Arkansas Approves Energy Efficiency Programs

On January 11, the Arkansas Public Service Commission (PSC) adopted rules that are expected to lead to the state's first utility-funded energy efficiency programs, including weatherization of low-income households. 

As part of the state's first regulatory framework for energy efficiency programs, the Commission ordered all jurisdictional electric and gas utilities to begin implementing cost-effective energy efficiency programs for all customer classes. 

The rules were the result of a collaborative process; participants included the state's utilities, the state community action association, industrial and commercial customers and the PSC. Utilities were ordered to file plans for programs that could get underway on a "quick start or pilot" basis by April 12, 2007 with full implementation no later than September 1, 2007 .

Low-income households are expected to be served under a "quick start program" for "severely energy-inefficient homes" that may be weatherized through the state's Weatherization Assistance Program network and guidelines.  Eligibility criteria would include age, type and energy efficiency condition of homes, but not income, because collaborators agreed that a low-income specific program could not be approved in Arkansas due to potential lawsuits.  

An attempt to legislate a low-income energy efficiency and an alternative fuels program in 2003 did result in a lawsuit. State legislation passed in February 2003 gave electric and natural gas utilities the option to contribute to a special fund and to assess a charge up to $1.00 per month to residential customers. A lawsuit ensued and a court in April 2005 ruled that monies collected under the legislation were a tax and that the legislature had no authority to impose a tax. (See LIHEAP Networker #54 for more information.)

While the PSC's order didn't address a specific funding amount for the weatherization program, funding in the range of $4 million annually was discussed in various proposals.

In starting the rulemaking process a year ago, the PSC cited record natural gas prices and the nation's energy crisis, along with Arkansas ' ranking as one of the states with the fewest conservation and energy efficiency programs. Additionally, the PSC stated that it was critical to ratepayers and the state's future that more attention be focused on ways to reduce all consumers' electricity and natural gas usage.

For more information, see the PSC website and search for Docket # 06-004-R, including Order Number 12, dated January 11, 2007.

Return to Contents


Massachusetts Reports Gains from Automatic Enrollment Process

Massachusetts has some of the most generous utility discounts for low-income households in the country. Historically, however, less than a third of those eligible for the discounts have received them and this problem has been tackled by low-income advocates, the state community action agency, the state regulatory agency and others.

A process to automatically enroll income eligible households in the discounts began in 2001 with actual implementation underway since early 2005. As of mid-2006, it has shown results: an estimated 61,000 additional households are enrolled in gas or electric utility discounts, with an aggregate savings to the households of at least $9 million, according to the National Consumer Law Center , of the advocacy groups that worked on the enrollment process.

The process involves agreements among the utilities, the Department of Telecommunications and Energy, the regulatory agency, and the Department of Transitional Assistance (DTA), which administers a range of health and human service programs and has a database of program recipients. Through a computer match of utility company residential customer data files against DTA files, income eligible households are added to the discount. (For more details on the process, see LIHEAP Networker # 48)

The DTE requires utilities to submit quarterly reports tracking the number of customers enrolled in the discounts through the computer match as well as by traditional means such as the LIHEAP application process at community action agencies. The tracking began in April 2005 and reports are available through June 2006. Enrollment totaled 237,742 households in April 2005; by June 2006 it had escalated to 309,115 households.

About 24,295 additional electric utility customers received the discount via computer matching along with 36,955 gas customers. According to LIHEAP leveraging reports for FY 2006, the discounts amounted to $52.5 million, up from $42.6 for FY 2005.

For more information on the computer matching, see the DTE's order of August 2003.

Return to Contents

California PUC Sets $1 Billion for 2007 Low-Income Programs

The California Public Utilities Commission (CPUC) has authorized a 2007 budget of over $1 billion for the four largest utilities' low-income energy assistance and energy efficiency programs.

The budgets exceed 2006 spending levels mainly because in November 2005 the PUC increased program income eligibility maximums to 200 percent of federal poverty guidelines from 175 percent, making more customers eligible for the low-income programs.

Energy assistance, in the form of 20 percent electric and gas bill discounts, is provided by the utilities though the California Alternative Rates for Energy (CARE) program and energy efficiency through the Low Income Energy Efficiency (LIEE) program. The 2007 CARE budget is $954 million, up from an estimated $793 million spent during 2006, and $622 million budgeted before income levels were increased. These totals are CARE discount spending only; they don't include administrative, outreach and other utility expenses, which amount to about $20 million.

The LIEE budget for 2007 totals $133 million for repair and replacement of gas and electric heating and water heating systems, air conditioners and evaporative coolers, refrigerator and lighting upgrades, weatherization, cooling centers and energy efficiency education. This amount doesn't include administrative costs and other program activities such as inspections, management and evaluation, which total another $24 million. Utilities spent at least $108 million on LIEE during 2006.

