LIHEAPnetworker
LIHEAP Clearinghouse
National Center for Appropriate Technology |
| Number 44 |
November 2002 |
LIHEAP
Funding on CR Basis;
States Await Final Budget Since FY 1997, LIHEAP funding has
been unavailable at the start of the fiscal year due to Congress's inability of Congress
to pass a federal budget. FY 2003 is no exception.
This year, as in prior years, LIHEAP directors must plan and, in most states, begin
operating their programs without knowing the final LIHEAP budget. Last year, they did not
have final numbers until January 10; for FY 2001, they didn’t know until December 21.
According to the National Energy Assistance Directors' Association (NEADA), it’s
likely that states won’t know the final FY 2003 LIHEAP appropriation until
mid-December.
Funding has been provided thus far under several continuing resolutions, the latest of
which funds government programs until November 24. LIHEAP has received over $800 million,
in order to provide first-quarter funding for the
states and full funding for tribes and territories, at a level of $1.4 billion. The
President has proposed a funding level of $1.4 billion for FY 2003; the Senate has
proposed $1.7 billion; the House has yet to set a budget amount. Both the President’s
and the Senate’s budgets include $300 million in emergency contingency funds.
Needless to say, the lack of budget numbers in time to start the program is a major
concern to LIHEAP directors. Many states interviewed by the LIHEAP Clearinghouse and NEADA
said they will have to cut benefits and the number of households served if they receive
less funds this year than last.
A chart detailing 23 states' program changes if the final
budget is $1.4 billion is listed on the NEADA website, as are each
state's funding amounts at the $1.4 and $1.7 billion levels.
In other budget news, the Administration’s proposed budget for the
Community Service Block Grant is $570 million, while the Senate appropriations committee
has proposed level funding of $650 million and the House has not acted.
The Administration has proposed $273 million for the Weatherization
Assistance Program, while the House and Senate appropriations committees have proposed
$250 million and $240 million respectively. State allocations tables for WAP can be found
on the National Community Action Foundation website.
Return to Contents |
Inside This Issue:
June 8 - 12, 2003: NLIEC, NFFN, NEADA
joint low-income energy conference, Sacramento, California |
State Practices
Outreach Strategies Among the States
The LIHEAP Clearinghouse is beginning a new section of the LIHEAP
Networker that will highlight innovative practices of special interest to LIHEAP
providers. This issue will feature outreach strategies conducted by LIHEAP directors in
the past year. For more information on LIHEAP outreach, visit the LIHEAP Clearinghouse website.
NEADA Energy and Outreach Program
A number of states have been able to tap into the NEADA (National
Energy Assistance Director’s Association) Energy and Outreach Program. The project is
sponsored by a consortium of state LIHEAP offices, with a goal of supporting the
development of high-quality outreach and educational materials to help low-income
households sign up for energy bill payment, weatherization, and education programs.
The program offers an annual energy savers calendar, outreach posters and a
children’s activity book, all of which can be customized to the specific state or
organization. In 2002, the calendar was produced for distribution in five states; for
2003, ten states have ordered copies, and production could run as high as 200,000 copies.
Maryland, Wisconsin, Virginia, Montana, and the District of Columbia have used the posters
on billboards, postcards, buses and subways to announce their programs, contact
information and the availability of funds.
For more information, visit the NEADA website.
Washington, D.C. Joint Utility Discount Day
Joint Utility Discount Day (JUDD), now in its 16th year, brings thousands of
low-income utility customers to the Convention Center in Washington, D.C, to apply for
LIHEAP and utility discounts. This year's event was held on October 17.
With one application, a person can sign up for LIHEAP, a natural gas discount from
Washington Gas, an electric discount from Pepco, a telephone discount from Verizon and, if
a homeowner, a discount from DC Water and Sewer. Once an applicant is determined eligible
for LIHEAP, he/she automatically receives the utility discounts.
