Leveraged Resources Increase by 16 Percent
 
Forty-one states, 31 tribes and one territory have reported over $1.9 billion in leveraging activities during FY 2004. The amount leveraged by states and tribes has been increasing each year, and this year’s total exceeds last year’s by about $260 million, almost 16 percent.  The totals are preliminary until HHS conducts its final review of resources and releases leveraging awards, which is expected to occur in May.

The increase in reported leveraging funds continues to come primarily from utility ratepayer-funded resources, which totaled almost $1.2 billion, or 62 percent of all leveraged resources. These include several states’ system benefit charges, also known as public benefit or universal service charges, that were acquired through utility restructuring legislation to fund rate assistance and weatherization programs. 

Rate discounts and credits of $923 million, mostly mandated by state legislatures or utility commissions, accounted for 78 percent of utility resources. Weatherization resources at $124 million, deposit and fee waivers at $97 million, and $31 million in arrearage forgiveness made up the rest of utility-funded resources.

Among other leveraged resources, 31 percent came from state and local government resources, five percent from church, community and fuel fund donations, and two percent from miscellaneous resources such as landlord contributions to weatherization, supplier discounts and bulk fuel discounts.

For the last several years, California, Ohio and Pennsylvania have reported the largest amounts of leveraged resources and reports indicate they will be the top three for FY 2004 as well. California reported almost $500 million, an increase of 25 percent over its FY 2003 total of $373 million. 

California ’s largest resource is its utility-funded California Alternate Rates for Energy (CARE). The amount leveraged for CARE, $453 million, has almost doubled over the last two years and accounted for 90 percent of California ’s total reported resources. CARE provides a 20 percent state-mandated electric and gas rate discount to eligible customers. As a result of expanded outreach mandated by the California Public Utilities Commission, the estimated CARE enrollment has been increasing each year and is over 70 percent of those eligible. As of December 2004, about 3.1 million households receive the discount, compared to 2.8 million at the end of 2003.

Among the other large states, Pennsylvania reported $241 million, the second largest amount, and Ohio had the third largest amount of leveraged resources this year, $207 million, followed by New Jersey and New York with $175 million and $115 million respectively.

In Pennsylvania , the gas and electric utility Customer Assistance Programs, under which low-income customers pay their bill based on a percentage of income, continue to account for about 60 percent of Pennsylvania 's leveraged resources.

Ohio's leveraged resources were about the same as those reported in 2003. The state’s Percentage of Income Payment Plan, which was mandated by the PUC in 1983 and has been funded by a universal service rider on electric utilities since 1999, again accounted for 96 percent of the leveraged resources.

New Jersey's Universal Service Fund, a fixed credit percentage of income payment plan under which participants are required to pay no more than six percent of their annual income toward electric and gas bills, accounted for 82 percent of the state’s leveraged resources.

The majority of New York's leveraged resources are derived from state funds that provide energy allowances to public assistance residents.

The total amount (preliminary) leveraged by the tribes and the Northern Mariana Islands was $2,775,892, the largest since the Leveraging Incentive Program began in FY 1991.

As an example of how well tribes do under the leveraging program, eight tribes and the Northern Mariana Islands reported leveraging amounts that were larger than their regular LIHEAP allotments. The majority of resources reported by tribes are tribal government funds, many from tribal gaming enterprises.

The FY 2005 Health and Human Services appropriations law (Public Law 108-199) earmarked $27.5 million for leveraging incentive grants.

Visit the LIHEAP Clearinghouse website for additional information on state leveraging and awards and for tribal information.

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DC Gets $20 Million for Energy Efficiency,
Renewable and Affordability Programs

On March 7, 2005 , the District of Columbia Public Service Commission approved $20 million for two-year energy efficiency, renewable and affordability programs. About $11.3 million of the $20 million will expand existing programs and support new energy efficiency and affordability programs for the low income.

The programs are funded through the Reliable Energy Trust Fund (RETF), a public benefit fund that supports universal service for low-income customers and residential energy efficiency and renewable resources programs. The RETF was established by a Commission-issued Order on December 29, 2000 and is funded by a non-bypassable surcharge on residential Potomac Electric Power Company (PEPCO) bills. The surcharge adds about 50 cents each month to a typical residential PEPCO bill. Customers in the universal services program do not pay the surcharge.