The PUC said the expanded funding would provide discounted energy rates to more than 3.9 million low-income customers and energy efficiency services and products to more than 150,000 low-income households statewide this year. During 2006 about 3.6 million households received CARE and 150,000 households received LIEE.

The four major utilities are San Diego Gas & Electric, Pacific Gas and Electric, Southern California Edison, and Southern California Gas Company.

For more information, see the PUC order authorizing the budgets.

Return to Contents


Arizona Fuel Fund in Planning Process

Arizona's first statewide fuel fund, now in the planning stages, is slated to start October 1. The Arizona Community Action Association (ACAA) was awarded a three-year contract with the state's Department of Economic Security, the LIHEAP grantee, to establish the statewide program.

Start-up funding for the program comes from a settlement with El Paso Corporation. A 2003 lawsuit filed by the Arizona Attorney General alleged that the company manipulated the supply of natural gas, resulting in higher prices for Arizona consumers.

The lawsuit resulted in a $78 million settlement that will provide improvements to the pipeline that supplies Arizona consumers with natural gas. Under the settlement with El Paso, $3 million was earmarked for low-income energy assistance. Advocates for the low income favored creating a sustainable fund with the settlement monies instead of depleting the funds by providing immediate energy assistance.

Jeff Jameson, formerly with the $1 Energy Fund, Inc., of Pittsburgh , was hired to direct the new fuel fund with Cynthia Zwick, ACAA Executive Director, providing strategic oversight. A board of directors has been formed that includes utility and tribal representation; committees are forming and by-laws are being established. A grassroots naming contest for the fuel fund is underway.

Of the $3 million, $2.3 million is available from the state for customer assistance, to be drawn down as a match to the fuel fund's fundraising activities. Additionally, ACAA is planning a broad fundraising agenda that will include utility company and customer giving, grant writing, events and individual giving. Initial administrative funding in the amount of $430,000 has also been provided through the state over the three-year contract.

Between 60 and 100 community action agencies and other nonprofits will provide program intake. Plans include implementing a statewide internet-based application process and data management system to make application as easy as possible for caseworkers and clients.

Jameson anticipates that the fuel fund will use broader eligibility requirements than LIHEAP—Arizona uses 150 percent of the federal poverty level—that will include higher incomes and hardship cases. Payments will go towards heating or cooling bills.

Return to Contents


Discounted Oil Helps Poor in 15 States and DC

Since the start of winter, a partnership between Citizens Energy Corporation of Boston and CITGO, the petroleum company owned by the Venezuelan government, has expanded to target 15 states and the District of Columbia .

The partnership involved 8 states last year, providing 40 million gallons of heating oil to thousands of low-income households.

This year, Citizens Energy received 100 million gallons of heating oil for the program from CITGO and the two organizations hope to provide oil to 400,000 families, according to Brian O'Connor, a Citizens vice president. The 15 states targeted by Citizens are: AK, CT, DE, IN, ME, MD, MA, MI, NJ, NY, PA, RI, VT, VA and WI. Citizens made the first delivery in New York City on November 17.

Participants can receive up to 200 gallons of heating oil at a 40 percent discount from Citizens Energy, a Boston non-profit that has run a discount heating oil program for years.

Most states have declined to be officially involved in the program because of the insulting remarks that Venezuelan President Hugo Chavez made about President Bush at the United Nations in September. However, it is operating in all the targeted states through marketing channels not dependent on state governments, O'Connor said.

In several states, local nonprofits are referring applicants to Citizens after which Citizens connects the customer with a participating oil vendor; others sent letters to their heating oil households (with costs borne by Citizens) informing them that they were eligible for discounted heating oil and providing Citizens' toll-free number.

In most states, Citizens has conducted its own outreach in media outlets so that people can sign up for the program on their own; it also has conducted considerable outreach to oil dealers to ensure their participation.

The two companies have also continued a program to provide free oil to homeless shelters.  

For more information about the program, see the Citizens website.

Return to Contents

Tribes Get Help From Heating Oil Program

The CITGO Tribal Heating Oil Program is expected to provide 10 million gallons of heating oil worth about $11 million to 163 tribes in Alaska , Maine , New York and Minnesota this winter, according to a CITGO official.

Of the 163 tribes participating in this year's program, 151 are located in Alaska ; the program will provide more than 1.3 million gallons of heating oil worth approximately $5.8 million to about 11,000 households.

To qualify for the aid, communities must have a population of at least 80 percent Alaska Natives, although any household in these villages, regardless of race, can receive the oil.

To avoid the cost and complication of shipping oil to rural Alaskan villages, CITGO will send the monetary equivalent to non-profit groups who will purchase heating oil directly from local vendors. Alaskan households began receiving vouchers in January for 100 gallons of heating oil from 12 Native non-profits that are coordinating the oil program statewide.

