Low-Income Energy Network (LIEN) Webinar: Exploring an Electricity Affordability Program for Ontario's Low-Income Consumers
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Recorded on February 21, 2013 - With electricity bills projected to increase by 46% from 2010-2015, low-income residential consumers in Ontario (about 733,000 households) may face housing affordability problems and could be forced to make difficult spending decisions such as paying for heat or food. To proactively address this looming crisis, the Low-Income Energy Network (LIEN) is working with a consultant Roger Colton, a U.S. based expert on low-income energy issues, to develop a ratepayer-funded electricity rate affordability program along with a cost estimate for delivering it to Ontario’s low-income consumers. LIEN has renewed its efforts to advocate for such a program and is working to build public awareness about, and support for, this proposal. The webinar will begin with an overview of LIEN’s advocacy activities and culminate with a detailed presentation of the electricity rate affordability program. An archived recording of this webinar, along with copies of all presentation materials, are available for download at: http://yourlegalrights.on.ca/webinar/low-income-energy-network-lien-webinar-exploring-electricity-affordability-program-ontarios-
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Low-Income Energy Network (LIEN) Webinar: Exploring an Electricity Affordability Program for Ontario's Low-Income Consumers
- 1. 11 LOW-INCOME ENERGYLOW-INCOME ENERGY NETWORKNETWORK Energy Poverty in Ontario: LIEN and its work Webinar February 21, 2013 Zee Bhanji Mary Todorow LIEN is a project funded by Legal Aid Ontario and supported by ACTO & CELA
- 2. 2 Presentation overviewPresentation overview 1. Introduction to LIEN 2. LIEN’s “pyramid” to address energy poverty 3. Energy costs and low-income consumers 4. OEB’s LEAP 5. Progress on components of an Ontario energy poverty strategy 6. Going forward
- 3. 3 About LIENAbout LIEN LIEN was formed in 2004 and is a network of 90 environmental, anti-poverty and affordable housing advocacy groups We seek to raise awareness of, and propose effective, environmentally sustainable solutions to, energy poverty through: - outreach to community groups; - outreach to the public, e.g. through the media; - participating in OEB hearings and legislative processes on issues relating to low-income consumers. - working with policy-makers and local utilities to develop workable solutions.
- 4. 44 LIEN’s approach to low-income energy conservation & assistance
- 5. 5 PovertyPoverty 14.7% of Ontario’s population (1,749,965 persons) are living at or below the “poverty line” Households living at or below before-tax LICOs are “financially straitened” and spend more of their income than average on food, shelter and clothing Source: Statistics Canada, 2006 Census of Population Ontario I ncome Status 85.3% 14.7% Low -income Ot her
- 6. 6 Low-income households - whereLow-income households - where dodo they live?they live? 732,910 low-income households in Ontario 469,215 are renter households (most live in multi-storey buildings) 263,670 are homeowner households (most in single-family or semi-detached homes – over a third are senior-led)
- 7. 7 Low-income households - who areLow-income households - who are they?they? Ontario’s low-income households are disproportionately: Single mothers New immigrants Racialized communities Disabled Seniors
- 8. 88 Rising energy prices….Rising energy prices…. Real cost-to-customer increases of Ontario’s Long-Term Energy Plan – projected at 3.5% per year over 20 years (2010-2030) BUT, 7.9% annual increases over the first five years from 2010-2015 - for total increase of 46% Natural gas and oil prices have been volatile over the past decade
- 9. 99 …….and energy price mitigation.and energy price mitigation Ontario Clean Energy Benefit takes 10% off electricity bills over five years from 2011-2015 $299.82 million (2010-11) $1.032 billion (2011-12) $1.07 billion (estimated 2012-13) • Ontario Trillium Benefit includes: • Ontario Home Energy & Property Tax Credit • Northern Ontario Energy Credit
- 10. 10 Energy and the Cost ofEnergy and the Cost of HousingHousing Rising utility costs have a disproportionate impact on low-income consumers Erodes housing affordability and ability to pay for other daily necessities such as food, clothing, medicine and transportation
- 11. 11 Low-income energy burdenLow-income energy burden Energy burden refers to the amount of household income spent on energy U.K. fuel-poor household defined as spending more than 10% of income LIEN’s position is that 6% is an affordable burden
- 12. 12 Understanding Home Energy Burdens Home energy burden = Home energy bill / Household income Total shelter burdens affordable at 30% of income Utility costs should be no more than 20% of shelter costs Utility costs affordable at 6% of income (30% x 20% = 6%)
- 13. 1313 A permanent low-income energy rate assistance program LIEN’s proposal for an Ontario Home Energy Affordability Program has five major components: rate affordability, arrears management, crisis intervention, conservation and demand management, and consumer protections. It advocates that Ontario’s low-income consumers should not be paying more than 6% of their total household income on energy.
