NJ Utility Costs Tied To Household Income In New Proposal

NEW JERSEY — As customers across the Garden State are bracing for another utility rate hike this summer, the New Jersey Board of Public Utilities is looking at ways to make energy costs more affordable.

The BPU recently accepted an assessment of alternative policy and rate options that will guide board members on what steps they could take to better assist low- and moderate-income customers. This includes widening the scope of the state's Universal Service Fund, which provides monthly credits on eligible customers' natural gas and electric bills.

That report, prepared by Brattle, Inc., noted that only 20 percent of customers who are eligible for USF or the Low-Income Home Energy Assistance Program (LIHEAP) actually participate, and called for better outreach.

"Nobody wants to see their bills go up," said NJPBU president Christine Guhl-Sadovy. "This report is another example of our efforts to manage any rate increases and ensure we are improving our available assistance programs to reach as many ratepayers in need as best we can."

The analysis also includes a proposal that would charge customers different amounts based on their income — with lower-income customers having a smaller fixed rate, and higher-income customers paying a greater charge. The report recommends that the state "should continue to monitor the merits of income-tiered fixed charges, but that "no immediate changes are necessary given that similar affordability benefits are being achieved through USF."

Though the report only recommended that New Jersey consider an income-tiered rate system, the proposal caught the attention of State Sen. Anthony Bucco, who said it was a "desperate gimmick."

Bucco noted that California adopted a fixed-rate model last year based on income, and that emulating it would be "a recipe for disaster."

“Rather than unfairly burdening more residents with higher energy bills, we should be working hard to reduce costs by creating more electric power generation as fast as possible with reliable and conventional energy sources like natural gas," he said in a statement.

View the full Brattle report here.

The BPU will host a public webinar at 10 a.m. on Tuesday, April 1 to discuss affordability options for low- and moderate-income households, and seek comment from ratepayers.