Prices for heating oil in Alaska range from $3.94 per gallon in Kotzebue to $7.35 per gallon in the Arctic village of Ambler . One hundred gallons costing $735 might last 10 days to two weeks to heat a modest home.

Fuel deliveries began in New York in mid-November for at least two tribes and in Maine, four tribes that participated in the program during the winter of 2006 have again received discounted oil.

Return to Contents

Massachusetts LIHEAP Audit Shows Improvements and Restored Funding

An audit of the Massachusetts Fuel Assistance Program from October 2004 through June 2006 was published by the state auditor last December. This is a follow-up audit for the Department of Housing and Community Development (DHCD), the LIHEAP grantee, to determine the status of issues identified in a previous audit that was completed April 2004.

General objectives of the follow-up audit were to assure that DHCD had strengthened its income verification procedures to ensure that only the target population received LIHEAP benefits; and to provide updated information on the environmental and economic factors previously reported as having the greatest impact upon low-income families trying to meet their home heating costs.

The audit found that DHCD has issued new program guidelines and that the local administering agencies have strengthened their income verification procedures, ensuring that only low-income households most vulnerable to high energy costs receive program benefits.

The audit two years ago was seen as a catalyst for restoration of legislative appropriations to fuel assistance in fiscal years 2005 and 2006, after a five year absence of such funding. In the most recent audit, the auditor renewed his recommendation that the governor and legislature seek a state appropriation to be used only during the most severe winters and only after federal funding has been depleted.

Contrary to the prior audit recommendations, the audit found that DHCD still does not require LAAs to obtain income tax returns from all applicants.

Finally, the audit noted that the environmental and economic factors that hindered the program's effectiveness in the past, (rising fuel costs and increases in the numbers of program applicants), have continued to hamper the program's effectiveness over the past two winter seasons. Thus, despite increased federal and state funding for the program, low-income families still have serious difficulties meeting their annual fuel cost.

The audit is available at the Massachusetts State Auditor website.

Return to Contents

Ohio Energy Efficiency Program Lowers PIPP Costs

The third impact evaluation of the Ohio Electric Partnership Program (EPP) was completed in June 2006 and is posted on the website of the Ohio Department of Development, the weatherization grantee.

The program provides electric efficiency improvements and energy education to households enrolled in Ohio's statewide Percentage of Income Payment Plan (PIPP).

The evaluation shows the EPP continues to produce substantial electricity savings in thousands of PIPP households each year, having served over 40,000 since it began in March 2002.

The program has three components: for those with high baseload use, moderate baseload use and those with moderate or high electric heating or cooling. The evaluation found the programs for high baseload users and for high heating and cooling users were cost effective with savings-to-investment ratios of 1.50 and 1.37 respectively. The program for moderate users was not cost effective.

The program provides in-home audits, appropriate electric baseload and thermal energy efficiency measures, and consumer education. The major program treatments include replacement of inefficient refrigerators and freezers and installation of compact fluorescent light bulbs, along with consumer education that helps participants get the most benefit from their electricity while learning ways to lower their usage.

EPP was designed to provide savings to ratepayers by lowering the costs of the ratepayer-funded PIPP as well as participants' energy bills. The evaluation found it has been successful, in that the $12.7 million in lifetime bill savings shown in this evaluation are estimated to reduce the cost of PIPP by $11.3 million and provide $1.4 million in out-of-pocket savings to the participants.

Return to Contents

NLIEC Launches Online Publication

The National Low-Income Energy Consortium in January launched its first edition of the Journal of Energy Assistance, an online journal that is available on the organization's web site.

Published quarterly, the Journal presents educational materials and peer-reviewed research relevant to energy assistance and energy affordability. Research and evidence-based articles, case studies and examples of best practices in the field will be showcased in the Journal.

Included in the first issue is a paper from APPRISE, a nonprofit research institute, that provides a review of energy affordability program design options for administrative efficiency, benefit determination, and benefit distribution with incentives for usage reduction. The paper also reports on the benefits that could accrue from linking a payment assistance program with other assistance programs, including LIHEAP.

Another article, from the National Consumer Law Center , describes Project Stay Connected, a Massachusetts pilot that publishes and distributes a how-to manual, Utilities Advocacy for Low Income Households; delivers advocacy training to a wide range of front-line staff, and advocates for new policies and programs for low-income utility consumers. The project has also helped implement automatic enrollment in that state's discount rates (see related article) and contributed to passage of legislation that clarifies customers' right to payment plans and mandates the adoption of arrearage management programs.

An October 2006 study by the American Gas Association that discusses the persistent gap between available funds and the number of households that qualify for assistance is republished in this issue of the Journal .

