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Agreement reallocates Montana USB
Renewables funds tapped for low-income assistance
The Universal Systems Benefit (USB)funds collected from Montana ratepayers by bankrupt NorthWestern Energy appear to be safe from the utility's creditors (see page 1 ), but officials have diverted a large portion away from renewable energy development and efficiency to help customers with high heating bills.
NorthWestern rate increases that doubled the price of natural gas for its customers in just six months have put pressure on state officials to find relief for low-income households as winter closes in (nearly 25 percent of Montana's taxpaying households are below the federal poverty level, according to the state Dept. of Revenue). Governor Judy Martz appointed a task force that in August accepted a NorthWestern Energy recommendation to transfer $1.7 in USB funds originally earmarked for a wind energy project and energy conservation to low-income programs. In 2002, NorthWestern collected $8.2 million in electric USB funds, generated through a surcharge on electric bills.
The recommendation surprised human service, environmental, and energy conservation advocates who have traditionally advocated that USB expenditures balance temporary relief measures such as bill discounts with investments that promote affordable energy bills over the long haul. Those groups – some of whom sit on NorthWestern's USB Advisory Committee but were not consulted about the utility proposal – were alarmed that nearly all of the $1.7 million to be transferred to low-income programs was tagged for bill assistance and very little for low-income weatherization.
The advisory committee countered with a proposal to allocate $425,000 for weatherization. The governor's task force forwarded a compromise reducing that amount to $262,500. That's much different than the way the state Public Service Commission originally divvied up low-income purposes in 1998; the PSC set aside nearly 30 percent of funds for weatherization and other efficiency measures, while the task force allots less than one-sixth of the transfer for those purposes. But the PSC approved the proposal Oct. 7 as a "one-time allocation that does not set precedent for future years."
NW Energy Coalition member groups who sit on the USB Advisory Committee aren't happy with the outcome, but they won't contest the PSC decision. PSC chair Bob Rowe says the difference between the two proposals didn't warrant an argument that would have delayed relief to needy residents, especially since both proposals increase the net funds available for all programs. PSC vice-chair Tom Schneider, however, said he was frustrated that the governor's task force revised the advisory committee recommendation, which he considered "right on target." But Schneider says he voted for the task force proposal because the advisory committee didn't want to fight it.
Patrick Judge, of the Montana Environmental Information Center, says that low-income weatherization would have been a more logical way to spend dollars originally intended for conservation. Judge disputes task force assertions that additional bill assistance, which costs less per recipient than weatherization, will spread benefits to more needy households. Judge points out that increasing the money for bill assistance only creates larger awards for the predetermined number of eligible recipients. Weatherization – which on average lowers annual power bills by more than 20 percent – is a better strategy for freeing low-income residents from dependence on state and federal aid, he adds.
Nevertheless, efforts are afoot in the state legislature to permanently reallocate USB renewables and efficiency funds to other uses. An interim legislative committee will hear reallocation proposals Nov. 22. Judge says the funds are relatively secure for the foreseeable future, but constant diligence will be necessary.