LIHEAPnetworker
LIHEAP Clearinghouse
National Center for Appropriate Technology

Number 45

February 2003

States Cope With Budget Uncertainties,
Energy Cost Hikes, Economic Downturn

The current winter bears much resemblance to 2000-01, when higher energy costs and colder weather hit most of the country. Unlike two years ago, however, the economic downturn had not begun to hit states, nor had accompanying state budget reductions and high unemployment. That year, several states were able to supplement LIHEAP with special state allocations, in some cases quite substantial; so far this winter, no state has done so.

According to the latest (January) Department of Energy projections, natural gas users will see a 34 percent increase in their bills during the October-through-March season; heating oil bills will rise 43 percent and propane 20 percent. According to latest government figures, unemployment is at 6 percent nationally.

Based on budget indications they had as the fiscal year began ($1.4 billion), state officials reported that they would have cut more than 500,000 families from the program and about half the states planned to reduce benefit levels, according to the National Energy Assistance Directors' Association. As their programs got underway, some states such as New York, Minnesota, Kentucky and Ohio, reported that applications were on the increase due to colder weather and the economic downturn. Charitable organizations such as the Salvation Army also reported hikes in the number of households requesting energy assistance.

LIHEAP Funding Not Final;
States Get 2nd Quarter Funds

As of press time, LIHEAP FY 2003 funding has not been finalized. However, the sequence of recent actions by Congress and the administration indicate a level of at least $1.7 billion.

On January 7, HHS released second quarter allotments totaling $545 million and bringing the total released this year to $1.38 billion in regular funds. The House acted on January 10, approving $1.7 billion, the same level approved by the Senate Appropriations Committee in August. On January 21, the Senate approved an amendment to H.J. Res. 2, an omnibus spending bill, increasing funding for LIHEAP to almost $2 billion by adding $3 million from previously unreleased LIHEAP emergency funds. Several days later, the administration directed HHS to release $200 million of the previously unreleased LIHEAP emergency funds to all of the states.

The next step will be worked out by House-Senate conferees and will be influenced by the bad weather in most parts of the country and higher energy prices.

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Inside This Issue:

Mississippi's Case Management
Leads To Client Success Stories
 
Maine REACH Reduces Electric Use In Low-Income Households
State REACH Grants Focus on
Energy Conservation / Education
Tribal and American Samoa
REACH Grants
Kentucky CAA Purchases Lower Cost Gas for Low-Income Clients
NY Natural Gas Aggregation Slowed by Welfare Reform
Michigan PSC Awards $25 Million for Energy Assistance/ Efficiency
Georgia PSC Settles USF Suit;
Adds More Money to Fund
Texas Utility Rule Amended To Protect Low-Income Consumers
New York Consumer Energy
Protection Act Now Law
NLIEC, NFFN, NEADA Meet
June 8-12 in Sacramento
Low-Income Energy Resources

calendar

February 19-20: Winter meeting, National Energy Assistance Directors' Association, Washington, D.C.

June 8-9: National Fuel Funds Network, 19th Annual Conference, Hyatt Regency, Sacramento, California.

June 8-9: National Energy Assistance Directors’Association Annual Meeting, Hyatt Regency, Sacramento, California.

June 9-12: National Low Income Energy Consortium, 17th Annual Conference, Hyatt Regency, Sacramento, California. Contact: conference@nliec.org.

Mississippi's Case Management
Leads  To Client Success Stories  

Mississippi operates a non-traditional LIHEAP program that uses intensive case management to determine the needs of a client/family and its level of assistance – a holistic approach to move a client toward self-sufficiency.

The case management approach to service delivery prepares clients to focus on obtaining an education or employment, for example, in order to become more self-sufficient.

When a client comes into a Community Action Agency, the needs of his/her entire household are assessed; everyone in the household is put into case management. The caseworker sits down with the client to make a plan for the entire family that might include help with rent, housing, weatherization, healthcare, employment, education, transportation, childcare, as well as meeting utility payments.

To facilitate the case management process, Mississippi has a statewide ROMA (Results Oriented Management Accountability) Client Tracking Computer System. When a client meets with a caseworker, intake data is entered into the computer, eligibility is determined, and all services that person is receiving and eligible for are tracked through the database. The database also records the hours that caseworkers spend coordinating services through different programs, and each program is charged accordingly.

