LOW INCOME ENERGY ASSISTANCE S.B. 353 (S-2), 880 (S-1), & 881 (S-1):
SUMMARY AS PASSED BY THE SENATE
Senate Bill 353 (Substitute S-2 as passed by the Senate)
Senate Bills 880 and 881 (Substitute S-1 as passed by the Senate)
Sponsor: Senator Veronica Klinefelt (S.B. 353)
Senator Sam Singh (S.B. 880)
Senator Rick Outman (S.B. 881)
Committee: Energy and Environment
Date Completed: 8-5-24
CONTENT
Senate Bill 353 (S-2) would amend the Michigan Energy Assistance Act to do the
following:
-- Beginning October 1, 2025, expand eligibility for energy assistance by changing
the qualifying household income from 150% of the Federal poverty level (FPL)
to 60% of the State median income.
-- Require the Department of Health and Human Services (DHHS) to prioritize
providing energy assistance to vulnerable populations.
-- Delete a provision prohibiting more than 30% of the Low-income Energy
Assistance Fund from being used outside of the Michigan Energy Assistance
Program's (MEAP) crisis season, which begins on November 1 and ends May 31.
-- Require the DHHS, in consultation with the Michigan Public Service Commission
(MPSC), to set a minimum allocation of funds that would have to be used by
entities with which the MPSC contracted.
-- Allow the DHHS to establish guidelines for verifying eligibility of all applicants to
ensure assistance funds were provided only to eligible low-income households.
Senate Bill 880 (S-1) would amend Public Act 3 of 1939, the Public Service
Commission law, to do the following:
-- Require the DHHS to ensure that the Low-income Energy Assistance Fund was
administered to promote Statewide access to the MEAP, collaboration between
the DHHS, the MPSC, energy providers, and entities that administered assistance
programs, and education and outreach.
-- Require, beginning March 1, 2027, the DHHS to provide to the House and Senate
appropriations subcommittee for the DHHS budget and the House and Senate
standing committees on energy a report concerning the Fund.
-- Require, beginning December 1, 2025, the State Treasurer to report to the MPSC
the total amount of money that was collected by the Fund and the remaining
balance of the Fund from the immediately preceding fiscal year.
-- Allow, beginning on the bill's effective date, the MPSC to increase the low-income
energy assistance funding factor by up to $0.25 each year; however, the funding
factor could not exceed $2.
-- Require, beginning in 2029, the MPSC to adjust the funding factor by the
percentage increase in the United States Consumer Price Index.
-- Limit the ability to opt-out of collecting a funding factor to an electric utility,
municipally owned electric utility, or cooperative electric utility with less than
45,000 residential electric customers.
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-- Require a utility that opted out to establish and fund an energy assistance
program that aided its residential customers for their electric and home heating
needs consistent with the eligibility requirements of the MEAP.
-- Require, beginning October 1, 2025, a utility that opted out to provide notice to
its residential customers of available energy assistance provided by the utility.
-- Allow the Attorney General (AG) or a utility customer to commence an action
against a utility if certain requirements were met.
Senate Bill 881 (S-1) would amend Public Act 3 of 1939 in line with changes
proposed by Senate Bill 880 (S-1).
Senate Bills 880 and 881 are tie-barred to each other and to Senate Bill 353.
Senate Bill 353 (S-2)
The MEAP
The Act requires the DHHS to provide energy assistance through payment or partial payment
of bills for electricity, natural gas, propane, heating, oil, or other heating fuels for eligible low-
income households through MEAP. Currently, "eligible low-income household" means a
household with a household income of not more than 150% of the Federal poverty guidelines.
The bill would sunset this definition on September 30, 2025.
After October 1, 2025, "eligible low-income household would mean a household with a
household income of not more than 60% of the State median income and whose electric utility
did not opt-out of collecting low-income energy assistance funding factor.1 "State median
income" would mean the State median income promulgated by the Secretary of the United
States Department of Health and Human Services in accordance with procedures established
under Section 2002 of the Social Security Act 2 and adjusted, in accordance with regulations
prescribed by the Secretary, to take into account the number of individuals in the household.
Generally, the Act requires energy assistance to include services that will enable participants
to become or move towards self-sufficiency. This includes assisting participants in using
energy services to optimize energy efficiency. The bill would delete this example. Instead, it
would specify that, among other things, energy assistance could include referral to
weatherization or energy waste reduction programs and services. Additionally, the bill would
require the DHHS to notify participants that they were eligible for other services under the
program, including energy waste reduction products and services offered by an energy
provider or a home weatherization assistance program.
The bill also would require the DHHS to prioritize providing energy assistance to vulnerable
populations. "Vulnerable population" would mean households experiencing energy insecurity
that have at least one member that meets the following criteria:
-- A child under five years of age.
-- An individual with a disability.
