June 5, 2006 – A bill giving senior citizens a 10 percent discount on their utility bills is ambiguous and would hurt other ratepayers, according to testifiers at a Health, Hospitals and Human Services Committee meeting Monday.
V.I. Water and Power Authority officials further stated that implementing such a discount would cause a substantial loss in revenues – estimated at $3 million annually–which would financially hamper the utility.
"For every subsidy there must be subsidizer," Nellon L. Bowry, WAPA chief financial officer said. "And since WAPA will not be able to absorb the significant losses caused by the discount, some or all of the remaining customers would have to pay for the preferential rates being offered to these individuals who are 60 years of age and older."
He added that WAPA could not shoulder the additional burden since it is already in "dire fiscal condition due to $28 million owed in deferred, or unbilled, fuel costs." He said the utility would immediately be forced to seek relief from the Public Services Commission, which would adjust rates to make up for the revenue loss.
Bowry also said that to grant a discount to individuals based on age rather than income is "discriminatory."
"If the intent of the bill is to ease the financial burden of high utility bills, then why is the discount based on age instead of circumstance," he asked. "After all, there are many wealthy senior citizens among our residential class of customers. It would be patently unjust if this bill resulted in requiring poor customers who are younger than 60 to subsidize wealthy customers who are 60 and older."
Sen. Liston Davis, the bill's sponsor, said that while he anticipated the bill would be "heatedly debated," he did not want to "pass on" another rate increase to the consumer. "But at the same time, we can't afford to turn a blind eye or deaf ear to an issue that's polarizing the community," he added.
Davis explained that many seniors are living on fixed incomes, as low as $400 a month, and had to choose "whether to eat, buy groceries, pay for rent or buy medication."
"If they get a $200 electric bill, then their decisions are going to be even harder," he said.
"A lot of seniors have come to our offices recently requesting help on how to make ends meet," added Sen. Pedro "Pete" Encarnacion.
Other testifiers at the meeting said they needed more information about how the discount would be implemented before they could decide whether to support or oppose the bill. "We're happy the dialogue has been opened about this issue," Denyce Singleton, state director of AARP Virgin Islands, said. "But we really don't know how this is supposed to be accomplished, since no funding source is specified. We need a mechanism we could utilize."
Human Services Commissioner Sedonie Halbert suggested that senators give more money to the department's Energy Assistance Program, which assists low income families and senior citizens in paying their utility bills.
She said in FY 2006, the Legislature appropriated $300,000 to the program, which has allowed the department to specifically provide senior citizens with assistance every month. "To date, the department has served approximately 585 seniors, and we continue to process new applications for assistance," she said, adding that more seniors would be served if the Senate decides to appropriate additional money.
While senators agreed earlier in the meeting to hold the bill for further amendments, many used the meeting as an outlet for their frustrations and questioned Bowry about WAPA's plans to lower rates for all residents throughout the territory. "I am disgusted with the manner of WAPA, its board and the PSC in getting us to alternative energy sources," Sen. Usie R. Richards said.
While Bowry assured senators that WAPA is moving ahead with various cost-saving initiatives, he also said that the issue "of the rise in fuel is bigger than WAPA" and suggested that residents look at conserving energy.
"We are not going to go back to $23, $24 a barrel," he said. "So we have to change our habits."
Senators unanimously voted to hold the bill in committee for further consideration, along with another bill that proposes that employees working at semi-autonomous and autonomous government agencies be covered by the health insurance policy currently offered by the government.
Present at Monday's meeting were Sens. Craig W. Barshinger, Lorraine L. Berry, Encarnacion, Norman Jn Baptiste, Richards and noncommittee members Davis and Ronald E. Russell.
Sens. Adlah "Foncie" Donastorg and Neville James were absent.
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