Ronza Anderson, Programs Manager, explained that a plan includes not only the assistance provided, but also the client’s agreement to work toward a goal or goals. The program provides whatever assistance is needed to achieve the goal. For example, if a client is working toward a GED, he/she may need transportation, money for books, or assistance with bills. The agreement might stipulate that the client’s utility bills be paid for a year and that the money saved go toward education expenses.

Mississippi's holistic approach to case management includes a client's agreement to work toward a goal.

After setting goals, the client signs a contract with the case manager, who visits the client once or twice a month to determine if the client has fulfilled his/her end of the contract. If clients are not working toward their goals, the case manager withholds assistance until the clients are able to show that they are meeting their part of the contract.

At first, some clients were reluctant to sign a contract, knowing that effort on their part was required, but now they realize they must participate if they want assistance. The length of a contract can range from 90 days to one year.

The holistic approach to case management has produced many success stories. According to Anderson, several clients have graduated from college during the past year. A single parent with five children was having trouble paying utility bills. She and her caseworker determined that her main problem was unemployment, and her case plan focused on education. Through budget planning, LIHEAP agreed to pay her utility bills in order to free up funds for tuition at a community college. She is now a certified practical nurse and has moved from crisis to stable, self-sufficient status although her case will remain in the computer for follow up.

Seniors, who often live on a fixed income or have high medical costs, are not required to sign a case management contract. Instead, they enter into an income management plan, and a budget is developed to show them where they might cut costs.

While Mississippi has utilized the case management approach since 1991, it was intensified as a result of the Government Performance and Results Act (GPRA) of 1993, which requires federally-funded programs to demonstrate measurable outcomes.

Along with facilitating the case management process, the implementation of ROMA has improved the quality and quantity of relationships between LIHEAP and energy vendors across the state. Vendors have access to a special section of the Client Tracking Computer System, where they can see if LIHEAP funds have been obligated for a client. This information benefits both clients and vendors by avoiding disconnects and reconnection fees.

A description of the case management approach is found in Mississippi’s state LIHEAP plan, available on the LIHEAP Clearinghouse website; Mississippi's 2001 ROMA Report can be viewed on the MS ROMA website.

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Maine REACH Reduces Electric
Use In Low-Income Households

The Maine REACH program used education, energy audits, appliance and heating system replacement, and program flexibility to reduce electrical demand by an average of 15 percent in participating low-income households.

In some households, where electric heating systems were converted to fuel oil or kerosene, electrical demand was reduced by up to 51 percent. The program emphasized electricity consumption because it is the most costly energy source in Maine and, therefore, a natural target for measures to reduce low-income energy costs.

The three-year REACH program, funded by a $1.5 million grant, was designed to reach LIHEAP recipients with annual electrical usage over 10,000 kilowatt hours (kWh). It was implemented statewide from 1999 through 2001 in a four-tiered project conducted by the Maine State Housing Authority (MSHA), the LIHEAP grantee, and the state’s 11 community action agencies.

Tier One provided energy efficiency education to the state’s 44,000-plus LIHEAP recipients. Renters received a packet of informational brochures. With homeowners, application staff at the CAAs spent an average of 13 minutes doing one-on-one energy education when the recipients came in to apply for LIHEAP.

Education consisted of tips to save energy and money, such as turning down thermostats and hot water heaters, adjusting refrigerator and freezer controls, fixing leaky faucets, sealing electric wall outlets and switch plates, taking showers instead of baths, rinsing clothes in cold water, and turning off lights and televisions when not in use. In a follow-up survey of people who participated in the energy education interview, 70 percent said that they took direct action as a result of the information they received.

Tier Two audited the homes of 841 LIHEAP recipients with high electrical use. The audits combined the weatherization measures of traditional audits with techniques designed to calculate electrical consumption. Besides providing weatherization measures and energy efficiency education, the audits identified how much electricity hot water heaters and large appliances used.

The energy audits found that replacement of hot water heaters would reduce household electrical use more effectively than refrigerator replacement. A a result, the state’s REACH coordinators modified the program, which had focused on refrigerator replacement, to include replacing electric hot water heaters with oil- or propane-fired hot water heaters. When the project was completed, 237 refrigerators and 116 hot-water heaters had been replaced.

Energy burdens of Tier 3 and Tier 4 participants were reduced on average by 58% .