The two-year affordability programs will be funded at about $2.1 million each year and will include an expansion of LIHEAP and a new arrearage forgiveness component in conjunction with the existing Residential Aid Discount (RAD).

The expanded LIHEAP program will be funded at $850,000 per year and has two components. Under the first component, more District residents who are eligible for LIHEAP will receive energy assistance. According to Richard Kirby, DC’s LIHEAP director, about 29 percent of the District’s residents who qualify for LIHEAP will receive benefits this year. The second part of this program will educate residents about energy efficiency programs.

PEPCO has offered the RAD program for a number of years; initially it was limited to homes with all-electric heat. The RETF was used to expand the RAD to customers who do not have electric space heating. The ongoing RAD expansion has a budget of $775,000 through 2007 and supplements funds that PEPCO contributes for the all-electric RAD.

The new RAD Arrearage Retirement and Education Program will reduce arrearages up to a limit of $250 per household. Customers must participate in workshops that provide energy efficiency and money management education. PEPCO customers eligible for SSI, TANF, Medicaid, Food Stamps or LIHEAP, and who agree to a 12-month payment plan and enroll in the RAD discount, are eligible for the program. One-half of the arrearage payment ($125) will be credited at the onset of the program and the other half will be paid after the customer makes timely payments over the 12 months. The annual budget for this program is $500,000.

Households eligible for RAD can also participate in the RETF low-income weatherization programs. The Commission approved continued funding of $1.1 million that supplements the existing Department of Energy’s Weatherization Plus program. The Commission also agreed to fund new two-year pilot programs – $1.4 million for a refrigerator and air conditioner replacement program and $1 million for the Weatherization-Rehabilitation program. The three components will provide comprehensive energy efficiency services starting with rehabilitation followed by weatherization and appliance replacement.

Included in the $20 million funding are general residential renewable programs, energy efficiency education, rebates for energy efficient appliances and loans to upgrade existing homes. The new programs are starting just as customers begin receiving higher bills from PEPCO. When a four-year cap on generation and transmission rates expired in January 2005, the Commission authorized PEPCO to raise non-RAD residential bills by about $10 per month starting February 8, 2005 . Rates for electric customers who participate in the RAD program are capped until February 2007.

PEPCO’s distribution service rates will remain capped until August 2009 for RAD customers and until August 2007 for all other customers.

The District has another discount not covered under the RETF that is available to low-income customers of Washington Gas. The Residential Essential Service (RES) – a discount rate for gas service that was established in 1986 – is available from November through April. The amount of the RES discount is based on household size and income level. Total discounts vary from $142 to $ 189 per year. About 3,945 households received discounts totaling $836,000 in 2004.

Starting May 1, all Washington Gas customers, except those participating in the RES, will contribute to the Natural Gas Trust Fund through a non-bypassable charge on customers’ bills. The Natural Gas Trust Fund became law on January 28, when the District of Columbia Mayor signed the Omnibus Utility Emergency Amendment Act of 2005. The Fund will be used to increase the RES discount rates by 50 – 75 percent.

DCEO, the LIHEAP grantee, is the designated administrator of the current RETF affordability, energy efficiency and renewable resources programs and will administer the new pilot programs and the expanded RES discounts that are slated to begin in June.

Kirby says the DCEO will coordinate with the utilities and the media to promote the new programs and discounts through posters and ads.

For more information, contact Richard Kirby at (202) 673-6727.

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Arkansas Low-Income Weatherization Fund Struck Down

A civil lawsuit challenging a low-income weatherization fund in Arkansas has ended with a ruling unfavorable to the low income in that state.

State legislation passed in February 2003 (Act 120 and Act 121) gave electric and natural gas utilities the option to contribute to the fund and to assess a rate charge up to $1.00 per month to residential customers.

Entergy, one of the state's largest electric utilities, promoted the bill in the legislature and was the only utility that elected to collect the charge when the legislation was implemented in January 2004.

A Circuit Court ruled in April that monies collected under the legislation are a tax and not a fee. Furthermore, the court said, the legislature had delegated to Entergy the authority to decide to impose the tax, which the legislature cannot do because Entergy is not a political subdivision of the state. Collection of the tax was termed an “illegal exaction” and, therefore, unconstitutional. Defendants were enjoined from collecting further monies and were ordered to refund all monies collected on or after January 6, 2004 , the filing date of the lawsuit.