1
Under Public Act 3 of 1939, an electric utility, municipally owned electric utility, or cooperative electric
utility may elect to not collect a low-income energy assistance funding factor by annually filing a notice
with the MPSC by July 1. A utility that elects to not collect a low-income energy assistance funding factor
cannot shut off service to any residential customer from November 1 to April 15 for nonpayment of a
delinquent account.
2
Generally, Section 2002 of the Social Security Act entitles each state to payment for each fiscal year
in an amount equal to its allotment for that year, to be used by the state for services such as child care,
transportation, family planning, counseling, and more.
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-- An individual who was 60 years of age or older.
-- An individual who had experienced homelessness in the preceding 12 months and who
needed energy assistance to secure housing.
The Act allows the DHHS to use funds from Federal energy assistance programs and any funds
collected or appropriated to fund the MEAP. The DHHS can only use money from the Low-
Income Energy Assistance Fund for energy assistance.
The Act allows the DHHS to use money in the Fund for the MEAP's crisis season, which begins
on November 1 and ends on May 31 of each year. The Act specifies that up to 30% of the
funds received for MEAP may be spent outside of the crisis season. The bill would delete these
provisions.
The Act requires the DHHS to provide a report to the Legislature, the Senate and House
appropriations subcommittees on the DHHS's budget, the Senate and House committees on
issues related to energy, and the Senate and House Fiscal Agencies on how money from the
MEAP is distributed. The bill would require, beginning with the program year starting on
October 1, 2025, the annual report to be filed by March 1, 2027.
Additionally, the Act allows the DHHS, in consultation with the MPSC, to contract with an
entity to provide energy assistance. An entity with which the DHHS contracts must use at
least 92% of the funds received from the DHHS for energy assistance. An entity may use
between 90% and 92% of the funds received for energy assistance upon approval from the
DHHS. The bill would delete these provisions.
Instead, the bill would require the DHHS, in consultation with the MPSC, to set a minimum
allocation of funds that would have to be used by entities with which the MPSC contracted.
By October 1, 2025, the DHHS, in consultation with the MPSC, would have to provide
guidelines on the provision of self-sufficiency services. Starting with the program year that
began on October 1, 2026, the guidelines would have to be incorporated into performance
metrics.
Guidelines
The bill would allow the DHHS to establish guidelines for verifying eligibility of all applicants
to ensure assistance funds were provided only to eligible low-income households. In
establishing such guidelines, the DHHS would have to consider opportunities to incorporate
categorical eligibility. "Categorical eligibility" would mean policies that make a household
eligible for energy assistance based on the household's involvement in other low-income
assistance programs that used similar eligibility criteria.
The bill would not require an electric provider, natural gas provider, or other energy provider
to verify eligibility of program applicants.
Additional Definitions
Currently, "crisis" means one of the following:
-- An individual or recipient has received a past due notice on an energy bill for his or her
household.
-- A residential fuel tank is estimated to contain no more than 25% of its heating fuel
capacity.
-- A stated need for deliverable fuel or a nontraditional fuel source in which there is no meter
or regular energy bill provided.
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-- A notice that the balance in a prepayment account is below a minimum account.
The bill would amend the definition to allow a residential fuel tank to qualify as a crisis if it were
estimated to contain no more than 30% of its heating fuel capacity.
"Energy burden" would mean the percentage of annual household income required to pay a
household's home energy bills including electricity and home heating. "Energy insecurity" would
mean an energy burden above 6% of a household's annual income.
Senate Bill 880 (S-1)
Low-Income Energy Assistance Fund
Section 9t of the Act creates the Low-income Energy Assistance Fund within the State Treasury
to provide energy assistance for low-income households. The DHHS, in consultation with the
MPSC, must ensure that all money collected for the Fund from a geographic area is returned, to
the extent possible, to that geographic area.
The bill would require the DHHS to ensure that the Fund was administered to promote all the
following:
-- Statewide access to the MEAP, ensuring that funds collected from a specific geographic area
were, to the extent possible, returned to eligible low-income customers in that specific
geographic area.
-- Collaboration between the DHHS, the MPSC, energy providers, and entities that administered
assistance programs to ensure that eligible low-income customers in a geographic area were
receiving funds proportional to what customers in that geographic area were being assessed.
-- For energy providers and entities that administered assistance programs, education and
outreach on availability of the assistance programs and funding.
Reporting Requirements
Beginning March 1, 2027, and by each subsequent March 1, the DHHS would have to provide to
the House and Senate appropriations subcommittee for the DHHS budget and the House and
Senate standing committees on energy a report that contained all the following information:
-- The distribution of money from the Fund across the State.
-- A summary of total funds received and assistance awarded for each county in the State.
-- A summary of the education, marketing, and outreach to improve the distribution of funds.