Tier Four, the most ambitious aspect of the program, converted heating systems for high-electric-use households from electricity to heating oil or kerosene. The project’s original goal was between 172 and 215 conversions. For a number of reasons, that number had to be adjusted to 111 as the project proceeded. A considerable number of the households originally selected were renters, explained Jo-Ann Choate, Maine’s LIHEAP director, and many of the landlords were not interested in participating. In addition, individual conversions, projected at about $4,400, cost closer to $6,000. Some potential participants were receiving state electric-bill assistance through their utilities and were reluctant to give that up. In the end, 83 households were converted from electric heat to alternative heating systems.

As specified in the program design, Maine electric utilities provided monthly consumption data for the REACH client households so that it would be possible to track energy savings. According to an independent evaluation of the program, energy audits alone produced a 3.3 percent reduction in electric use; refrigerator replacement alone produced a 9.5 percent reduction; hot water heater replacement alone reduced electric consumption by 30.5 percent; replacement of both refrigerators and hot water heaters reduced electric use by 36.4 percent. When heating systems were converted to oil or kerosene, electric savings were 51 percent, and households that had heating conversions along with replacement of both water heaters and refrigerators reduced electric usage by 66.6 percent.

The evaluation noted that Maine’s program was very ambitious, combining two energy-service delivery programs – LIHEAP and the Weatherization Assistance Program – with different objectives and separate funding sources. It labeled the REACH program generally successful, with an average reduction in energy burdens of 58 percent for Tier 3 and 4 participants.

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State REACH Grants Focus on
Energy Conservation / Education

Six states - Maine, Massachusetts, Kentucky, Virginia, Rhode Island and Georgia - that received REACH grant awards in September 2002, are pursuing varied activities to reduce energy burden and increase client energy self-sufficiency.

Five state projects have an energy conservation education component with a focus on reducing energy burden. Maine, Kentucky, Virginia and Georgia will follow up these activities with weatherization measures. In Maine, after a home energy audit, the REACH project will supply a weatherization kit and and replace electric hot water tanks with special-design heat pump water heaters in mobile homes.

Six states received REACH grants totaling $5,470,181  in FY 2002

Some states are working with utilities to reduce arrearages for program participants. Massachusetts's REACH program will work with local utilities to provide arrearage forgiveness to clients who enter into comprehensive literacy training. Project goals for Georgia include mediation with energy providers to reduce arrearages and establish payment plans in order to foster more regular bill payments.

Massachusetts, Rhode Island and Georgia are taking a holistic approach to moving clients towards self-sufficiency. Massachusetts is adopting a "one-stop shopping" model of services that facilitates access to a broad range of housing and social service resources which can reduce debt, support savings and enable families to invest in long-term assets such as home ownership and education. In Rhode Island, collaborating programs will assign caseworkers to carry out a focused holistic family development model. Project services in Georgia include referrals to other appropriate services that may reduce expenditures and increase disposable income.

Georgia will carry out an in-depth evaluation of intervention results by comparing a group of 300 project participants and a control group of 300. Virginia's client education component will be integrated into the Virginia Weatherization Assistance Program (WAP). Pre- and post-weatherization energy consumption data will be collected to determine the effectiveness of WAP.

The state REACH grant summaries are available at the LIHEAP Clearinghouse website.

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Tribes and American Samoa Seek to Improve
Energy Efficiency Through REACH Grants

Seven tribes and American Samoa received REACH grant awards in September 2002.

Most tribal REACH projects focus on energy conservation measures and education. The United Tribes of Kansas and Southeast Nebraska will supply a full range of energy conservation services to project participants, including furnace repair and replacement, storm doors, insulation, water heater replacement and roof repair or replacement.

Seven tribes and 1 territory received REACH grants totaling $1,139,990 in FY 2002

Montana's Blackfeet Tribe is creating a Reclamation Center to provide households with affordable energy conservation improvements and housing repairs such as roofing and insulation. The Confederated Salish and Kootenai Tribes of Montana will research housing conditions on tribal lands and develop a support team to help residents tackle heating problems.

Energy conservation measures in American Samoa will concentrate on refrigerator replacement. A high percentage of low-income families have old, dilapidated refrigerators or use ice chests for refrigeration. The Territory plans to distribute 80 to 100 high efficiency refrigerators.

Budget counseling for the Klamath Tribes and South Puget Intertribal Planning Agency (SPIPA), both in Oregon, and hands-on workshops for the Little River Band of Ottawa Indians of Michigan will further assist REACH participants in attaining energy self-sufficiency.