Proponents had expected to raise between $6.7 and $7 million annually from the assessment, with 70 percent going toward low-income weatherization, and the remainder to an Alternative Fuels Fund for alternative energy grants and research. In May 2004, Entergy rescinded its participation in the program, thus ceasing collection of ratepayer dollars. By court order, the dollars collected have been held in escrow pending resolution of the lawsuit.

An attorney with the Rose Law Firm in Arkansas filed a complaint in February 2004 on behalf of a residential customer of Entergy Arkansas, Inc., challenging the legality of the fund. The suit named Entergy Arkansas, Inc., as well as the auditor of the state, the state treasurer, the Alternative Fuels Commission and the directors of the state’s Departments of Finance and Administration and Department of Human Services (the LIHEAP and weatherization grantees) as defendants.

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Massachusetts Gets $7.5 Million State Supplement;
Other NE States Not as Successful

Massachusetts Governor Mitt Romney in late March signed a bill allocating $7.5 million in state funds to the Massachusetts LIHEAP. The funds were to be used immediately, most likely to increase recipients’ benefits.

The effort to obtain the state supplement was led by the state's community action programs with assistance from the National Consumer Law Center . It received strong support from a range of senators and representatives from both parties.

Advocates, who initially sought $15 million, pointed out that from 1980 to 1999, Massachusetts had supplemented its LIHEAP with funds from the state budget, starting with $15 million but dropping to $750,000 in 1999 and to zero after that. They also noted that heating oil prices have soared this winter, hovering around $2 per gallon – about 37 percent higher than last year.

Among other northeast states, legislation has been introduced in Rhode Island and Vermont to fund energy assistance, but so far these measures have been unsuccessful. In Rhode Island , a proposal has been introduced that would raise $4 million each year, and be partially financed by a new tax on home-heating oil. The plan would offer families a one-time forgiveness of a portion of their arrears along with assistance based on household income.

AARP and other advocates in Vermont have initiated legislation to fund an electric affordability program in that state. Their bill proposes to create an $8 million per year statewide electric bill payment assistance program for low-income customers . It would be financed by an assessment on electric customers and would be a percentage of income payment plan.

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Montana Gets Supplemental State Resources

Around the country, there has been legislative activity pertaining to energy assistance in several states. Thus far, however, the only state other than Massachusetts (see story above) that’s had any success with state funding has been Montana .

Governor Brian Schweitzer pledged to add $8.4 million from state funds to supplement Montana ’s LIHEAP and weatherization programs, but legislators diverted most of that funding to other social service programs. By the end of the legislative session only $1 million in state funds remained to supplement LIHEAP during the next biennium; the state also allocated $907,000 for the current year.

Also included in the state budget for the next biennium was $600,000 for an “energy ombudsman” position. The funds are to be used only for “case management-type staff at human resource development councils (community action agencies) whose purpose is to assist low-income customers seeking emergency energy assistance.”

Additionally, the governor signed SB 365, which extended Montana ’s universal system benefits (USB) charge through December 31, 2009 ; otherwise the fund would have expired at the end of 2005. Created under the state’s 1997 deregulation legislation, the USB charge, paid by most electricity and natural gas customers, ensures continued funding of and new expenditures for energy conservation, renewable resource projects and applications, and low-income energy assistance and weatherization. From 1999 through 2004, the USB charge from the state’s largest utility alone has generated nearly $18 million for low-income energy. This amount has been used primarily to fund electric and gas bill discounts and weatherization.

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Low-Income Programs Continued,
Expanded in New York

The New York Public Service Commission on March 16 approved a three-year electric rate plan for Consolidated Edison, which serves New York City and Westchester County . The plan continues the utility’s electric Low Income Plan with funding at $37.5 million for the three-year period beginning April 1, 2005 . The previous low-income program was approved in October 2000.

The plan provides eligible low-income customers a discount on the customer charge portion of their monthly electric bill, which is $10.85 for non-participants. However, some advocates noted that under the newly approved plan, low- income households will pay a customer charge of $6 per month, whereas under the previous program they paid $5. Also, under the previous program, the discount was available to households enrolled in LIHEAP and several other means- tested programs; the new program reduces the number of qualifying programs. During FY 2004 about $6 million in discounts was provided to over 174,000 LIHEAP households.