Return to Contents


High School Students Help with Minnesota Energy Assistance

Youth Energy Assistance (YEA ) is a group of young Minnesotans dedicated to helping state residents who can't afford to heat their homes.

The group started in 2005 after Maria Sperduto, one of its founders, had been vacationing in Montana and read a news article about reduced funding for energy assistance and the hardships faced by the low income.

After arriving back home, the high school student researched energy assistance programs in Minnesota and decided to start YEA. She met with the director of her local LIHEAP administering agency, the Community Action Program of Suburban Hennepin, and learned about its emergency fuel fund, Reach Out for Warmth. ROFW, funded by the LIHEAP and state, corporate and individual contributions, matches all donations two to one. It assists households that are over-income for LIHEAP or provides additional help when federal funds are inadequate to meet households' needs.

Sperduto then took the energy assistance cause to her Student Senate and developed a series of school fundraising activities, including selling scarves made by students. All funds raised by YEA were donated to ROWF and matched two to one. The group plans to be active in the summer by selling root beer floats and raising awareness of the state's energy assistance needs.

Return to Contents

California Utility Boosts Aid After Storm

In response to a freeze that hit central California in January, the state's largest utility has increased its emergency assistance grants from $300 to $500 in 13 affected counties.

The Pacific Gas and Electric Company's REACH  (Relief for Energy Assistance through Community Help) fuel fund will provide the larger grants and also make it easier for people to qualify. Assistance is available to households earning up to 200 percent of federal poverty guidelines that haven't received a grant since October 2006.

Additionally, the utility will make up to $100,000 in charitable contributions to food banks that serve the areas impacted by the extreme weather.

Following the freeze that lasted from January 11-17, Gov. Arnold Schwarzenegger declared a state of emergency in the 13 counties within PG&E's service area. Because the freezing weather ruined about $1 billion worth of fruit in the state's citrus-growing region, over 12,000 fruit pickers and packers will probably be unemployed.

Since 1983, REACH has provided $50 million dollars to more than 400,000 households with utility emergencies. It is administered by the Salvation Army. 

Return to Contents

Oregon Study Shows Weatherization Economic Benefits

Oregon Housing and Community Services (OHCS), the state LIHEAP and weatherization grantee, recently completed a study exploring the economic impact of Oregon 's Weatherization Program on communities across the state. 

The research found that low-income weatherization significantly benefits local economies; sometimes doubling the initial economic and employment impacts from program expenditures and household energy savings. Titled  The Economic Impacts of Oregon's Low IncomeWeatherization Program: An Input-Output Analysis, the study used input-output analysis to measure how weatherization dollars that move between businesses, vendors and households “multiply.”

Findings included:

• For every weatherization program dollar spent in Oregon counties up to another $.83 is generated locally. Labor income is impacted as well; for each dollar spent on employee compensation through county weatherization programs, up to another $1.43 in labor income is produced within communities. Additionally, each job associated with weatherization programs produces up to another 1.3 jobs locally.
• Increased household spending as a result of energy savings also stimulates local economies. Dollars that would in most cases “leak” to out-of-town utility companies are instead spent on other goods (e.g. rent, food, clothing, transportation) in residents' own communities. This increased spending results in additional jobs, earnings and overall economic growth. Every dollar spent as a result of energy savings yields up to another $.63 within Oregon counties, and $.85 statewide.

In 2005, agencies throughout Oregon weatherized 3,821 homes, helping low-income families increase self-sufficiency through energy conservation and lower utility expenses.

See the study for more information.

Return to Contents


Low-Income Energy Resources

"Unhealthy Consequences: Energy Costs and Child Health," the Child Health Impact Working Group, November 2006. A panel of medical professionals from Boston University  School of Medicine, Harvard School of Public Health, Brandeis University and other research organizations, authored this report which documents how low-income families facing disproportionately high energy costs are forced to make household budget trade-offs. Includes recommendations regarding federal and state energy assistance funding, LIHEAP program outreach and utility arrearage and shut-off data collection.

"Heat or Eat: The Low Income Home Energy Assistance Program and Nutritional and Health Risks Among Children Less Than 3 Years Old," Boston University School of Medicine, November 2006. Showed that children living in households receiving energy assistance were less likely to be undernourished, less likely to suffer from childhood obesity and had lower odds of being hospitalized than children in comparable households not receiving aid. 

"Weatherization Assistance Program PY 2005 Funding Survey," National Association for State Community Service Programs, September 2006. This national survey reports nearly $651.5 million was available during Program Year 2005 to operate the Weatherization Assistance Program an increase of 8.7 percent over PY 2004 funding of $599.2 million. Details funding amounts from DOE, LIHEAP, settlements, utilities and other sources. During 2005 the weatherization network weatherized approximately 171,233 homes using all funding sources.

Return to Contents