RD671 - Recommendations for Implementation of the Percentage of Income Payment Program – December 17, 2020

Executive Summary:

Chapters 1194 and 1193 of the 2020 Acts of Assembly, also known as the Virginia Clean Economy Act (VCEA) amended Title 56, Chapter 23 of the Code of Virginia, the Virginia Electric Utility Regulation Act (the Act). The Act, as amended by VCEA, establishes mandatory renewable portfolio standards, enhances renewable generation and energy storage development, requires the retirement of certain generation units, establishes energy efficiency targets, and expands net metering. In addition, § 56-585.6 was added to Chapter 23, establishing the Percentage of Income Payment Program (PIPP). The Department of Housing and Community Development and Department of Social Services (the Agencies) were directed under the 12th enactment clause of the VCEA to convene a stakeholder working group and develop recommendations regarding the implementation of PIPP.

The VCEA established two overarching objectives for PIPP:

• Reduce the energy burden of eligible participants by limiting electric bill payments directly to no more than six percent of the eligible participant's annual household income if the household's heating source is anything other than electricity, and to no more than 10 percent of an eligible participant's annual household income on electricity costs if the household's heating source is electricity, and

• Reduce the amount of electricity used by the eligible participant's household through participation in weatherization or energy efficiency programs and energy conservation education programs.

The State Corporation Commission is directed to set the rates, terms, and conditions of a non-bypassable universal service fee to fund the Percentage of Income Payment Program (PIPP). Customers of Dominion and Appalachian Power Company will be eligible to participate in this program. The VCEA requires the Commission to issue a final order and establish the rates by December 31, 2020. At this time, the non-bypassable universal service fee will not be collected from utility customers as defined in statute until the program is established.

The agencies and various stakeholders participated in the SCC hearings to provide direction and clarity towards setting the universal service fee. The information contained in this report is the implementation plan from DHCD and DSS for PIPP. The report also includes options the General Assembly could consider to maximize the impact of the PIPP.