Additionally, Con Edison began its first low-income program for gas customers after the Commission in October 2004 approved a multi-year rate plan for the utility’s gas and steam services. The low-income rate is targeted at low-income heating and non-heating customers and provides rate relief totaling $1.6 million annually through September 2007. To qualify for the program, a customer must be receiving benefits under Supplemental Security Income, Temporary Assistance to Needy Persons, Safety Net Assistance, Medicaid, or Food Stamps, or have received LIHEAP in the preceding 12 months. Participants receive a 25 percent discount on delivery rates for monthly usage between four and 90 therms.

The Commission also approved $5.2 million in funding for gas efficiency programs with half of that amount proposed for low-income gas efficiency. However, the programs won’t get underway until completion of a Commission-ordered study of the potential to achieve cost effective gas efficiency savings in Con Edison's service territory.

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Maine Volunteers Weatherize Seniors’ Homes

A volunteer effort in Maine has resulted in the free weatherization of about 1,500 homes of low-income seniors across the state.

Titled “Operation Keep ME Warm,” the statewide effort was designed to provide some basic home weatherization for up to 3,000 low-income seniors. Due to its success in this, its initial year, it will be repeated and expanded next year with an earlier starting date.

The service was available to seniors that had applied and qualified for LIHEAP and was targeted to those with the highest fuel use. After receiving a letter inviting them to call a toll-free number to register for the service, participating seniors were matched with a team of three or four volunteers who visited their homes between December 4 and December 12. Volunteers came equipped with a kit that allowed them to do basic weatherization of the homes, including installing door, window, and pipe insulation, energy efficient light bulbs and caulking.

Nearly 300 teams affiliated with hundreds of businesses, clubs, churches and schools volunteered their services with over 1,000 volunteers participating. The project was supported by the Office of the Governor, the Maine State Housing Authority (the LIHEAP grantee); the Maine Emergency Management Agency, the Public Utilities Commission, the Maine National Guard, the American Red Cross, community action agencies and the Maine Commission for Community Service.

Donors to the project included Home Depot, Georgia-Pacific, the Maine Oil Dealers Association and the Northern New England Passenger Rail Authority.

For more information, contact Beth Nagusky, 207-287- 4315, or  Beth.Nagusky@maine.gov.

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“Cool Ideas / Sizzling Solutions” is the theme of this year’s joint low-income energy conference at the Hyatt Regency in Phoenix , Arizona , June 12-16.

The National Fuel Funds Network’s (NFFN) conference and the National Energy Assistance Directors’ Association (NEADA) annual meeting both convene on Sunday and Monday June 12-13, followed by the National Low Income Energy Consortium (NLIEC) conference that spans two-and-a-half days.

NFFN’s 21 st annual conference hosts twelve workshops and a series of roundtables that address the hottest topics in the charitable energy assistance world: fundraising successes, low-income utility programs, state-of-the-art media work and breakthroughs in organizing support for both fuel funds and LIHEAP.

Featured NFFN conference speakers are Kevin Monte de Ramos and John Harpole of Mercator Energy. Monte de Ramos is the author of Poverty and the Public Utility and specializes in the design and evaluation of low-income programs. A presentation by Harpole titled “ Securing Energy Assistance from Royalties-In-Kind” concludes the two-day sessions.

A highlight of the NLIEC’s 19 th annual conference is a town hall meeting, “ A Place at the Table…. Making a Difference,” on Wednesday June 15. A dynamic panel of utility regulators will explain the regulatory process and discuss the role that conference attendees can play as advocates for change. Speakers are The Honorable E. Shirley Baca, New Mexico Public Regulation Commission; The Honorable Deirdre Manning, Massachusetts Department of Telecommunications and Energy and The Honorable Marc Spitzer from the Arizona Corporation Commission.

Two special sessions at NLIEC’s conference will address tribal issues beginning with a guided “tour” of the federal requirements of running a tribal program, presented by U.S. Department of Health and Human Services / Division of Energy staff. A second session will feature roundtable discussions on issues facing tribes. Tribal LIHEAP directors will lead small group discussions on topics such as leveraging, REACH, eligibility issues, vendor issues, vendor agreements, targeting benefits and other topics of interest gleaned from a survey of tribes prior to the conference.

A tour of solar projects in Phoenix will be available to a limited number of conference attendees.