- 14. 1414 OEB & low-income rate assistance Ontario Home Energy Affordability Program – LIEN tried to make it an issue in Union Gas and Enbridge Gas 2007 rates hearings at the OEB April 26, 2007 OEB decision – no jurisdiction to set affordable rates for low-income consumers -strong dissent decision by OEB Vice-Chair Response: LIEN appealed decision to Divisional Court, and on May 16, 2008, Divisional Court issues decision in favour of LIEN - declares that OEB has jurisdiction to establish a rate affordability
- 15. 1515 OEB & consultation on low- income energy consumer issues July 2, 2008 – OEB announces consultation process to examine energy issues associated with low-income consumers Sept. 22-25, 2008 – OEB stakeholder conference Presentations on issues such as rate assistance, arrears management, disconnection protocols, service charges, energy retailing, smart sub-metering March 10, 2009 – OEB issues LEAP report Dismissed rate affordability program, but recognized energy poverty as a significant problem needing a comprehensive and province-wide approach!
- 16. 1616 OEB’s LEAP Low-Income Energy Assistance Program: emergency financial assistance for consumers in need access to more flexible customer service rules on matters such as arrears payment plans, disconnection notice periods, and security deposit waivers targeted energy conservation and efficiency programs to reduce consumption & costs
- 17. 1717 Going forward Monitoring the effectiveness of the LEAP initiatives and improving delivery Continuing to advocate for a permanent low-income energy rate assistance program Continue to build the capacity of other organizations to carry out LIEN’s work – Energy Poverty Toolkit
- 18. 1818 Contact information – LIEN Website: www.lowincomeenergy.ca Email: bhanjiz@lao.on.ca Phone: 416-597-5855 x. 5167 Toll-free (Ontario): 1-866-245-4182 ext. 5167
Notas do Editor
- LIEN is widely recognized as the primary go-to organization with expertise on low-income energy issues. LIEN was formed in 2004 and is a network of anti-poverty, affordable housing, environmental and social justice groups. We have 90 member organizations . 8 steering committee member organizations (diversified; representation from communities across the province): A Place Called Home (APCH) Advocacy Centre for Tenants Ontario (ACTO) Canadian Environmental Law Association (CELA) Centretown Citizens Ottawa Corporation Income Security Advocacy Centre (ISAC) Toronto Environmental Alliance (TEA) Sisters of Providence of St. Vincent de Paul Salvation Army Centre of Hope Our aim is to ensure that low-income consumers have optimal access to energy conservation and assistance programs and to build local community capacity to reduce energy poverty. We seek to raise awareness of, and propose effective, environmentally sustainable solutions to, energy poverty by: Working with organizations and serving as a resource Advising government, OEB, OPA, utilities etc on the need for policies and programs that will protect low-income energy consumers Educating organizations, government and the general public about the need for specifically designed programs for low-income consumers through workshops, meetings, the website and the media Compiling information on available energy assistance and energy conservation programs for low-income consumers
- Multi-pronged approach to promoting energy conservation and ensuring access to energy for low-income consumers The foundation of the pyramid consists of: 1) Targeted low-income energy conservation and efficiency programs, at no-cost to recipients AND we know that energy efficiency programs alone cannot solve the problem of affordability. However, they can make a significant contribution to reducing the energy burden. The greatest benefits will be achieved through the introduction of measures that achieve deep energy savings (such as the installation of energy efficient appliances, proper attic and wall insulation, and an efficient heating system). 2) Extensive consumer education about energy conservation, and specific low-income consumer protection measures These protection measures include conditions of service that will not penalize low-income energy consumers who are already struggling to pay for gas/electricity bills, i.e. security deposit exemptions, no late payment fees, fair arrears repayment programs. A permanent low-income rate assistance program Moving up to the middle, LIEN has also been advocating for a low-income rate assistance program which would ensure ongoing affordability of energy bills and serve to prevent energy crises rather than just react to them after they have occurred. Adequate emergency energy assistance to help households in short-term crisis Considering the reality of circumstances facing many people living with low-income (such as insecure work, fluctuating income, and short-term financial emergencies) it is important to note that even with a rate affordability program and an energy conservation and efficiency program, there will still be a need for a permanent, adequately funded, and accessible emergency energy fund.