Representatives from all four utility companies, the Office of the People's Counsel,
the D.C. Energy Office (the LIHEAP grantee), and the Public Service Commission are
available to answer questions and accept applications. Other District government agencies
and non-profit groups, including several that serve Spanish-speaking households, have
information booths to provide assistance to consumers.
Of the 10,000 who applied last year at JUDD, 6,000 were approved for LIHEAP; another
1,500 mail-in applications were distributed, thus reducing the number of persons who come
into the LIHEAP office to apply. According to Adrian Lanier, DC Energy Office (DCEO)
LIHEAP Program Manager, the number of attendees will likely increase this year due to the
poor economy and rising gas prices.
| D.C.'s Joint
Utility Discount Day attracted 10,000 applicants last year
for LIHEAP and utility discounts. |
Over 300 volunteers contribute their time to JUDD. The utilities provide the
volunteers, and the DCEO trains them. Public Service Announcements, radio ads, flyers, and
utility bill inserts all provide advertisement for JUDD. Utility companies also mail
applications to all previous LIHEAP clients.
D.C. is also conducting a special outreach project through its 2001 $1.1 million REACH
grant. Starting this September, six REACH employees are canvassing low-income
neighborhoods, going door-to-door in an effort to reach the under-served population –
eligible households not currently
participating in energy education and assistance programs. Armed with laptop computers,
the workers can input application information at a potential client's home. Because the
computer can access the LIHEAP system, eligibility can be determined on the spot.
According to Lanier, the goal is to identify 3,000 new LIHEAP clients. Homebound or
disabled individuals can call the DCEO to schedule a home visit.
Colorado
Colorado is entering the third year of an outreach campaign it began after it conducted an
outreach study and
marketing campaign. Although the state has less funding this year due to the major
utility pulling back its funds, Colorado believes the campaign has been very successful
and will continue to support it through LIHEAP and other utility funds.
The campaign includes radio and TV ads in English and Spanish, with special outreach on
Hispanic channels, plus messages on billboards and bus benches, and in utility bill
stuffers. Radio ads have been found to be especially effective in the remote mountain
areas.
For the second year, Colorado will contract with
"e-callogy," a company that has a separate toll-free number. The company takes
calls and provides the list of names it receives to the state, which then mails out
applications. It also calls everyone who received a mailed application and reminds them to
apply. It also refers callers to the WAP, and to the statewide fuel fund if their income
is too high for LIHEAP, they’ve already received LIHEAP, or are otherwise ineligible.
Oregon
A partnership of the Oregon AARP, the Oregon Food Bank Network and the Oregon Community
Action Association conducted an advertising campaign to reach AARP members and elderly
households considered likely to be eligible for food stamps and LIHEAP.
| A partnership of
three organizations in Oregon conducted a campaign to reach AARP members and elderly
households. |
During the fall of 2001, the agencies did a joint mailing to thousands of
households, and also publicized the LIHEAP and food stamp programs in the statewide AARP
newsletter. For AARP, it was a pilot program that’s part of the organization's
national Public Benefits Outreach strategy.
According to Debra Kennedy of the Oregon Community Action Agency,
the partners, aware that elderly persons are often reluctant to apply for assistance,
stressed that the benefits are not charity, but, rather, benefits that elderly persons
deserved and had paid for.
The campaign was successful, said Linda Marquam of the state LIHEAP office.
Unfortunately, she is worried that with a combination of reduced LIHEAP funds and
Oregon’s continuing economic downturn, it may backfire because LIHEAP will be unable
to serve all of the newly-recruited households.
Montana
Montana worked with NEADA and a local advertising firm to
produce billboards this year and last year. This year 70 billboards are going up statewide
in November. Last year, the Governor did a public service announcement for both TV and
radio; this year, stations will be asked to run it between November and April. The PSA
gives the toll-free number for the Citizens Advocate; when people call the number, they
are given a local number for the nearest LIHEAP intake agency.
Return to Contents
States Implement Web-Based
Services
For LIHEAP Applicants
In the past few years, as Internet and email usage have become increasingly common,
states have provided downloadable LIHEAP applications on their program web sites. Two
states, New York and Wyoming, have gone a step farther this year by allowing applicants
to fill out and submit their applications on-line.