Many tribes such as SPIPA and the Blackfeet are taking a holistic approach to increase awareness, utilization and coordination of programs. The Alaskan Central Council of Tlingit and Haida Indian Tribes has a one-stop shop for intake and assessment and proposes to strengthen linkages between other programs. The project will help build the capacity for making energy-related decisions at the village level and includes customer input and satisfaction. This model will be used as a baseline for the design and delivery of services.

Self-evaluation is an integral part of some tribal projects. SPIPA will establish and evaluate baseline energy consumption data and then conduct a post-project evaluation to determine the levels of impact and improvements resulting from intervention. Samoa plans to gather data on energy consumption of old and new refrigerators to evaluate a financial benefit.

Tribe and territory REACH grant summaries are available at the LIHEAP Clearinghouse website.

History of REACH Funding
Year

1996

1997

1998

1999

2000

2001

2002

Number of States

6

6

8

5

5

*5

6

Number of Tribes, Territories

4

3

4

7

7

9

8

State Funding

$5.1 m

$5.4 m

$5.2 m

$5.6 m

$5.5 m

$4.5 m

$5.5 m

Tribe/Territory Funding

$379,337

$361,513

$436,449

$804,789

$969,199

$1.3 m

$1.1 m

Year Total

$5.5 m

$6.0 m

$5.6 m

$6.4 m

$6.4 m

$5.8 m

$6.6 m

*Includes District of Columbia

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Kentucky CAA Successful in Purchasing
Lower Cost Gas for Low-Income Clients

A Kentucky community action agency has entered the volatile world of the free market and, so far, has been successful in competing against other free market players, a decidedly unfamiliar position for most CAAs.

The Community Action Council (CAC) for Lexington, Fayette, Bourbon, Harrison and Nicholas Counties created the Community Action Council Buyers Club, Inc., in December 2001 in order to become a gas supplier for its LIHEAP and other low-income clients. Its goal was to purchase and sell natural gas to its customers at prices at least 15 percent below those of any other supplier. So far, it has consistently offered the lowest price, about 13 percent below its competition.

The Community Action Council Buyers Club has consistently offered the lowest price in natural gas.

"We’re beginning to feel comfortable that we’re learning the market. I’m delighted that we did this, but it’s a big change for most of us," said CAC executive director Jack Burch "We’re doing something that has a tangible benefit for the low-income community that is completely removed from our normal nonprofit world of grant writing and fundraising."

As a supplier for Columbia Gas Choice Program, approved by the Kentucky Public Service Commission (PSC) in 2000, the club offers its members variable month-to-month pricing, as opposed to long-term contracts. January prices were $4.99 per mcf (thousand cubic feet). Burch believes the club can hold that price through the winter because it purchased a large quantity of gas in September when prices were low. However, price stability depends on the weather, the number of club members (it’s still growing), and the volume of gas sold, he added. Two other suppliers are advertised on the Columbia Gas Choice website, and one offers either variable pricing or a two-year contract at $6.99 per mcf.; the other’s prices are not posted.

While the CAC Buyers Club markets only to low-income clients, it has business and non low-income members as well because it is required by the PSC to accept all customers. The CAC enrolls households during LIHEAP intake, as well as during intake for WinterCare, an emergency fuel fund that the CAC also administers. Included among the low-income members are about 500 participants in Columbia Gas’s percentage-of-income payment plan. The Kentucky PSC mandates that these households be automatically enrolled in the lowest cost plan, which, to date, has been the buyers club.

As of January, the club had 3,000 members, most of whom are LIHEAP households; however, its membership also includes fast food restaurants. Columbia Gas remains the default supplier, and continues to deliver the gas and to do billing and collections.

Burch said the club’s board has considered offering long-term contracts versus month-to-month pricing, but has opted to go with the latter because it does not feel it has the experience and "comfort level" to enter the long-term market.

The CAC’s first entry into the gas supply market was not so successful. A pilot aggregation program two years ago was "an absolute failure," Burch said, in part because the CAA contracted with a marketer that defaulted and failed to deliver during the winter of 2000-01, a time of record cold and escalating prices. The 2,500 or so customers the CAA had aggregated were shifted back to Columbia Gas, the default supplier, and ended up paying the winter’s highest prices.

