Credit: (AP Photo/Gerry Broome)

New Jersey plans to keep an energy assistance program it expanded to help more people in the midst of the COVID-19 pandemic, when thousands of households were unable to pay monthly heating and electric bills. 

The New Jersey Board of Public Utilities is proposing to make permanent what were billed as two-year temporary changes in the Universal Service Fund and Fresh Start, a program that helps low-income households pay utility bills. The program was revised to allow some middle-income households to tap into it after unemployment soared during the pandemic. 

The pandemic created both a health and economic crisis, one that worsened the problem of high utility bills that were already unaffordable for many, according to proponents of the expansion. As of last fall, nearly 900,000 customers were still in arrears, with approximately $436 million owed, according to AARP. 

Set to expire 

The temporary changes in the program are due to expire in September without action by the board. 

One of the more significant changes in the program involved an increase in the income limits from 180% of the federal poverty level to 400% so that more customers became eligible for monthly credits to help pay their bills. The monthly cap on benefits also went up from $150 to $180. 

‘It is important to help those in need, but if we continue to raise rates to do so, we will put those just barely getting by into financial jeopardy and could create an unfortunate cycle whereby helping some, we harm more.’ — Brian Lipman, director, Division of Rate Counsel 

For a family of four, the qualifying income threshold jumped from roughly $48,000 to $104,000. 

The BPU’s straw proposal reflects the need to permanently expand the program, said Evelyn Liebman, director of advocacy for AARP. “We have long called for an expansion of the program and the straw proposal is a start,’’ she said. 

Hundreds of thousands of customers are still struggling with electric and gas bills that are not affordable, particularly during a time of high inflation and higher costs of living, according to Liebman. The state also should consider the need for additional federal COVID-19 relief funds to pay for the program along with other sources of revenue, she said. 

Concern about raising rates 

Brian Lipman, director of the Division of Rate Counsel, said he remains concerned about the significant number of ratepayers unable to afford their bills, noting utility rates are simply too expensive for many. He said he backs taking action to protect the most vulnerable but is concerned about the lack of data to confirm the changes are helping customers. 

“It is important to help those in need, but if we continue to raise rates to do so, we will put those just barely getting by into financial jeopardy and could create an unfortunate cycle whereby helping some, we harm more,” he said. 

Typically, the state spends upwards of $100 million each year on the Universal Service Fund. 

Under the Fresh Start program, it offers customers a one-time opportunity to eliminate overdue balances on any remaining COVID-19-related arrears. The gas and electric utilities administering the program will enroll any USF participant with $60 or more in arrears regardless of the customer’s past participation in the program from Oct. 1 through Sept. 30, 2024. 

Prior to Oct. 1, 2021 (when the temporary changes took effect), only first-time enrollees with $60 or more in arrears in overdue balances were eligible for Fresh Start enrollment.