New York
The state has begun its online application process as a pilot in 17 counties. According to
LIHEAP director Bruce Bowdy, the state doesn’t know how many low-income households
have the technology to utilize online applications, but believes the potential for
electronic communications will grow each year.
While anyone accessing the application in a pilot county can submit the application
online, some applicants will be required to submit documentation or come into a local
office for an interview, Bowdy said. In the non-pilot counties, applicants can download
and print the application and mail it or bring it to their county Department of Social
Services (DSS) office. New York plans on implementing another phase of the project later
this year providing greater electronic efficiency. The state's so-called alternate
certifiers, (non-DSS offices such as community action agencies and Area Offices on Aging)
will have a secure electronic link with the state computer and can access electronic case
folders for applicants already within the state system.
This will save them the time of conducting an extensive interview and doing a benefit
calculation because this information is already in the system. If the case is new and not
in the system, the agencies enter client data and send it on to the local county DSS. This
step was taken, Bowdy said, because nearly half of New York's LIHEAP applications come
through alternate certifiers.
Wyoming
With the goal of making state government become more responsive, convenient, accessible
and flexible, Wyoming’s Governor Jim Geringer has initiated "eGovernment"
in order to bring government services to the people of Wyoming using web-based
technologies. Applicants will be able to find state-supported services, without having to
know what internal state department provides the service by accessing the Pathways to People website.
| Wyoming's
Governor initiates "eGovernment' in an effort to bring services to the people. |
Wyoming’s Department of Family Services, the state LIHEAP and Weatherization
Assistance Program grantee, was the first to get on-line, according to Program Manager
Richard Hillegas. As of August 5, applications for participation in both programs can be
downloaded from the website and, by December, applicants will be able to fill out and
submit their applications on-line.
Several states offer downloadable applications for assistance, including: Alaska,
California, Louisiana, Montana, Ohio, Pennsylvania, South Dakota, Virginia, and Wisconsin.
Return to Contents
Wisconsin Evaluates Public
Benefits-Funded
Low-Income Energy Programs
In September, the Division of Energy in Wisconsin's Department of Administration (the
LIHEAP and WAP grantee) released its first-year evaluation of three state low-income
energy assistance and energy efficiency programs: the Wisconsin Home Energy Assistance
Program (WHEAP), the Weatherization Assistance Program (WAP), and the Targeted Home
Performance with Energy Star Program (Targeted HPWES).
It is the first independent evaluation of a state public benefits fund. Both WHEAP and
WAP receive a combination of state and federal funding: the state funding from the
low-income portion of a public
benefits fund approved in 2000, the federal portion from LIHEAP and WAP funds.
WHEAP and WAP serve households with incomes up to 150 percent of the federal poverty
level. Targeted HPWES is a new program that expands weatherization to low-income
households between 150 and 200 percent of poverty.
| Wisconsin
releases first independent evaluation of a state public benefits fund. |
Key findings of the Year One evaluation focus on WHEAP and WAP, since there was little
activity in the Targeted HPWES during the first year. Findings include:
- Program administration is running smoothly.
- Participants are highly satisfied with the programs.
- Program participants report both energy and non-energy benefits from the programs,
including improved control of household energy use and size of energy bills; a decrease in
utility bills; decrease in disconnections and/or the need for a bill payment plan; and a
decrease in heating system, water heater and appliance problems.
- Program participants report improvements in their quality of life, including sufficient
heating, fewer drafts, more consistent room temperatures, increased safety, and more money
for other necessities such as food and medicine.
- Program benefits and improvements are similar across different poverty levels.
- Program benefits are helping lead participants toward greater sustainability.
- The programs are serving those most vulnerable, but areas of improvement were
identified, including the need to serve more renters.
- The type and amount of energy education provided varies widely by local agencies.
- Coordination between WHEAP and WAP agencies needs improvement to increase efficiency,
better target the most vulnerable households, and increase agencies' understanding of each
other's objectives.
