Task Force Files Proposal To Make Natural Gas Low-Income Discount Available To Shopping Customers (Portable)

A District of Columbia Task Force concerning the natural gas Residential Essential Services (RES) assistance program has filed a consensus recommendation to make the program benefits portable, and available to low-income customers who choose a competitive natural gas supplier

"The Task Force was able to reach consensus on a single reform proposal. Specifically, there is consensus that: (1) the RES program should remain a heating season program because of the specific seasonal usage of natural gas and should not be expanded to a year-round program; (2) the RES program should be simplified by eliminating the current three different income tiers of recipients and eliminating the monthly total therm cap limits on the discount; (3) the RES discount should be calculated as a percentage of the distribution bill, such that the discount is approximately 25% of the total bill; (4) excluding the RES discount line, RES participants should receive a bill that appears identical to the non-RES customers’ bills; (5) the RES discount should be presented as a separate line item on customers’ bills showing the dollar credit; (6) RES customer’s bills should also reflect the value of avoided surcharges; (7) to account for any large fluctuations in the cost of natural gas in a given month, the program should include an automatic short-term increase in the discount percentage when the purchase gas price increases by 50% compared to the threshold (where the threshold is PGC price for preceding year or average PGC price for preceding three years, whichever is lower); and (8) adjustments to specific parameters in the RES program could be made during rate cases when the Commission and parties look at natural gas usage in the District and the broader state of the natural gas market," a report from the task force said

"The applicability of the discount just to the distribution portion of the bill enables the discount to be fully portable. Participants found that the distribution portion of a customers’ bill accounted for 50% of the total bill. Participants looked at the historical RES discount and found that customers were receiving a discount of approximately 21% across the various months of the heating season. Participants suggest targeting a total bill discount percentage of 25%. This is closer to the percentage the Commission accepted in Formal Case No. 1120 for electric customers. To achieve this percentage, participants recommend a 55% discount on the distribution portion of the customer’s bill," the report noted

FC 1127