The expansion of a discount program that would lower utility rates for almost 10,000 low-income Seattleites will cost two local utility companies almost $4.5 million before the increased costs can be spread across rate payers next year.
The Utility Discount Program, or UDP, provides 50- to 60-percent discounts on power, water and garbage by spreading the additional cost across other rate payers. The expansion of the discount program to Seattle Housing Authority (SHA) tenants is set to start in August, after the 2016 customer rates were locked in.
That means the utilities will swallow the costs of the expansion for the remainder of 2016. The general fund will take a $400,000 hit in 2016 and at least $600,000 the following year because of reduced utility taxes.
“Revenues in the general fund fluctuate and what that means for the rest of city business remains to be seen,” said Peter Lindsay, a member of council central staff.
If all 10,000 households enroll in the program, the bump to other utilities users will be .05 percent in future years, Lindsay said.
It’s likely that most SHA tenants will enroll in the program.
The UDP requires users to make less than 70 percent of the area’s medium income, or $60,108 for a family of four, to receive a discount. SHA’s income requirements are stricter, so the agreement with City Hall allows residents to enroll in the program automatically.
Previously, UDP wasn’t available to SHA tenants because they receive a federal subsidy that includes a utility provision. The concern was that because utilities were already accounted for in their housing subsidy, tenants would continue paying the same amount and the actual benefit of the program would accrue to SHA.
Although that turned out not to be true, the belief was perpetuated for many years. Receipt of a federal subsidy was the second most common reason that people were denied access to the program, Lindsay said.
The push to enroll more low-income residents in the program began in 2014 when city officials realized how few people were taking advantage of the discount program.
By 2015, officials estimated that 75,000 people likely were eligible for the benefit, although just under 18,000 had signed up at that time (RC, “Utility Discount Program to add thousands to roster,” Aug. 19, 2015).
Mayor Ed Murray announced his intention to double the number of enrollees by 2018. This deal with SHA could top that goal, bringing the total number of participants to 31,000.
Councilmember Mike O’Brien called the change an “outstanding step forward to those who need it,” while Councilmember Kshama Sawant urged optimism, but vigilance.
“A majority are not enrolled in the program, so there’s a lot of potential,” she said.