- Public benefits are viewed positively by those who know and understand them.
The evaluation recommends that WHEAP and WAP put more effort into working together to
maximize the programs' benefits to low-income households and society. It also points out a
need to improve the programs' targeting of and service to the most vulnerable and
high-energy burden households. Other suggestions include exploring methods to increase the
effectiveness of energy education, along with different methods for WHEAP direct payment
and expansion of service benefits. Also noted is a need for more staff to administer the
programs.
The program evaluation is the first in a three-year process. The Year Two evaluation
will include refrigerator metering and on-site visits, while Year Three will analyze
billing for the weatherization program and client arrearages.
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PA PUC Universal Service Report
Shows Increased Enrollment, Funding
The Pennsylvania Public Utility Commission (PUC) has released its "2001 Utility Consumer Activities Report." The report is an
annual evaluation on the customer service performance of the state’s major
jurisdictional electric, gas, water and telephone companies.
Part of the evaluation reviews the universal service assistance programs that help
low-income customers maintain their utility service.
The report provides funding and enrollment levels by utility on low-income rate
assistance programs known as Customer Assistance Programs (CAPs); the conservation program
known as the Low Income Usage Reduction Program (LIURP), utility hardship programs and
fuel funds, as well as water and telephone assistance programs.
"The number of customers who will be served by universal service programs has
dramatically increased because of restructuring," the report said. "Prior to
restructuring, the major EDCs and NGDCs had enrolled approximately 55,000 households in
their CAPs. As a direct result of restructuring, utilities will expand their CAPs to serve
at least 245,000 households. The major EDCs will double their annual LIURP spending from
$10 million to $20 million."
Also regarding LIURP, the report said: "LIURP was successful in achieving its
goals by producing benefits in the areas of demand side management, bill reduction,
arrearage reduction and avoided collection costs. The list of LIURP benefits includes many
other benefits for both utilities and their customers. Noteworthy among the program
benefits is arrearage reduction."
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REACH Funds Cool Roofs
Initiative In Philadelphia, PA
Philadelphia is used to blistering hot summers, made all the more intolerable by the
traditional black asphalt roofing on the city's brick row homes. Heat-related deaths have
become more common in Philadelphia and other cities during the last decade, which is the
hottest on record.
"Excess morbidity" from extreme heat waves hits especially hard among seniors
in low-income neighborhoods. A REACH-funded program in Philadelphia has placed white
acrylic, elastomeric roof coating on 400 homes in the inner city. Its sponsor, Philadelphia's Energy Coordinating Agency (ECA),
hopes to produce hard data showing the measure's effectiveness in reducing indoor air
temperature and cooling costs, and in providing a safer and healthier indoor environment.
| LIHEAP
REACH project,"Cool Homes," aims to prevent heat-related suffering and lower
energy bills. |
ECA started the Cool Roofs initiative in 1999 with 100 homes completed with foundation
funding. It then incorporated cool roofs into its LIHEAP REACH project titled "Cool
Homes," which aims to prevent heat-related suffering and death of low-income, at-risk
older adults, and to lower their energy bills by providing cooling treatments that
maximize ventilation and passive cooling during the summer months.
According to Executive Director Liz Robinson, ECA has nearly completed 400 homes under
the REACH project. She said data loggers have been installed in 120 homes as part of an
independent third party evaluation (required under REACH) to be completed later this year.
If the results are positive, ECA hopes the measure will be approved as an integral part of
Pennsylvania's Weatherization Assistance Program (WAP). Because ECA is a WAP sub-grantee,
it has been able to piggyback REACH and WAP funds and treat homes with a comprehensive
package that includes heating and cooling measures.
"Hopefully, our data will allow, and possibly encourage, states to consider
affordable cooling measures which can prevent unnecessary loss of life." she said.
Robinson believes "Cool Homes is not just about energy savings, it's also a life
saving program." This is especially true in northern cities such as Philadelphia,
where most low-income residences don't have central air conditioning, and many don't even
have room air conditioning, and, thus, have minimal cooling costs.
