(a) On or before June 30, 2012, the Department of Energy and Environmental Protection shall conduct a proceeding regarding development of low-income discounted rates for service provided by electric distribution and gas companies, as defined in § 16-1, to low-income customers with an annual income that does not exceed sixty per cent of median income. Such proceeding shall include, but not be limited to, a review, for individuals who receive means-tested assistance administered by the state or federal governments, of the current and future availability of rate discounts through the department’s electricity purchasing pool operated pursuant to § 16a-14e, energy assistance benefits available through any plan adopted pursuant to § 16a-41a, state funded or administered programs, conservation assistance available pursuant to § 16-245m, assistance funded or administered by said department or the Department of Social Services, or matching payment program benefits available pursuant to subsection (b) of § 16-262c. The department shall (1) coordinate resources and programs, to the extent practicable; (2) develop rates that take into account the indigency of persons of poverty status and allow such persons’ households to meet the costs of essential energy needs; (3) require the households to have a home energy audit paid from the Energy Efficiency Fund as a prerequisite to qualification; (4) prepare an analysis of the benefits and anticipated costs of such low-income discounted rates; and (5) review utility rate discount policies or programs in other states.

(b) The department shall determine which, if any, of its programs shall be modified, terminated or have their funding reduced because such program beneficiaries would benefit more by the establishment of a low-income or discount rate. The department shall establish a rate reduction that is equal to the anticipated funds transferred from the programs modified, terminated or reduced by the department pursuant to this section and the reduced cost of providing service to those eligible for such discounted or low-income rates, any available energy assistance and other sources of coverage for such rates, including, but not limited to, generation available through the electricity purchasing pool operated by the department. The department may issue recommendations regarding programs administered by the Department of Social Services.

(c) The department shall order (1) filing by each electric distribution company of proposed rates consistent with the department’s decision pursuant to subsection (a) of this section not later than sixty days after its issuance; and (2) appropriate modification of existing low-income programs.

(d) The cost of low-income and discounted rates and related outreach activities pursuant to this section shall be paid (1) through the normal rate-making procedures of the department, (2) on a semiannual basis through the systems benefits charge for an electric distribution company, and (3) solely from the funds of the programs modified, terminated or reduced by the department pursuant to this section and the reduced cost of providing service to those eligible for such discounted or low-income rates, any available energy assistance and other sources of coverage for such rates, including, but not limited to, generation available through the electricity purchasing pool operated by the department.

(e) On or before February 1, 2012, the department shall report, in accordance with § 11-4a, to the joint standing committee of the General Assembly having cognizance of matters relating to energy regarding the benefits and costs of the low-income or discounted rates established pursuant to subsection (a) of this section, including, but not limited to, possible impacts on existing customers who qualify for state assistance, and any recommended modifications. If the low-income rate is not less than ninety per cent of the standard service rate, the department shall include in its report steps to achieve that goal.