- Statistics Canada, 2006 Census of Population. Incidence of low income among the population living in private households, provinces – Ontario. Pre-tax, post-transfer payment LICOs – vary by household and community size
- Low Income Cutoffs (LICOs) published by Statistics Canada, using pre-tax, post-transfer household income are currently the best approach for defining low income. Post-tax LICOs adjust for federal and provincial income taxes, but do not reflect regressive taxes such as EI and CPP premiums, GST, provincial sales taxes and property taxes. The pre-tax, post-transfer LICOs vary according to family size and size of community. Persons and families living at or below these income levels are widely considered to be living in straitened circumstances. Both the Canadian Council on Social Development (CCSD) and the National Council of Welfare (NCW) have adopted the Statistics Canada pre-tax, post-transfer LICOs as poverty lines.
- The Debt Retirement Charge (DRC) is intended to help pay down the legacy debt of the former Ontario Hydro. Although the debt was acquired in the past, the facilities that were financed by the debt are still in use and continue to supply electricity to customers today. For this reason, today's customers contribute to paying down the debt through the DRC. November 18, 2010 : Minister of Energy announces Ontario Clean Energy Benefit (OCEB), which will provide a 10% benefit to consumers t o ease the impact of rising electricity costs. This rebate took effect with electricity consumed January 1, 2011 and will end on December 31, 2015. Many electricity distributors will pay consumers a lump sum on their first bill with the Ontario Clean Energy Benefit to cover the rebate credit calculated back to January 1, 2011. Beginning September 1, 2012, the 10% rebate will be applied to the first 3,000 kilowatt hours of electricity consumed per month. With the 3,000 kilowatt hour per month cap in place the Ontario Clean Energy Benefit will continue to provide a full 10 per cent rebate to almost all residential consumers, while allowing small businesses and farms to continue to receive the benefit on the first 3,000 kilowatt hours they use. A typical family of four people uses, on average, 800 kilowatt hours per month and will continue to receive the full rebate of 10% off their electricity bill. Northern Ontario Energy Credit: Is a new refundable tax credit for low- to middle-income families and individuals living in northern Ontario, effective for 2010 and later years. The maximum annual credit for a single person is $137, and for a family (including single parents), $210. These credits are reduced when a single person's income exceeds $36,806 and a family's income exceeds $47,322 , and are completely eliminated when a single person's income exceeds $50,506 and a family's income exceeds $68,322. Starting July 2012, the Northern Ontario Energy Credit will be paid monthly instead of quarterly. Ontario Trillium Benefit (formerly Ontario Energy and Property Tax Credit) : Helps low- to moderate-income individuals 18 years of age and older, and families, with the sales tax they pay on energy and with property taxes. If you pay rent or property tax, you could get up to $946 ($736 in property tax relief and up to $210 in relief for the sales tax on energy). If you are a senior, you could get up to $1,078 ($868 in property tax relief and up to $210 in relief for the sales tax on energy). If you are a student and live in a designated Ontario university, college or private school residence, you may qualify for $25.
