of lifeline rates was an intriguing policy idea, but it offered a rather narrow definition of and solution to the problem: that the problem was the structure of electric rates and that the solution lay in changing electric rate structures and providing a subsistence amount of electricity to the poor and/or all residential consumers at a discounted rate. Within this context, the major failing of the concept of lifeline rates was that it conflicted with the fundamental premise of electric rate reform. In making the case for electric rate reform (i.e., in arguing that electric rates should be based on actual costs of generation and service) the argument for a special subsidized rate was undermined.
Although lifeline rates as a policy idea failed, they did advance a line of argument or reasoning -- that of tying assistance to the poor to the immediate stimulus of increased costs. In this sense, the spirit of lifeline was retained and an important divide was crossed in regard to social welfare policy formulation and legitimation. There was the implicit recognition of the social costs of major societal developments or the adoption of specific public policies, such as energy conservation or energy independence, although there had been no explicit argument made for addressing social costs. During the hearings, there had been the routine assertions of the need to provide relief to the poor from rising energy costs, but that assertion or plea had not been set within any broader philosophical context.
The linking of the problem solution to its immediate origins in terms of assignment of increased energy costs was, in effect, temporary and somewhat less than definitive. Linkage of assistance for the poor to the Windfall Profits Tax was ephemeral. Although this was a kind of earmarking of taxes -- the setting aside of specific tax revenues for specific uses -- because it was a temporary tax measure destined for demise when domestic oil prices reached world market levels, this earmarking of tax revenues amounted to a grander symbolic gesture than to a major substantive policy change. In the end, energy assistance to the poor became a program funded like all social welfare programs, out of general revenues. What was of lasting significance was the establishment of another dedicated assistance program. The continuation of the home energy assistance program acknowledged and addressed a special area of need by the poor, that of relief from high energy costs.
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Publication information: Book title: The Making of Energy and Telecommunications Policy. Contributors: Georgia A. Persons - Author. Publisher: Praeger Publishers. Place of publication: Westport, CT. Publication year: 1995. Page number: 79.