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Saturday, April 30, 2016

Senate approves bill to make Henry Shelton Act more effective

Changes aim to help struggling families earn utility debt forgiveness

The Rhode Island Senate approved legislation sponsored by Sen. Joshua Miller (co-sponsored by Sen. Sue Sosnowski) making it easier for struggling families, particularly those transitioning from homelessness to permanent housing, to earn forgiveness for utility debt.

The legislation makes changes to the Henry Shelton Act, named after the longtime anti-poverty and social justice activist and founder of the George Wiley Center in Pawtucket, to allow people who enroll in the debt management plan to earn incremental forgiveness over the course of a year, instead of earning full forgiveness only if they successfully complete a three-year plan.

Senator Miller, who was also the sponsor of the Henry Shelton Act when it became law in 2011, said the three-year arrangement is proving to be less effective than hoped because those who are having trouble paying their monthly bills also struggle with paying down their debt on top of it, and if they cannot complete all three years of the current program, they get no relief.

The legislation passed today (2016-S 2087A) is based on Massachusetts’ utility debt forgiveness program. It will allow participants to get one-twelfth of their arrearage forgiven for every month of successful payment, for up to $1,500 of forgiveness in a year.

It would allow Low Income Home Energy Assistance Program (LIHEAP)- eligible customers with an account balance that is at least $300 and 60 days past due, to earn debt forgiveness by making monthly payments based on their average bill.

With each payment they make over the course of the year, 1/12th of their arrearage would be forgiven. If their outstanding balance is greater than $1,500, the plan can be extended for more than 12 months.

Customers whose utilities have already been disconnected would first have to make a 25-percent down payment to restore them, or 10 percent when the Public Utilities Commission has adopted emergency regulations, as it currently has. The changes to the program would become effective Sept. 1.

“The point of the Henry Shelton Act is to help Rhode Islanders keep their utilities on and, with some considerable effort on their part, erase their debt. There’s no reason it has to be an all-or-nothing proposition. It’s more effective when people can at least wipe out some of their debt for the time they succeed in the program than to have them make it part of the way and get nothing. These improvements will make the program more effective and will better encourage those struggling with utility debt to participate, get out of debt, and keep their utilities on,” said Senator Miller (D-Dist. 28, Cranston, Providence).

During the legislative process this session, the bill was amended to address the needs of homeless customers transitioning to permanent housing. The homeless do not have existing service that would allow them to qualify for the program, and most would struggle to save enough money for the 25-percent down payment necessary for restoration of their service.

The amended version of the bill would set aside 5 percent of the LIHEAP Enhancement Fund to provide crisis grants to those exiting shelters for their down payments. It would also allow homeless service providers to provide the documentation of their qualification for the program to the Department of Human Services.

“The Henry Shelton Act is meant to help those in need get their services restored, keep them on and get out from under the weight of debt. I’m proud of the work we’ve done to retool it so it works more effectively, and I’m especially happy that it will now offer the homeless both hope and help in moving back into housing,” said Senator Miller.

Additionally, the legislation requires the Public Utilities Commission to provide two reports to lawmakers and the governor.

One would be required annually, with the first due Nov. 15, 2017, evaluating the effectiveness of this arrearage program and making any recommendations the PUC thinks would improve it.

The second, due Nov. 1, 2018, would require the PUC to conduct a comprehensive review of all utility- and energy- related programs and policies impacting protected classes and low-income ratepayers.