After that, the CAC did its homework. It conducted a feasibility study, acquired advice from national experts, hired an independent broker to handle the buying transactions, developed an economic model and a business plan, and created the buyers club as a legally separate nonprofit entity, in order to reduce financial risk to the CAC and its programs.

Additionally, start up and operating funds (over $1 million) were attained through a line of credit from the CAC’s bank, and an irrevocable letter of credit to Columbia Gas. The CAC owns the buyers club and sells it CAC staff time. Its board of directors is comprised of the executive committee of the CAC, two consumers not otherwise affiliated with the CAC, a technical expert and a financial expert.

An additional benefit from the market experience has been the respect the CAA has garnered in the business community from groups who are not traditional allies, Burch noted.

Burch believes CAAs in deregulated market areas should consider creating buyers clubs, and he’s willing to share his group’s business plan and contract documents with other CAAs or low-income groups.

For more information, contact Burch at 859-244-2212 or jburch@commaction.org.

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New York Natural Gas Aggregation
Slowed by Welfare Reform

A New York natural gas aggregation program has lost enrollees due to the state’s decreased welfare rolls.

The Public Assistance Cooperative for Energy (PACE) program is a natural gas aggregation program for certain public assistance recipients in Erie, Chautauqua and Niagara Counties in New York State. It began in 1998 as a collaboration of the New York State LIHEAP, the county social services districts, the state Public Service Commission and the National Fuel Gas Distribution Corporation. Its goal is to provide the benefits of competition to low-income, payment-troubled customers by reducing their energy costs through aggregation.

Through PACE, the counties periodically aggregate their own gas supply needs with those of certain public assistance households who are National Fuel customers and then put these requirements out for competitive bid. National Fuel continues to provide gas delivery and is responsible for meter reading, billing and safety. At its peak, the program had about 7,800 participants. Lately, enrollment has fallen to about 4,000 because welfare reform has shrunk the number of customers on public assistance, according to Jonathan Gruchala of National Fuel.

However, the program continues to be successful – with the exception of one year – due to the amount of savings it incurs. Although savings to participating households can vary each year with gas costs, they have totaled nearly $3 million since program inception, and have averaged about 8 percent yearly, according to Gruchala. Since 1998, the state LIHEAP program has claimed the program savings under the leveraging incentive program, including $1.2 million for FY 2001, the highest year. FY 2002 saw no savings for LIHEAP clients, due to the high price of gas during certain months of that year.

The participating low-income customers are known as restricted or "vouchered" customers. Under New York’s welfare program, these households are entitled to a monthly energy allowance, but because they are vouchered, their natural gas heating bill is paid as billed each month by the county social service offices. Their energy allowances are deducted from their monthly public assistance grant.

The accounts of vouchered households must be reconciled annually. Through that process, some are found to have been overpaid through their energy allowances, and they end up owing the county, which must recoup the overpayments by reducing the amount of their public assistance grant by up to 15 percent per month. Other vouchered clients, upon reconciliation, are found to have been underpaid, and the county gives them a refund.

The pilot’s goal was to reduce the amount of recoupments owed by the clients, or to increase the amount recovered by the client in the annual reconciliation, both of which have been accomplished, according to Gruchala.

In an order approving National Fuel’s filing for the aggregation program, the New York PSC wrote that "the pilot program would not only promote competition in the gas market, but more importantly, it would bring the benefits of competition to a group of customers who might not necessarily be pursued by non-utility providers."

For more information, contact Gruchala at (716) 857-7492, gruchalaj@natfuel.com

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Michigan PSC Awards $25 Million For Low-
Income Energy Assistance/Efficiency Programs

 The Michigan Public Service Commission (PSC) recently released $20 million in energy payment assistance funds for low-income households. The money will be distributed through the state Family Independence Agency (FIA), which is the LIHEAP grantee, the state’s community action agencies and other nonprofit groups. Most of it will augment LIHEAP programs.

The money is from the Low-Income and Energy Efficiency Fund (LIEE), established in 2000 as part of the state’s electric restructuring law. The purpose of the fund is to provide shut-off and other protection for low-income consumers and to promote energy efficiency by all customer classes.

The newest order follows two previous PSC orders approving low-income grants from the LIEE fund. In February 2002, the PSC approved the first round of grants from the fund, totaling $27.4 million, to address the needs of low-income customers during the heating season. That money was to be used by the end of September 2002, but the Commission later extended the deadline to February 28, 2003.

