Date Requested:February 06, 2012
Time Requested:11:27 AM
Agency: State Tax Department
CBD Number: Version: Bill Number: Resolution Number:
2012R1729 Comm. Sub. SB391
CBD Subject: UTILITY RATES
FUND(S)
General Revenue Fund
Sources of Revenue
General Fund
Legislation creates:
Neither Program nor Fund

Fiscal Note Summary

Effect this measure will have on costs and revenues of state government.

    The stated purpose of this bill is to expand the reduced utility rates for low-income residential customers to those receiving SSDI.
    
    As written, this bill would require gas and electric utilities to extend the special reduced rates to residential utility customers receiving Social Security Disability Insurance (SSDI). Additionally, the bill updates the names of two of the programs that would qualify recipient residential utility customers for the special reduced rates. The special reduced rates offered by the gas and electric utilities to their eligible customers are 20 percent less than the rates that would be applied if the customer did not qualify for the program. The gas and electric utilities offering the special reduced rates are granted an existing tax credit in the amount certified by the Public Service Commission as the revenue deficiency attributable to providing the special reduced rates.
    
    Based upon information provided by the Consumer Advocate Division of the Public Service Commission, the extension of the special reduced rates to residential customers receiving Social Security Disability Insurance for the billing months of December, January, February, March, and April would increase the discounts offered by gas and electric utilities by roughly $2.8 million per year. The increase in discounts of roughly $2.8 million would provide the gas and electric utilities offering the reduced rates with additional tax credits of $2.8 million, which would result in a reduction in the General Revenue Fund of roughly $2.8 million per year beginning in FY2013.
    
    The Consumer Advocate Division of the Public Service Commission also provided the following information on other possible expansions of the special reduced gas and electric utility rates:
    
    Expansion from Current Program--Amount
    
    1. Extend to year-round application (current recipients only)--$4.4 million
    
    2. Extend to households with SSDI--$2.8 million
    
    3. Extend to households with SSDI and year-round application--$5.0 million
    
    4. Extend to households with SNAP (under age 60)--$8.0 million
    
    5. Extend to households with SNAP (under age 60)and year-round application--$14.2 million
    
    Expansion option 2 above is provided in the bill, as written.
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Public Service Commission may incur some additional administrative costs due to passage of this bill.

Fiscal Note Detail
Over-all effect
Effect of Proposal Fiscal Year
2012
Increase/Decrease
(use"-")
2013
Increase/Decrease
(use"-")
Fiscal Year
(Upon Full
Implementation)
1. Estmated Total Cost 0 0 0
Personal Services 0 0 0
Current Expenses 0 0 0
Repairs and Alterations 0 0 0
Assets 0 0 0
Other 0 0 0
2. Estimated Total Revenues 0 -2,800,000 -2,800,000
3. Explanation of above estimates (including long-range effect):
    Passage of this bill would require gas and electric utilities to extend the special reduced rates to residential utility customers receiving Social Security Disability Insurance (SSDI). Additionally, the bill updates the names of two of the programs that would qualify recipient residential utility customers for the special reduced rates. The special reduced rates offered by the gas and electric utilities to their eligible customers are 20 percent less than the rates that would be applied if the customer did not qualify for the program. The gas and electric utilities offering the special reduced rates are granted an existing tax credit in the amount certified by the Public Service Commission as the revenue deficiency attributable to providing the special reduced rates.
    
    Based upon information provided by the Consumer Advocate Division of the Public Service Commission, the extension of the special reduced rates to residential customers receiving Social Security Disability Insurance for the billing months of December, January, February, March, and April would increase the discounts offered by gas and electric utilities by roughly $2.8 million per year. The increase in discounts of roughly $2.8 million would provide the gas and electric utilities offering the reduced rates with additional tax credits of $2.8 million, which would result in a reduction in the General Revenue Fund of roughly $2.8 million per year beginning in FY2013.
    The Consumer Advocate Division of the Public Service Commission also provided the following information on other possible expansions of the special reduced gas and electric utility rates:
    
    Expansion from Current Program-- Amount
    
    1. Extend to year-round application (current recipients only)--$4.4 million
    
    2. Extend to households with SSDI--$2.8 million
    
    3. Extend to households with SSDI and year-round application--$5.0 million
    
    4. Extend to households with SNAP (under age 60)--$8.0 million
    
    5. Extend to households with SNAP (under age 60)and year-round application--$14.2 million
    
    Expansion option 2 above is provided in the bill, as written.
    
    The number of additional utility customers that would receive the special reduced rates, as determined by the Consumer Advocate Division of the Public Service Commission is as follows:
    
    Expansion from Current Program--Additional Customers
    
    1. Extend to year-round application (current recipients only)--0
    
    2. Extend to households with SSDI--17,799
    
    3. Extend to households with SSDI and year-round application--17,799
    
    4. Extend to households with SNAP (under age 60)--51,043
    
    5. Extend to households with SNAP (under age 60)and year-round application--51,043
    
    Additional administrative costs to the State Tax Department associated with passage of this bill would be minimal. The Public Service Commission may incur some additional administrative costs due to passage of this bill.
    


Memorandum
Person submitting Fiscal Note:
Mark Muchow
Email Address:
kerri.r.petry@wv.gov