Public Service Commission researches impact of utility rates on low-income citizens

Tuesday, September 11, 2012

The Missouri Public Service Commission (PSC) recently issued an analysis on the impact of rising utility rates on the elderly and lower-income citizens of Missouri.

The PSC has established a program to formulate ideas about rate-design alterations and other methods to reduce the effect of higher utility rates on the financially vulnerable customers.

PSC Commissioner Robert Kennedy says the program would permit the Office of Public Counsel, industrial utility groups and utility and advocacy groups such as AARP to brief the PSC on rate designs and other programs to assist low-income citizens with utility costs.

"In public hearings across the state, we are hearing about the impact rising utility rates have on low-income consumers," said Kennedy. "By opening these dockets, we are taking steps to help our citizens by exploring the feasibility of establishing a low-income rate."

The Commission said, in its order directing the investigation, it will consider if establishing a rate-class will be a practical solution for low-income citizens and the company's revenues and costs. The legality of a rate-class will also be considered by the Commission, as well as how the income of the participants could be verified, the effect of utility bad debt expense and the correct rates or rate-formulas for such a class.

The PSC has also considered expanding this measure beyond a rate-class system, to include exploration of other platforms to assist low-income residents in other states. The programs being considered are California's Low-Income Oversight Board, the Low Income Program (CARE) and the Family Rate Program (FERA). These programs are administered by the California Public Utility Commission.

"We began looking at this issue several year ago within the confines of a general rate case, but the issue deserves a more broad-based and comprehensive analysis," said Kennedy, "With these orders, the Commission is moving forward to explore all alternatives that are available to help mitigate the impact of rising rates on low-income Missourians."

Community members interested offering feedback on the proposed program must file initial comments by Sept. 7 and reply comments by Sept. 24.

Written comments can be addressed to the Commission at P.O. Box 360, Jefferson City, MO 65102.

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