The Los Angeles Senior Citizen Lifeline Electricity Rate

by Timothy J. Sullivan

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Los Angeles' experience in providing low-cost electricity for its low-income elderly. Introduced in 1975, the program covers over 89,000 households — 80 percent of the estimated eligibles — where the head is at least 62 and annual taxable income is under $7500. It offers a 50 percent discount on the first 360 kwh of bimonthly consumption, which at current prices means an average $10 discount per household every two months. The special rate has stimulated approximately 429,000 kwh of additional electricity use bimonthly among the eligible population. But because rates were raised by 1.8 percent for other residential users to pay for the subsidy, their use fell 2,700,000 kwh/two months, a net reduction in total residential use. Analysis of lifeline consumption patterns shows (1) many lifeline households consume very little electricity; (2) small quantity consumers do not necessarily have low incomes; and (3) low income consumers do not necessarily use small quantities of electricity.

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