Who pays the bill?

This is the second of a two-part series on the question of subsidizing the utility bills of low-income Maine residents.

Maine is at the threshhold of making major decisions that will define the economic relationship between the poor, their utility companies, the majority of consumers and government. It is critical for the poor and for the longterm interests of society that the Legislature, which in the past has been weak and vacillating on this issue, confront the policy question directly, openly and deliberately.

To this moment, public policy on the issue of how low-income residents will pay for telephone or electrical service has been created either by default, through regulatory fiat or in piecemeal fashion in response to crisis or political whim.

Residents who meet income guidelines can qualify for Lifeline phone service and lower fees for connection. This public policy, such as it is, is subsidized by all telephone subscribers, whether or not they actually can afford to pay to underwrite someone else’s telephone service. The state has a needs test to plug citizens into the subsidy end. There is, however, no income-ability test for the subsidizers. People who faithfully pay their bills quietly and automatically become underwriters of this hidden welfare system.

There is no similar direct subsidy for electric energy, but the state has settled on a totally unsatsifactory way to deal with the problem of power bills and indigence. It has ordered power companies not to threaten poor customers with disconnection during the winter. This humane but superficial gesture on the part of state government is totally inadequate. The poor who cannot pay their bills in January generally cannot pay them in July, especially when they have run up a debt with the power company during the cold months.

Some options and observations:

Accept the fact that some level of basic utility service is part of the total societal bill for the poor. If the people of this state believe that a telephone connection is essential for everyone, or that electricity is a necessity, an elaborate welfare system already exists under the Department of Human Services to make these services available. The Legislature should have the courage to use it. Utility companies should not be making and executing public welfare policy.

Ratepayers — consumers actually paying for electricity, telephone service or other utility programs — should not be subsidizing the poor through their utility bills. This is a regressive tax.

Utility billing systems are an attractive collection-and-distribution mechanism, providing a convenient way for the Legislature and regulators to take money from one group of citizens to subsidize other citizens without calling it a tax, but the process is cowardly on the part of government and unfair to utilities and their customers.

Give the utilities greater leverage in collecting money from consumers who have run up large bills. Somewhere between the existing system, which totally ties the hands of utilities, and the other extreme, ruthlessly shutting off residential power, is a compassionate, realistic policy that will allow utilities to collect what is due in a timely fashion while protecting the poor from unreasonable consequences of failing to pay their bills. Here again, however, the state never will define such a policy if it is afraid to openly confront the subsidy issue.

Many of the poor with astronomical electric bills have them because state policy allows landlords to chop up older homes or convert existing units to electric resistance space heating. Landlords then place the heating burden on tenants who wind up on the welfare and subsidy rolls. Electric heat is cheap to install compared with oil or other comparable systems. In some applications it makes sense. But in older, poorly constructed, inadequately insulated units it is prescription for financial disaster for the tenant and the taxpayer.

According to Public Advocate Steve Ward, it is not unusual for these low-income tenants to have accumulated, unpaid winter electric bills of $2,000 or more. These people commonly use three or four times the electricity of other consumers. It isn’t the fault of the low-income tenants with electric heat, but it is absurd for taxpayers and ratepayers to continue this expensive subsidy. The state should have construction and efficiency standards for any apartment for which a subsidy is requested, regardless of the heating source.

The heart of this utility subsidy issue is a simple principle: Maine government should be honest with its people. If the state feels it must have a tax and a subsidy, an appropriate process already exists: Propose such a remedy. Openly discuss it, with public comment. Vote on the proposal.

The poor will not be helped, the system will not be fair to all ratepayers and important aspects of public policy toward utilities will not be resolved until the Legislature finds the courage to plug itself into this debate.