The PSC received ten proposals for use of the low-income portion of the fund in the second round of grants, with requests totaling more than $39 million. When awarding the grants in December 2002, the PSC announced that it was giving preference to "organizations with a proven record in distributing energy assistance to low-income residents, an existing administrative structure to handle additional distribution activities, an ability to coordinate the provision of assistance with other service providers, and a plan to serve multiple counties or populations of at least 500,000 people." The grants run through July 2003.

About $12 million, of the $13.5 million awarded to FIA, will provide supplemental LIHEAP payments and $1.5 million will expand the State Emergency Fund.

The biggest share of the grants – $13.5 million – was awarded to the FIA, which also administers the state’s emergency energy payment assistance programs. About $12 million will be used for supplemental payments for low-income households that receive a Home Heating Credit (or LIHEAP benefit). The Home Heating Credit Program, administered by the state’s Treasury Department, disburses LIHEAP funds as drafts for energy bill payments after applicants send in an energy assistance request form. The FIA has an interagency agreement with the Treasury Department to make LIEE funds available for supplemental Home Heating Credits. The remaining $1.5 million will be used to expand the State Emergency Fund, in cooperation with community action agencies.

The remaining $6.5 million from the LIEE fund was awarded to:

In August 2002, the Commission awarded more than $5 million for low-income energy efficiency grants. In this round of grants, the PSC focused on projects that would help low-income residents in owner-occupied, rental, single-family, multi-family, and supportive housing use energy more efficiently and reduce the need for energy assistance. These grants run through March 2003.

More than half of the grant money – $2.7 million – was awarded to the Michigan Community Action Agency Association to enhance the statewide Weatherization Assistance Program with expanded energy efficiency measures and client education.

The remaining $2.3 million was awarded to:

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Georgia PSC Settles USF Suit;
Adds More Money to Fund

The Georgia Public Service Commission has voted 3-2 to amend a section of the 2002 Natural Gas Consumers Relief Act that had evened out the cost of the natural gas system between industrial users and residential users and helped low-income customers pay off current and past bills. The act established a 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.

That program appeared to be in jeopardy in September, when a group of large industrial gas users filed suit, asking that the PSC’s designation of Scana as the regulated gas provider be declared "null and void" (see the Networker, Issue #44). The Georgia Natural Gas Group and Georgia Textile Manufacturers Association were opposed to the surcharge they would pay to fund the regulated gas provider program.

The state’s original 1997 deregulation law basically exempted industrial users from paying for the gas delivery system, leaving payment to residential consumers. The contested 2002 law required a surcharge on large industrial users, to be paid into a universal service fund (USF), to be used for the regulated gas provider program and other relief for poor consumers. The fund was capped by law at $25 million, with any surplus to be refunded to ratepayers. The PSC was to determine the amount of the surcharge and collect it.

In June, the PSC selected Scana as the regulated natural gas provider. The company began accepting customers August 15 and began selling gas to two customer groups on September 1. 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 USF, as does $275,000 for the company’s customer education programs.

The PSC’s October vote reduced the industrial surcharge to zero in the first year, and it agreed to assess only enough to cover expenses – bad debt, low-income energy bills and new pipelines – after that. The Commission’s stipulation orders the industrial users to pay the charge to cover the cost of bad debt after the number of customers who sign up for the regulated provider program exceeds 25,000. The industrial users dropped their lawsuits, and the PSC agreed that they will not be required to pay the surcharge until after September 2003, when the actual cost of the regulated provider program will be determined. No funds from residential ratepayers will be used for the program.

In December, the PSC announced that its audit of Atlanta Gas Light Company would result in additional funding for the universal service fund. As of January 2003, the USF had a balance of $19 million, but that will increase to more than $23.5 million once the AGLC payment is applied.

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Texas Utility Rule Amended
To Protect Low-Income Consumers

The Texas provider-of-last-resort (POLR) program has been amended to protect low-income consumers from higher electric rates. The POLR was easily the most controversial feature of the Texas energy restructuring law.

Residential customers dropped by their electric provider due to chronic payment problems were to be transferred to another provider that charged more expensive rates. The providers of last resort could demand immediate payments of new deposits and could disconnect customers, following traditional utility procedures, when deposits or utility payments were not received on time.

The main criticism of the POLR was that it demanded higher payments from people who could least afford them. Another concern was that the system gave retail energy providers no incentive to retain these customers and work with them to avoid disconnections.

