Questions and Answers About “Commitment to Community” Programs and Wisconsin’s Public Benefits Law
Prepared by the Wisconsin Electric Cooperative Association and the Municipal Electric Utilities of Wisconsin.
In April of 1999, as a result of months of negotiations and discussion between electric utilities, municipal electric utilities and cooperatives, consumer groups, business and labor groups, and other stakeholders, Governor Thompson submitted a consensus proposal to the Legislature to improve electric reliability in this state. The proposal was called Reliability 2000. The proposal was included in 1999 Wisconsin Act 9, the state biennial budget bill, which passed in October 1999 and was signed into law.
The law affects many areas of electric energy policy, such as renewable energy, the asset cap provisions of the Utility Holding Company law, and many more topics. One area the law addresses is public benefits: those programs designed to foster and improve energy conservation and efficiency and low-income energy assistance.
Because Wisconsin will remain vulnerable to electricity shortages over the next several years, it is imperative that conservation and efficiency be encouraged.
Electric cooperatives and municipal utilities will now have the obligation to collect and spend an average of $1.44 per meter per month to support these programs. This fee is similar for customers of investor-owned utilities. The following are questions and answers about this fee and how it will be used.
Questions and Answers About Electric Cooperative Public Benefits September 2000
Q: What is the “nontaxable program charge” on my electric bill?
A: To help address the serious electric power shortages that Wisconsin experienced in the past several years, business, labor, utilities, consumer and other groups supported a change in the law to ensure financing for the state’s energy conservation and low-income energy assistance programs. The proposal was submitted to the Legislature by Governor Thompson in April 1999, and the resulting program charge was passed as part of the state budget bill in October 1999.
Q: Why does the state need to improve energy conservation and low-income energy assistance programs?
A: In recent years, electric energy supply has not kept up with demand. No single strategy will be adequate to meet our growing electricity needs. Instead, we need to develop a balanced approach including many things: constructing new generating plants, easing congestion on overloaded transmission lines and improving energy efficiency and conservation. Reliable electric service for the citizens, farms and businesses of Wisconsin depends on all three. The “Commitment to Community” programs designed and operated by your municipal electric utility or electric cooperative will help achieve the important goals of energy conservation and efficiency.
Q: What is “Commitment to Community?”
A: That’s the name your electric cooperative and municipal electric utilities have chosen for their special approach to managing the programs financed by the nontaxable program charge-also known as a public benefits fee. Investor—owned utilities will remit the fees they collect to the Wisconsin Department of Administration, which is responsible for operating statewide energy conservation and low-income energy assistance programs. Electric cooperatives and municipal utilities have the option to create and operate their own programs under the title “Commitment to Community.” Under this approach, the fees paid by municipal and co-op customers can be kept in the communities where they’re collected, to be used for local needs.
Q: How much is the charge and when did it start?
A: For electric cooperatives and municipal electric utilities, the charge is established by law at an average of $1.44 per meter per month. All utilities must begin collecting the fee for these public benefits programs starting with the monthly bills mailed in October 2000, for electricity used in September 2000.
Some utilities and cooperatives may choose to cap the charge at 3% of each monthly bill, or $1.44, whichever is less. Other cooperatives and municipal electric utilities have decided to follow the letter of the law by limiting the charge to 3% of electric bills over the next eight years.
Q: Are all electric customers in the state required to pay these charges?
A: Yes. However the charges may vary among utilities. Some cooperatives and municipal electric utilities, for example, calculate credits for programs they already offer. The charges may also vary between residential, commercial and industrial customers.
Q: What if I refuse to pay the charge?
A: This charge is considered part of your monthly electric bill. If you don’t pay the charge, it will be treated as an incomplete bill payment.
Q: Will this charge appear on my gas or other fuel bill?
A: No. The program charge is only applied to electric bills, and as the designation “nontaxable program charge” implies, it’s not subject to the state sales tax.
Q: Do other states require similar programs and charges?
A: Yes. At least 19 and the District of Columbia. Other states have similar programs in place and funded in the same way.
Q: Who controls how this money is spent?
A: Your electric cooperative’s board of directors, or, in the case of municipal electric utilities, your local utility commission, city council or village board will have primary oversight. In addition, consumer-owned utilities must make an annual report to the Wisconsin Department of Administration on the amounts collected and how the funds are spent. The Department has published a broad list of conservation-related programs and activities for which public benefits money can be used, and additional ideas may qualify.
Q: What are examples of “Commitment to Community” programs?
A: Examples include energy audits, energy conservation and efficiency programs, low-income weatherization programs, programs to reduce energy demand or make energy use more efficient in residential, farm, commercial and industrial buildings, energy assistance to low-income households and other programs to meet these needs as determined by local leaders of consumer-owned utilities.
Q: If I have ideas for effective energy conservation/efficiency programs, or low-income energy assistance programs, who should I contact?
A: Consumer-owned utilities welcome public input and suggestions on improving their energy efficiency and conservation efforts. If you have suggestions on how this important work can be done more efficiently or in a more innovative manner, please call the member services director of your electric cooperative or general manager or superintendent of your municipal electric utility.
Q: Is this fee considered a charitable contribution?
A. No; If you currently deduct part of your electric bill on your tax return, contact your tax advisor and see how this fee should be accounted for.