The cost of white roofing depends on the condition of the roof - generally about
$1,200. The acrylic, elastomeric coating is a viscous substance which applies like paint,
and is water-based and non-toxic. In most cases it can be applied over the existing rolled
asphalt roof. It cannot be applied over shingles or tiles. Because it reflects the sun's
heat, the coating extends the life of the roof and needs only to be reapplied every ten
years.
A related ECA project, Robinson said, was "Cool Block," in which ECA
white-roofed an entire block at a time. Outdoor data logging showed a reduction in the
outdoor temperature, in other words, it "reduced the urban heat island effect,"
she said.
The Energy Coordinating Agency is a private, non-profit corporation dedicated to
ensuring that low and moderate income people have access to safe, affordable and reliable
sources of energy and water.
For more information, contact Robinson at: lizr@ecasavesenergy.org; or (215)
988-0929 ext 233.
Return to Contents
FY 2002 REACH Grants Awarded
Residential Energy Assistance Challenge (REACH) Option Program FY 2002 grants of over
$6.6 million were awarded on September 30. Six states received almost $5.5 million and
seven tribes and 1 territory were awarded over $1.1 million for REACH projects.
| Over $6.6 million
in REACH grants were awarded to six states and seven tribes. |
Up to 25 percent of the funds set aside for the LIHEAP leveraging incentive program may
be earmarked for the REACH program each year. In FY 2002, $27.5 million was set aside for
leveraging incentive grant awards, making $6,875,000 available for REACH grants.
Projects in Georgia, Rhode Island and Virginia were awarded REACH grants for the first
time. Georgia and Rhode Island each received $1.1 million, and Virginia was awarded $1
million. Maine and Kentucky are third-time REACH grant recipients; Massachusetts has won
one award previously. State projects are awarded for a three-year period.
The Confederated Salish and Kootenai Tribes of Montana, the Little River Band of Ottawa
Indians of Michigan, and the Klamath Tribes of Oregon are also first-time REACH grantees.
The first two each received a $150,000 award and the Klamath Tribes were awarded $144,990.
This is the fourth consecutive year that the Central Council Tlingit and Haida of Alaska
has received an award. Project periods extend up to 17 months for tribes and insular
areas.
State, tribal and territory REACH awards are listed below.
| States |
Award |
| Georgia |
$1,100,000 |
| Kentucky |
$370,181 |
| Maine |
$900,000 |
| Massachusetts |
$1,000,000 |
| Rhode Island |
$1,100,000 |
| Virginia |
$1,000,000 |
| Total |
$5,470,181 |
Tribes and Territories |
Award |
| American Samoa |
$150,000 |
| Blackfeet Nation (Montana) |
$150,000 |
| Central Council Tlingit and Haida (Alaska) |
$175,000 |
| Confederated Salish and Kootenai Tribes
(Montana) |
$150,000 |
| Little River Band of Ottawa Indians
(Michigan) |
$150,000 |
| South Puget Intertribal Planning Agency
(Washington) |
$150,000 |
| The Klamath Tribes (Oregon) |
$144,990 |
| United Tribes of Kansas and SE Nebraska,
Inc. (Kansas) |
$70,000 |
| Total |
$1,139,990 |
For more information, visit the LIHEAP Clearinghouse website for state
and tribal REACH history and project
summaries.
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Low Income in Missouri Get $13
Million for
Rate Assistance and Energy Efficiency
The Missouri Public Service Commission approved an electric rate case settlement July
25 for AmerenUE customers. Under the agreement, approximately $13 million from AmerenUE's
shareholders will fund low-income customer programs over a four-year period.
| AmerenUE
shareholders supplement Dollar More program and low-income weatherization with
contributions of $13 million. |
Shareholders will make an initial contribution of $5 million to the Dollar More program
in 2002. An additional $1 million will be contributed to this program on June 30th of each
year through June 2006, for a total contribution of $9 million. Dollar More, administered
by the United Way, is a fuel fund that provides temporary financial assistance to
households with special needs to keep utility services operating during extreme
temperatures.
