Why Should Delaware Care?
Thousands of Delawareans have expressed outrage over shockingly high increases in their home energy bills this winter, which has led to a number of legislative proposals. Only House Bill 50 would currently offer direct financial assistance to those impacted though.
A House committee advanced a bill Wednesday that would provide direct financial aid to thousands of power customers who have been impacted by soaring energy bills in recent months.
House Bill 50, sponsored by House Natural Resources & Energy Committee Chair Debra Heffernan, is backed by all Democrats in the House and State Senate. It also received bipartisan support in its committee hearing to push it to the House floor, though some Republicans said they would not vote for it there.
The bill would create the Delaware Energy Fund that would help pay outstanding bills for families who are at or below 350% of the federal poverty rate, which equates to $112,525 in annual income for a family of four or about $54,000 for an individual. Funding would come from Regional Greenhouse Gas Initiative (RGGI) auction proceeds.
It would also allocate additional money to Delaware’s Low-Income Home Energy Assistance Program (LIHEAP), which provides bill pay assistance to those at 60% or less of state median income, which for a family of four equates to an annual income of less than $72,577.
Although the funds are not limited to Delmarva Power customers, it was created in reaction to the outcry by those who have received bills that are sometimes double or triple prior months amid a bitterly cold winter.
The legislation would sunset three years after enactment, meaning that ratepayers cannot grow used to any financial support. In order to qualify for the assistance, ratepayers also have to agree to a home energy audit, which could help identify energy efficiency opportunities that could reduce future bills.
Drew Slater, executive director of Energize Delaware, the state’s sustainable energy utility that would administer the funding, estimated that it could cost $3.7 million to $5.4 million annually, depending on how many households participated.
How much each eligible family could stand to receive toward paying down their bill hasn’t been determined either, Slater added. Programmatic details such as how to and how much funding to disseminate to any given applicant would be determined within 30 days of the bill’s passage.
How to determine need?
Republicans on the committee questioned why the eligibility threshold stretched so high, opining that those making more than $100,000 a year likely could afford even inflated energy bills from this winter.
“It seems to me that the people who are really having issues with their finances should maybe get more of the fund than the people making over $100,000 a year with a family of four,” Rep. Jeff Hilovsky (R-Long Neck) said.
His colleague, Rep. Rich Collins (R-Millsboro), agreed, and noted that there are likely hundreds of thousands of eligible households for the fund considering that the state’s median household income was about $80,000.
He also questioned how people would know that the assistance was made available, and Slater said that it would largely fall to a marketing campaign by Energize Delaware. Collins was dissatisfied with that answer.
“If you have a power bill, you’re paying into this fund [by virtue of the RGGI]. So if these poor people don’t know how to apply … but someone making $100,000 does know and applies, then it’s very likely … that some very, very poor person is going to help fund a family making over $112,000 a year,” he said.
Poor people learn to work in a budget, but if the economy is outpacing your budget, it’s hard to make ends meet.
rep. kamela smith
Rep. Kamela Smith (D-Bear) countered that many Delawareans are living paycheck-to-paycheck, including those who may be making more than six figures.
“It’s hard to say that poverty has a stopping point. We see rising costs throughout our economy, and so what was paying the bills for a family of four making $115,000 may sound a lot larger than somebody living as a family of four at $30,000,” she said. “Poor people learn to work in a budget, but if the economy is outpacing your budget, it’s hard to make ends meet.”
The fund’s origin
The millions in funding for the new Delaware Energy Fund would come from Delaware’s portion of the annual Regional Greenhouse Gas Initiative (RGGI) auction.
The RGGI is an 11-state cap-and-trade program for carbon dioxide emissions. At its simplest, the initiative places limits on how much carbon dioxide can be emitted by the largest coal, oil and natural gas-fired power plants in the region. To emit the greenhouse gas, power plants must purchase allowances at auction or on a secondary market.
In the 15 years of RGGI’s existence, emissions have fallen 44% as of 2022, which is faster than non-RGGI states.
The prices of the needed allowances spiked sharply last year though, reaching a high of $25.75 per short ton of carbon dioxide before falling slightly. Critics say these costs only drive up the cost of producing power at a time when the region needs more supply.
The proceeds of the quarterly auctions flow back to the states, which invest the funds in energy efficiency projects, low-income assistance, renewable energy development and more.
The RGGI auction proceeds would support those in the upper brackets of the eligibility range. Meanwhile, the legislature is also moving the state’s alternative compliance payments to help bolster the LIHEAP program for those on the lower end of the spectrum.
Those payments are made by Delmarva Power to the state instead of having to purchase more costly renewable energy in the market. Under the state’s renewable energy mandate, Delmarva Power must purchase 40% of its electricity from renewable sources or pay the ACP for every megawatt hour that it falls short.
In 2023, that payment totaled more than $13 million.
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