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During March 2004 to March 2005, The National Association for State Community Services Programs (NASCSP) published and distributed three issue briefs highlighting the efforts and successes of states, state associations, and community action agencies (CAA) in responding to issues and current trends in the Community Services Network.

The first issue brief, “A Match Made in Heaven: Community Action Agencies and Faith-based Organizations,” showcases the partnerships between CAAs and community and faith-based organizations to enhance service delivery.

The second, “Welcoming New Americans: Community Action Agencies Open Their Doors to Immigrants,” demonstrates the responsiveness of CAAs in developing programs to respond to immigrant populations within their communities.

The third, “Exercising Discretion: How States Utilized Discretionary Funds,” highlights the efficient and effective use of state discretionary funds in enhancing and building the capacity of agencies.

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A senior program in Manatee County , Florida , does extra duty by providing not only food but energy aid to eligible households.

The county’s Meals on Wheels PLUS, in addition to delivering meals to seniors, also provides fans, air conditioning service, and assistance with final notice electric bills to qualified seniors aged 60 and older through the Emergency Heat and Energy Assistance Program (EHEAP).  Up to $300 per household per season is available for electric bill payments.

The EHEAP program is administered with LIHEAP funds through a contractual agreement between the Florida Department of Community Affairs, the LIHEAP grantee, and the Florida Department of Elder Affairs (DEA), which funds elder service providers throughout the state.  About 6 percent of the state’s LIHEAP allocation is transferred to the DEA.   The funds are specifically targeted for energy crisis assistance for the elderly. The income and program requirements are the same as those of the regular Florida LIHEAP except only crisis assistance is provided. 

Meals on Wheels PLUS of Manatee, Inc., has been providing cooling equipment and electric bill payment for several years.  Other funding sources include the West Central Florida Area Agency on Aging, Inc., the Respite for Elders Living in Everyday Families Program, and local donations, grants, and fund raising projects.

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The National Energy Assistance Directors' Association (NEADA), representing the state directors of LIHEAP, on April 19 released a study reporting that between the winter heating seasons of 2001-02 and 2004-5, the share of low- income households' heating expenditures covered by the average LIHEAP grant has been reduced.

Depending on a households' main heating fuel type, the reductions were as follows:

• Heating oil from 49.4 percent to 25.2 percent
• Natural gas from 52.3 percent to 33.4 percent
• Propane from 35.5 percent to 23.1 percent.

According to NEADA, the decline is due to two factors: First, the price of home energy has increased dramatically. Since the winter heating season 2001-02, the price of home heating costs for heating oil users has increased from $637 to $1261, for natural gas users from $602 to $954, and for propane from $888 to $1377. Second, the total number of families receiving LIHEAP grants during this period has increased by 21.4 percent, from 4.2 million to 5.1 million.

The drop in purchasing power has occurred during a period when total federal appropriations for LIHEAP have increased by 21.4 percent from $1.8 billion to $2.186 billion. Average grant assistance for home heating during this period increased by only 1.0 percent from $315 to $318, according to NEADA.

Table 1: Change in % of Average Winter Home Energy Expenditure Covered by LIHEAP  

Table 2: Change in Home Heating Costs

Table 3: Change in Average Federal LIHEAP Grant

For more information, see NEADA's press release.

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A National Fuel Funds Network (NFFN) project called “National Mobilization for Charitable Energy Assistance” has brought increased attention to charitable energy assistance programs, also called fuel funds. 

In October, NFFN Chairperson Carol Clements wrote to all of the nation’s governors asking for their help in increasing contributions to and raising public awareness of charitable energy assistance programs. The following states responded to the outreach:

In Michigan , Governor Jennifer M. Granholm declared the week of February 21 as “Keep Michigan Warm Week” and urged the state’s residents to contribute to charitable energy assistance programs like The Heat and Warmth Fund (THAW).

In Maryland, the state Office of Home Energy Programs (the LIHEAP grantee), and the UMBC Maryland Institute for Policy Analysis and Research sponsored a symposium in late February on the impact of high-energy costs on low-income families.  The symposium was part of a statewide “Energy Assistance Week”, which had been proclaimed by Governor Robert L. Ehrlich Jr.

As part of the week’s activities, Governor Ehrlich was featured in radio public service announcements supporting energy assistance programs.  Other “Energy Assistance Week” activities included energy expositions in several Maryland counties; educational activities at public schools, proclamations from county commissioners, and increased outreach and public education efforts.

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