Also approved under the agreement is a significant improvement in funding for
low-income weatherization programs. An initial contribution of $2 million from AmerenUE
shareholders will be supplemented with $500,000 a year for the next four years to bring
the total to $4 million. Local community groups administer the weatherization programs.
The settlement also calls for an electric rate reduction, among the largest in state
history, that will benefit all residential consumers. Over the next three years, electric
rates for AmerenUE's 1.1 million electric customers will drop by increasing amounts,
reaching approximately $110 million on an annual basis. In addition, $40 million in
one-time bill credits of $15.40 appeared on customer bills in August and September.
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Two States Face Potential
Loss of
Universal Service Benefit Funds
Most states that have restructured their energy industries have also adopted a
systems benefits charge (SBC) (also known as public benefits or universal service charges)
– a charge on a consumer's bill from an electric distribution company to pay
for the costs of certain public benefits programs such as low-income assistance and energy
efficiency. In two states, these benefits may be in jeopardy due to legal or legislative
threats to repeal the SBC.
Georgia
Georgia's new regulated natural gas provider program – designed to
bring rate relief to low-income households buffeted by four years of high and fluctuating
prices under gas deregulation – may be in jeopardy because of a
lawsuit brought by several large industries in the state.
| Large industrial
gas users oppose surcharge to fund regulated gas provider that serves low- income and
payment-troubled customers. |
The 2002 Georgia General Assembly passed the Natural
Gas Consumers Relief Act, requiring the state Public Service Commission (PSC) to
select a natural gas provider to serve two groups of consumers: low-income customers and
customers who can't get service from a marketer because of payment problems. In June, the
PSC selected Scana as the regulated natural gas provider. The company began accepting
customers August 15 and began selling gas to the two customer groups on September 1.
Scana offers the lowest gas price for low-income consumers and a
special discount for low-income senior citizens. Households with incomes at 150 percent or
less of the federal poverty level qualify for the company's low-income rates, which will
be 10 to 14 cents less per therm than other variable residential rates, plus a $4.95
monthly service charge. (In Georgia's deregulated natural gas market, all residential
consumers pay rates that vary with changes in the wholesale prices). Low-income seniors
will receive an additional discount of two cents per therm.
Consumers with a risky credit history will pay considerably higher
rates: 71 cents per therm, based on current wholesale prices, plus a monthly customer
service charge of $11.95.
Scana receives $77 per year per low-income customer to cover any unpaid arrearages.
Money for this arrearage guarantee and per-customer fee comes from the Universal Service
Fund (USF), as does $275,000 for the company's customer education programs.
The Universal Service Fund was established by the original deregulation law and funded
through surcharges on large industrial users and certain kinds of profits from Atlanta Gas
Light (AGL), the deregulated natural gas company.
In September, a group of large industrial gas users asked the Fulton County Superior
Court to declare the PSC's designation of Scana "null and void." The Georgia
Natural Gas Group and Georgia Textile Manufacturers Association are opposed to the
surcharge they pay, as part of their gas bills, to fund the regulated gas provider
program. The lawsuit describes the PSC-ordered programs as a "gross abuse of
discretion and an arbitrary, capricious and unreasonable exercise of its authority."
A hearing on the case will take place this fall.
Nevada
During the upcoming 2003 legislative session, the Nevada Legislature will get an
opportunity to reconsider the Universal Energy Charge (UEC), a small but controversial
surcharge on electricity consumption of all customers, except those that were exempted.
The UEC funds are used to provide energy assistance and conservation to low-income
households.
| Legislators get
opportunity to reconsider the Universal Energy Charge in upcoming session. |
Currently, three measures are being drafted by the Legislative Counsel Bureau of the
State of Nevada that, if passed, could either alter or eliminate the UEC. These draft bill
requests are as follows: 1) #58-38, which would amend the existing bill by doing away with
the exemption granted to industries that use electrolytic or electro-chemical processes;
2) #58-40, which seeks to eliminate the UEC altogether; and 3) #344, presented by the
Nevada League of Cities and Municipalities, asks to exempt certain municipalities.
