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Gordon D. Fox: Our program for relieving heating woes

Sunday, December 18, 2005

NOW THAT that the leaves have fallen and the temperatures are dropping, Rhode Islanders' anxieties about high heating bills are rising. All of us will be affected by these increased costs. But those already struggling with their bills, particularly the low-income elderly and families, are going to be hurt the most.

Some will be forced to make impossible choices between heating their homes and paying for vital medicines and food.

It will be a priority of the leadership of the Rhode Island House this coming session to help the state's most vulnerable citizens stay warm, and to make sure that the state is taking the necessary steps to increase conservation and efficiency in our homes and businesses. Our first order of business when the House reconvenes, in January, will be to introduce a comprehensive energy package, which will include the following initiatives:

Assistance for Low-Income Households. The steep increases in electric and natural-gas prices threaten to financially overwhelm low-income families and seniors this winter. To relieve this situation, we support a program that would reduce low-income families' utility bills to a set percentage of their income (a percentage-of-income payment plan, or PIPP). To pay for the program, we are considering using some of the proceeds from a recent $16.5 million settlement with National Grid and other possible funding sources, such as equalizing the gross-receipts tax on natural gas and electricity.

PIPP programs have been successful in New Jersey and New Hampshire, helping families pay their electric and natural-gas bills, reducing the number of disconnections and the amount of bad debt for the utilities, and providing rate relief for all utility consumers. A similar program was introduced by state Rep. Arthur Handy (D.-Cranston) last year, and supported by advocates for the poor, including Henry Shelton, of the Wiley Center.

This program would also free up more funds to help low-income oil customers. Because the PIPP program would help gas- and electric-heating customers, the federal Low Income Home Energy Assistance Program (LIHEAP) money that Rhode Island receives could be targeted to help oil customers.

The Keep R.I. Warm Fund. The PIPP program would take some time to get up and running, so this winter people would need to rely on LIHEAP. Unfortunately, the program has been flat-funded, despite the dramatic increase in heating costs and pleas from our congressional delegation to increase funds.

We will continue to press for adequate federal funding for this program, but we cannot sit idle and wait for Washington to act. Over the next few weeks, House Speaker William Murphy and I will investigate state-revenue streams to provide short-term assistance to Rhode Islanders. We will also approach Rhode Island corporations and other businesses to contribute to a new charitable fund, the Keep R.I. Warm Fund, which would supplement the LIHEAP program.

With more dollars from the state and the private sector, we will be able to increase the number of households served. This program is similar to the Keep Maine Warm charitable fund, created by Gov. John Baldacci.

Help for Middle-Class Households. No one is shielded from these record-breaking energy prices, not even those of us who consider ourselves to be comfortably middle class. We are investigating ways to relieve middle-class families from the financial pressure of high utility bills. Proposals include a $50 tax credit per household for heating-equipment tune-ups, programmable thermostats or water-heater wrappers. We are also considering a $350 tax deduction for families earning up to $75,000 to help defray heating costs. The average gas bill will increase $350 this year.

Many Rhode Islanders rent their homes and so have little control over the efficiency of their heating systems. To encourage landlords to update the mechanicals in rental units, we are researching tax credits for landlords to replace windows, furnaces and water heaters with Energy Star models.

Lead by Example. We urge Governor Carcieri to take a leadership role in ensuring that steps are taken to make our government more energy-efficient. If the state sets a strong example, individuals and business are likely to follow.

Governor Carcieri and his administration need to create a statewide energy plan and initiate an energy audit of government buildings. We need to educate state employees about simple measures they can take to save fuel and money, such as turning down thermostats, keeping radiators clear, turning off unnecessary lights and reporting problems such as broken thermostats and leaky windows. State transportation policies must be reviewed, to make sure the most efficient vehicles are being used. Our team will draft legislation to mandate that these actions take place.

Tax Holiday for Energy-Conservation Products. Updating older appliances with more efficient models is an effective way to reduce our consumption of energy. To encourage this, we propose a temporary sales-tax holiday on Energy Star and weatherization products. Air conditioners, ceiling fans, clothes washers, compact fluorescent light bulbs, programmable thermostats, refrigerators with the Energy Star label, and weatherization products such as caulk and insulation valued at less than $1,500 will be exempted from the state sales tax for a specified period. Georgia exempted sales tax on these products for a weekend in October, and the response was very positive. Connecticut recently passed a similar measure, and other Northeastern states are considering it.

Prudent Energy Purchasing. In 1996, the General Assembly passed the Utility Restructuring Act, which lets electricity customers switch to private energy suppliers to lower their costs. While few individual customers have found cheaper electricity than the price offered by National Grid, the Rhode Island League of Towns and Cities has created a purchasing pool of municipalities and saved its 35 member cities and towns over $7.4 million in electricity costs since 1999. We need to investigate these innovative purchasing pools to see if Rhode Island should develop a similar plan for electricity purchases.

A purchasing pool can also be used for oil. People's Power and Light Discount Heating Oil Service in Rhode Island can negotiate lower prices from dealers for its members. Again, we must look at how these programs work, and possibly use their model to buy fuel for the state's energy-assistance program.

Joint Committee on Energy Oversight. With the cooperation of the Senate, we will propose a Joint Committee on Energy Oversight. This committee would be charged with providing oversight and formulating a comprehensive energy plan to address affordability, efficiency and conservation. The committee would also make recommendations to create an emergency energy plan for hurricanes and other disasters.

The committee's first item should be to call for the Rhode Island Public Utilities Commission (PUC) to testify on the rationale behind the most recent electric and gas rate increases. The committee would also be charged with considering what process changes and additional powers might be required by the PUC to help lower-income households and reduce price spikes for all energy consumers, by requiring utilities to exercise due diligence in their energy-purchasing activities.

The leadership of the Rhode Island House is committed to acting quickly to alleviate the impending heating crisis and address the state's long-term energy needs. This initiative is a first step in ensuring that all Rhode Islanders stay warm this winter.

Gordon Fox is the majority leader of the Rhode Island House of Representatives.

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