The bill would allow the DHHS to combine this report with the report required under Section 3 of
the Michigan Energy Assistance Act. (Among other things, Section 3 requires the DHHS to provide
a report to the Legislature, its committees described above, and the Senate and House Fiscal
Agencies on how money from the MEAP is distributed.)
The bill also would require, beginning December 1, 2025, and by each subsequent December 1,
the State Treasurer to report to the MPSC the total amount of money that was collected by the
Fund and the remaining balance of the Fund from the immediately preceding fiscal year.
Low-Income Energy Assistance Funding Factor
Under the Act, the MPSC may, after an opportunity to comment, annually approve a low-income
energy assistance funding factor (funding factor) by July 31 of each year for the subsequent
fiscal year. The bill would change this date to May 1 of each year.
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Currently, the funding factor must be the same across all customer classes and may not
exceed $1. The amount used by the MPSC to calculate a funding factor during each fiscal year
may not exceed $50.0 million minus the amount appropriated from the General Fund in that
fiscal year for home energy assistance and the amount remaining in the Low-income Energy
Assistance Fund from the prior fiscal year. An electric utility, municipally owned electric utility,
or cooperative electric utility that collects money under the Act must remit that money to the
State Treasurer for deposit in the Fund on a monthly basis within 30 days after the last day
in each calendar month. The electric utility, municipally owned electric utility, or cooperative
electric utility must list the funding factor as a separate line item on each customer's bill.
Under the bill, before its effective date, the funding factor could not exceed $1. Beginning on
the bill's effective date, the MPSC could increase the funding factor to $1.25. The MPSC could
further increase the funding factor by $0.25 each subsequent year; however, the funding
factor could not exceed $2. The bill also would delete the cap on the amount used by the
MPSC to calculate the funding factor.
Additionally, beginning in 2029 and each year thereafter, the MPSC would have to adjust the
funding factor by the percentage increase in the United States Consumer Price Index for the
immediately preceding calendar year. 3 If the remaining balance in the Low-Income Energy
Assistance Fund reported by the MPSC were greater than 10% of the funds collected by the
funding factor in the fiscal year for which the remaining balance was reported, the MPSC
would have to set the funding factor at a rate at which the total funds collected would not
exceed the total amount of funds collected by the funding factor minus the remaining balance
reported.
Under the Act, an electric utility, municipally owned electric utility, or cooperative electric
utility may elect to not collect a funding factor by annually filing a notice with the MPSC by
July 1. The bill would limit the ability to opt-out of collecting a funding factor to an electric
utility, municipally owned electric utility, or cooperative electric utility with less than 45,000
residential electric customers. Additionally, it would change the date by which a notice would
have to be filed from July 1 to April 1. It would require the notice filed by a utility to include
the total number of retail billing meters the utility served in the State that would be subject
to the funding factor if the utility did not opt out. The utility would have to provide the number
of retail billing meters to the MPSC as both a total of retail billing meters in the utility's service
territory and a total of billing meters by county.
Opting Out of Collecting a Funding Factor
Currently, notwithstanding any other provision of the Act, an electric utility, municipally
owned electric utility, or cooperate electric utility that elects to not collect a funding factor
cannot shut off service to any residential customer from November 1 to April 15 for
nonpayment of a delinquent account. The bill would delete this provision.
Instead, the bill would require an electric utility, municipally owned electric utility, or
cooperative electric utility that opted out to establish and fund an energy assistance program
for its residential customers that provided assistance to its residential customers for their
electric and home heating needs consistent with the eligibility requirements of the MEAP. The
utilities would have to ensure that the funds available for energy assistance programs
established were sufficient to provide all eligible customers who applied, but the utility would
not be required to spend more for an energy assistance program than what the utility would
have collected from the funding factor if the utility did not opt out.
3
"Consumer Price Index" would mean the United States Consumer Price Index for all urban consumer
as defined and reported by the United States Department of Labor, Bureau of Labor Statistics.
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Beginning annually on October 1, 2025, an electric utility, municipally owned utility, or
cooperate electric utility that opted out of collecting the funding factor would have to provide
notice to its residential customers of available energy assistance provided by the utility. The
notice would have to include a description of the program, eligibility guidelines, application
information, and a statement that the utility's assistance program was offered instead of
collecting the funding factor. The utility also would have to include information regarding the
assistance program on its website.
Beginning annually on December 1, 2026, an electric utility, municipally owned utility, or
cooperate electric utility that opted out of collecting the funding factor would have to submit
a report that contained the following information:
-- The total amount of funds available for energy assistance for the utility's customers.
-- The total number of the utility's customers, by county, that applied for energy assistance
through the utility program.
-- The total number of the utility's customers, by county, that received assistance.
-- The total amount of assistance awarded to the utility's customers, by county, including a
description of the