity to most Virginians in order to subsidize the bills of low-income utility customers. How much? They have no idea. But the program in Ohio being copied adds from $1 to $3.66 to the price of 1,000 kilowatt hours for those not subsidized.
The Virginia version is even borrowing the name and acronym from Ohio, the Percentage of Income Payment Program (PIPP). The charge in both is called a “universal service fee.” In 2020, the Ohio program will cost ratepayers $301 million to subsidize the power bills of about 275,000 low-income households. The Public Utility Commission of Ohio (PUCO) sets the amount charged in each utility’s service territory and the Ohio Development Services Area transfers the necessary funds to the various electricity providers.
The largest electricity provider in that state of 11.7 million people, Ohio Power, has the highest “adder” on its rates, $3.66 per 1,000 kilowatt hours used. That works out to $44 per year for a residential customer using exactly that amount monthly. A large industrial or commercial user would pay the same rate until monthly consumption hit 833,000 kilowatt hours, when a reduced rate kicks in on additional consumption. The first 833,000 kilowatt hours of usage in Ohio Power’s territory is hit with a $3,050 monthly surcharge. Continue reading
What will Virginians see due to the Virginia Clean Economy Act? “Lots and lots of solar,” said the patron, Del. Richard Sullivan, D-Arlington. Higher bills, added the State Corporation Commission.
By Steve Haner
The General Assembly adopted Governor Ralph Northam’s clean energy package Tuesday, with party-line votes in both the House of Delegates and Virginia Senate. Two House Democrats joined the Republicans in opposing the House version.
House Bill 1526 and Senate Bill 851 appear identical but amendments were being adopted at the last minute. Now that they have crossed over to the other chamber, they likely will become identical. And expect furious efforts to recruit some Republican votes in favor, as this new vision for Virginia’s energy economy will be disruptive, expensive and politically explosive.
Using the House version as it passed, here is a tour of some (not all) highlights, with line references so you can follow on this PDF version of the engrossed bill. If you want to see it without line numbers, but with highlighting of the new language instead, look here. For that I’ve used the Senate bill.
The bill overrides State Corporation Commission authority to look out for consumers in too many places to count, but you’ll find the clearest and most important example of that on line 1399 of the House bill. Continue reading