- The Debt Retirement Charge (DRC) is intended to help pay down the legacy debt of the former Ontario Hydro. Although the debt was acquired in the past, the facilities that were financed by the debt are still in use and continue to supply electricity to customers today. For this reason, today's customers contribute to paying down the debt through the DRC. November 18, 2010 : Minister of Energy announces Ontario Clean Energy Benefit (OCEB), which will provide a 10% benefit to consumers t o ease the impact of rising electricity costs. This rebate took effect with electricity consumed January 1, 2011 and will end on December 31, 2015. Many electricity distributors will pay consumers a lump sum on their first bill with the Ontario Clean Energy Benefit to cover the rebate credit calculated back to January 1, 2011. Beginning September 1, 2012, the 10% rebate will be applied to the first 3,000 kilowatt hours of electricity consumed per month. With the 3,000 kilowatt hour per month cap in place the Ontario Clean Energy Benefit will continue to provide a full 10 per cent rebate to almost all residential consumers, while allowing small businesses and farms to continue to receive the benefit on the first 3,000 kilowatt hours they use. A typical family of four people uses, on average, 800 kilowatt hours per month and will continue to receive the full rebate of 10% off their electricity bill. Northern Ontario Energy Credit: Is a new refundable tax credit for low- to middle-income families and individuals living in northern Ontario, effective for 2010 and later years. The maximum annual credit for a single person is $137, and for a family (including single parents), $210. These credits are reduced when a single person's income exceeds $36,806 and a family's income exceeds $47,322 , and are completely eliminated when a single person's income exceeds $50,506 and a family's income exceeds $68,322. Starting July 2012, the Northern Ontario Energy Credit will be paid monthly instead of quarterly. Ontario Trillium Benefit (formerly Ontario Energy and Property Tax Credit) : Helps low- to moderate-income individuals 18 years of age and older, and families, with the sales tax they pay on energy and with property taxes. If you pay rent or property tax, you could get up to $946 ($736 in property tax relief and up to $210 in relief for the sales tax on energy). If you are a senior, you could get up to $1,078 ($868 in property tax relief and up to $210 in relief for the sales tax on energy). If you are a student and live in a designated Ontario university, college or private school residence, you may qualify for $25.
- Rising energy costs have an impact on all Ontarians, but low-income households are hit hardest. “ Energy poverty” is the disproportionate burden of electricity, natural gas and other utility costs on low-income households which reduce the funds available for food, clothing, medicine and other basic necessities. Inability to pay utilities is second only to inability to pay rent as a reason for homelessness.
- Home energy burden = Home energy bill / Household income Total shelter burdens affordable at 30% of income. Utility costs should be no more than 20% of shelter costs. Utility costs affordable at 6% of income. (20% x 30% = 6%).
- Gordon Kaiser found: Board has jurisdiction to approve special rates for low-income consumers in appropriate cases. This Board has jurisdiction to set just and reasonable rates, to act in public interst, and to use any rate-making technique considered appropriate. The fact that the Board may be considered an “economic regulator” does not limit that jurisdiction. Referred to an earlier Divisional Court case that said “the Board is entitled in setting rates to consider “broad public policy” – which to Kaiser suggested that in the appropriate circumstances the Board can consider ability to pay in setting rates to meet broad policy concerns – and that access to an essential service may be such a concern
- Year-round, province-wide LEAP Energy Financial Assistance is a grant program ($500 or $600) intended to provide emergency relief to eligible low-income consumers who may be experiencing difficultly paying their bill – funded by electricity and gas distributors (about $5 million annually), greater of 0.12% of distribution revenue or $2,000 Electricity customer service rules (in effect October 1, 2011) include: Waiving or refunding security deposits Equal billing or equal payment plan options suspending collection action for a period of 21 days while applicant is assessed for LEAP EFA Extended time periods to repay arrears, and no further late payment charges after entering into an arrears management plan Waiving of service charges related to: collection, disconnection, non-payment, load control devices Gas customer service rules (in effect January 1, 2013): Similar to electricity rules, but not as extensive or prescriptive (more discretion) At no cost to the eligible low-income consumer - saveONenergy HOME ASSISTANCE program (HAP) is offered through participating local electric utilities and funded by the Ontario Power Authority – weather-stripping and insulation, new, energy-efficient refrigerator or air conditioner, programmable thermostat Union Gas & EGDI both offering Home Weatherization Programs – energy audits (pre and post), insulation in attic, basement, walls,