Texas legislators balanced the state budget this year by diverting money from a fund to help the poor pay for electricity.
Temperatures are still soaring past the century mark and refusing to subside, many Texans are trying to find ways to lower their electric bills. One option that some low-income residents relied on is no longer available.
The Public Utility Commission of Texas told 391,000 low-income and elderly residents that the LITE-UP Texas program, which reduced their electricity bill by 10%, would end in September.
Texas Representative Sylvester Turner said the state is “stealing from the elderly and poor to fill their coffers.”
“We are using their money as an ‘under table tax’ to balance the budget,” he said.
The fund receives revenue from each Texas consumer, who is required to pay $0.65 each month without the option to opt out.
Each year the fund generates $140 million annually, but this year the fund is expected to only allocate $60 million to $65 million, with the remainder going to balance the budget.
The fund currently has a balance of $650 million and is expected to grow to $930 million by 2013, said Turner.
Heat Boosts Urgency
In 2002, the fund was formed to help the elderly, poor and disabled residents pay their electricity bills.
The Public Utility Commission of Texas currently has a chairman and one commissioner, as well as a vacancy. Texas Governor Rick Perry, who is currently running for president, appointed the members.
Texas has been setting new records this summer as temperatures regularly soared past 100 degrees in July and August, prompting the need for greater electricity usage.
During June and July, electricity demand rose by 4.8% and 3.0%, respectively, according to the Electricity Reliability Council of Texas. In August, demand increased by 4%.
Moving The Goal Posts
Instead of providing relief to the state’s unemployed, low income or elderly, the fund has tightened the parameters of the eligible and the time periods covered by the assistance.
Changes to the fund have been made since its inception, decreasing the number of residents who are eligible by more than 50%, Turner said. In 2003, the Public Utility Commission started changing the guidelines and the fund went from helping 750,000 consumers to 400,000. The program used to also operate year-round, but more cut backs to the fund meant residents were only able to receive discounts from May to September.
The intended purpose of the fund has been changed, Turner said.
Most consumers received an average of a 17% discount on their electric bill, but now the discount has been lowered to 10%, which increases the balance in the fund, he said.
As a result, the balance of the fund grew “exponentially,” Turner said.
“Many of these people are not turning on their air conditioners,” he said. “They are more scared of their bill.”
Since the legislature ended their session this summer, Turner said the only recourse consumers have is to wait until 2013 when lawmakers reconvene. Turner plans to file another bill to eliminate the surcharge for the fund “since there is no need for it.”
Leading By Example
Other states also faced severe shortfalls in their budgets this year, but did not funnel money from their programs.
California operates several programs to assist low-income customers, which are also funded through surcharges on customer bills.
California’s CARE program provides qualified low-income residents with a 20% discount on both their electric and natural gas bills.
“The California Public Utilities Commission’s programs help consumers better manage their utility bills,” said Susan Carothers, spokeswoman for the California Public Utilities Commission. “Consumers may qualify for discounted energy, telephone, or water services in order to keep these essential services more affordable for lower income consumers.”
For more coverage of the ongoing energy crunch in Texas, read about the state’s reckoning with the worst of the heat wave this summer. Also, read about the role advocates say wind power had in helping to avoid a blackout, the federal government’s plans to boost reliability in the region, and Breaking Energy’s forecast of potential problems in the area earlier this year.
Photo Caption: Cattle rest at a watering hole in a pasture July 28, 2011 near Canadian, Texas. A severe drought has caused shortages of grass, hay and water, in much of the state, forcing ranchers to thin their herds or risk losing their cattle to the drought. The past nine months have been the driest in Texas since record keeping began in 1895, with 75% of the state classified as exceptional drought, the worst level.