While the tax is not large – Nevada Power has calculated a customer using 1,200
kilowatt-hours of electricity (about average) pays about 47 cents a month – it has
resulted in complaints from some customers who, as one customer put it, don’t like
paying "involuntary charitable contributions."
Three quarters of the UEC funds are administered by the Nevada’s State Welfare
Division, the state LIHEAP grantee, which has increased by 73 percent the number of
low-income households served since the UEC funds became accessible about a year ago. Linda
Mercer, LIHEA Program Manager, said the number of households served in 2001 was 9,025; in
2002, 15,665 households.
Bob Cooper of Nevada’s Bureau of Consumer Protection said, "… the
low-income programs have strong support in the Assembly; it will probably be able to block
any attempt to overthrow the Universal Energy Charge."
Another issue that may impact the UEC is the potential take-over of Nevada Power, an
investor-owned utility, by Southern Nevada Water Authority, a public power company. The
water authority has offered to purchase Nevada Power from its holding company, Sierra
Pacific Resources, for $3.2 billion including debt. Nevada Power serves Clark County,
where over 70 percent of the state’s electric customers reside. Public power
companies are exempt from charging the surcharge under the current legislation so
something would need to be changed in order for the UEC to continue being collected in
that service territory.
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Low-IncomeEnergy
Resources
NCAT Study Documents Adverse Impacts of Restructuring on Residential Consumers
A five-state study by the National Center for Appropriate Technology (NCAT) on how
residential consumers have been affected by electric and natural gas market restructuring,
documents the adverse impacts of passing through short-term wholesale energy rates to
these consumers.
The study reviews Georgia’s restructuring of its natural gas market, as well as
the restructuring of electricity markets in Massachusetts, Texas, Ohio and part of New
York.
"In those states that have relied on the pass through of short-term market-based
prices for default service, residential customers appear to be worse off compared to
pre-restructuring rate policies and are certainly worse off compared to customers in those
states that have adopted rate caps and rate freezes that insulated customers from price
volatility," said consumer expert Barbara R. Alexander, one of the study authors.
At a minimum, the consumer experiences documented by the project suggest that
legislators and regulators should develop policies that rely more on long-term stable
rates and avoid short-term price volatility, she added.
The NCAT study also found that, with few exceptions, restructuring laws have not
resulted in the lower prices or increased choices that many policymakers had anticipated.
The exceptions noted in the study occurred in selected regions in two states (Ohio and
Massachusetts) that have utilized a strategy called opt-out aggregation, a low-cost way to
pool the buying power of a large number of customers. The study found that this strategy
has yielded significant electric bill savings for consumers and has given them access to
competitively-determined electricity prices and green power.
Other study highlights include:
- The five states studied are still in a transition period to fully competitive
residential markets, and this transition period will last longer than expected due to a
variety of reasons explained in the full study report.
- As states move to the end of the transition period, it is clear that the method of
pricing and delivery of Default Service (service for customers who do not have a
competitive supplier) will be crucial to residential customers. Competitive market abuses,
particularly door-to-door marketing, point to the need for additional regulatory
oversight.
- With the exception of Georgia at the onset of its market opening, the states have
adopted comprehensive consumer protection programs and policies. Texas and Ohio, in
particular, are models for well-designed consumer education and protection programs.
The study, titled "The Transition to Retail Competition in Energy Markets: How
Have Residential Consumers Fared?" is available at www.ncat.org/neaap/experts
Other Resources
"Heat Or Eat? Cold Weather Shocks and
Nutrition in Poor American Families," June 2002, National Bureau Of Economic
Research. Examines effects of cold weather periods on family budgets and on nutritional
outcomes in poor American families. Finds that poor families reduce food expenditures in
proportion to increases in fuel expenditures; they also reduce caloric intake during
winter months. Concludes that poor families outside the South spend less and eat less food
during cold weather temperature shocks and that existing social programs fail to buffer
against these shocks.
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