Ellis Opposes Reverse Robin Hood on System Benefit Fund


(Austin, Texas) – Senator Rodney Ellis (D-Houston) today voted against legislation that would gut the System Benefit Fund and give away funds meant to help low-income and vulnerable Texans pay for rising energy bills.

The System Benefit Fund was created in 1999 when Texas deregulated electric utility companies to help low-income Texans pay for energy costs. The Fund’s goal has always been to assist the least fortunate Texans in braving the summer heat, and as temperatures across the state soar to increasingly high levels, that mission is more critical than ever.

Under the deregulation law, a $0.65 fee was added electric customers’ monthly bill to create a fund to help keep electricity affordable for those most in-need. According to the Public Utility Commission, about 500,000 Texans receive aid from the fund to help pay their summer bills.

“I oppose this reverse Robin Hood plan to take from the poor,” said Ellis. “The System Benefit Fund was created for the explicit purpose of helping low-income Texans pay rising energy bills after electric deregulation. That’s where the money should go and where Texans want it to go.”

Ellis offered two amendments to try to improve the bill. The first would have ensured that those who receives rebates are “low-income,” defined as someone whose household income is not more than 125 percent of the federal poverty level; or who receives food stamps or Medicaid. The second amendment would have benefited low-income Texans in a more indirect way – lower health care costs. The Ellis Amendment would have allocated $50.4 million out of the system benefit fund to the Health and Human Services Commission to provide the state’s share of the cost expanding Medicaid to the maximum extent allowed under the Affordable Care Act. This amendment would provide the funding needed to insure approximately 1.5 million Texans and draw down an estimated $4 billion in federal matching funds.

Since the creation of the System Benefit Fund, the legislature has often neglected to use the full balance to help Texans pay their summer electric bills, instead redirecting the balance to shore up budget shortfalls. For instance, in 2011 $650 million was left in the Fund instead of distributed to senior and needy Texans.

Despite rising energy costs, rising need, hotter summers and a growing fund, Texas has provided aid to fewer Texans. In fact, Texas is currently providing fewer discounts to needy Texans than it did in 2003. Meanwhile, in just June of 2011 – during one of the hottest summers on record – 123,440 Texans had their electricity disconnected.

“Texas summers are getting hotter and hotter, more and more money is being generated for this fund, yet the legislature is going to give less and less to Texans who can’t afford to keep the power on during the summer. That’s a travesty, it is dangerous for our seniors and children, and represents yet another broken promise in Austin.”

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