Concerned about the higher rates charged by the POLR, the Office of the Public Utility Counsel and the Texas Legal Services Center filed a suit against the PUC on January 2002, alleging that the POLR rates "unfairly discriminate against low-income customers" and fail to provide customers with access to an affordable rate package as required by the restructuring legislation.

In August 2002, the Commission ruled that customers terminated for non-payment by competitive retailers must be transferred to an affiliated provider at rates no higher than the price-to-beat – the basic, regulated price for electricity – rather than the much higher POLR rate. Once they are switched, these customers can be disconnected after a 10-day notice if they do not make payment arrangements.

Under the new rule, the POLR will serve as a temporary safety net for customers whose supplier leaves the Texas market without transferring its customers to another competitor. Customers switched to a POLR before the new rule was adopted had until the end of December to choose another supplier. If they didn't, they were automatically signed on by the POLR's competitive affiliate. The idea is that these customers will be guaranteed service while they shop around for another supplier.

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New York Energy Consumer
Protection Act Now Law

Governor George Pataki signed into law the Energy Consumer Protection Act of 2002, which gives New Yorkers who buy natural gas or electricity from an unregulated energy services company the same consumer protections they have as utility customers.

The law makes marketers subject to the same fee limits that utilities now face, capping late payment charges at 1.5 percent of the balance. They also will be required to offer budget billing programs to all customers. While many marketers now offer deferred billing programs, they currently are not mandated.

Marketers also will be barred from collecting deposits unless a consumer has a history of delinquent payments. Prepayments, which allow marketers to collect from customers in advance, would not be allowed. The law also gives marketers the ability to shut off service to customers who don't pay their bills under the standards set by the existing consumer protection legislation, known as the Home Energy Fair Practices Act.

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NLIEC, NFFN, NEADA Meet June 8-12

It’s not too early to start planning for the 2003 Joint SacSkyline-lowres.tif (378644 bytes)
Low Income Energy Conferences to be held June  8–12 at the Hyatt Regency in Sacramento, California. This year’s theme is "Prospecting for Solutions and Golden Opportunities."

The annual conferences of the National Low Income Energy Consortium (NLIEC), the National Fuel Funds Network (NFFN) and the National Energy Assistance Directors’ Association (NEADA) begin with NFFN’s annual conference on Sunday and Monday June 8-9. NEADA’s annual meeting starts Sunday and runs through Monday. The NLIEC spans two-and-a-half days, June 10-12.

The NLIEC will feature a plenary session titled "Tracking the Trail of Poverty" with speakers from key national anti-poverty groups. It will also present 25 workshops on LIHEAP issues, consumer education and training, changing utility markets, and energy efficiency, including a number of interactive sessions. Keynote speakers have been invited from the California State Assembly, Public Utilities Commission and Health and Human Services agency.

Offsite activities include a tour of the Sacramento Public Utility District’s facilities and local weatherization and conservation projects. Additionally, the Community Action Partnership will hold an intensive training program immediately following the Joint Conferences.

Preceding its annual conference, NFFN will convene the first-ever California Charitable Energy Assistance Conference on Saturday, June 7, a session of information exchange, learning and establishing ongoing communication. It will highlight the findings of an NFFN study on charitable energy assistance giving before and after the 2000-01 California energy crisis.

Registration brochures will be mailed in February; online registration is available at www.nliec.org.

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Low-Income Energy Resources

NCLC, AARP Publish Utility, Telephone Program Guides

The National Consumer Law Center has a newly updated 2002 edition of its "Access to Utility Service," a manual for consumer law attorneys. It is a comprehensive listing of programs available from regulated, deregulated and unregulated utilities, plus deliverable fuels, and telecommunications programs.

The completely revised edition covers the following:

The manual, which is also available on CD-Rom, can be ordered online from NCLC or by contacting NCLC at 617-542-8010.

AARP

The AARP has a new publication titled "Energy and Telephone Assistance in the States: Public Programs That Help Low-Income Households." It was published in December 2002.

It provides a general overview of the federal energy and telephone discount programs (LIHEAP and the Weatherization Assistance Program, and Lifeline and Link-up, which assist low-income households obtaining and maintaining phone service) as well as individual state profiles of these programs. It also details each state’s seasonal, health and income-related disconnection policies. The 324- page document is available from the AARP Research Center's website and hard copies are also available.

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