State Deficits Soar, Little Funding for Energy Assistance

Despite the ever-increasing need for energy assistance nationally, few state governments have taken action on the problem.

This may be due to the fact that many state governments are facing budget deficits, according to the National Conference of State Legislatures. It reported that as of mid-April, 16 states and Puerto Rico reported budget shortfalls because tax collections had fallen short of estimates, and that for the upcoming fiscal year, 23 states and Puerto Rico are reporting budget shortfalls totaling $26 billion.

As reported in the last two issues of the LIHEAP Networker, only nine states supplemented energy assistance funding for this past winter (Connecticut, Massachusetts, Missouri, Indiana, Michigan, Ohio, Indiana, Vermont and Wisconsin). In only four of them, Connecticut, Massachusetts, Missouri and Vermont, did the money come from state funds, in the others the source was ratepayer funds (Indiana, Michigan, Wisconsin) or surplus TANF funds (Ohio and Indiana).

Since then, only Georgia and Maryland have provided energy assistance funding. The Georgia Public Service Commission allocated $7 million from the state’s natural gas Universal Service Fund (USF) to the Georgia Department of Human Resources (DHR), the LIHEAP grantee. Customers of Atlanta Gas Light received grants up to $250 each to help pay their winter gas bills. The USF is funded through surcharges on large industrial users.

Alaska, one of the few states reporting a budget surplus, in April passed legislation allocating $10 million to the state’s LIHEAP, but the bill hasn’t yet been signed by the governor.

If approved, it would grant energy assistance to 3,800 more households.

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Nebraska Scores Gains for Low-Income Energy

Based in part on activities of a new energy affordability coalition, Nebraska has seen some recent success in efforts on behalf of low-income households.

NEAN, the Nebraska Energy Assistance Network, began during 2006 to assist Nebraskans with their energy needs through education, advocacy and partnerships (see LIHEAP Networker # 65.)

On April 16, 2008, Nebraska Governor Dave Heineman signed legislation that establishes the Energy Conservation Improvement Act. Recognizing that many state residents are finding it difficult to pay heating and cooling costs and that energy conservation helps maintain affordable bills, the act enables electric public power utilities to develop energy conservation programs for low-income customers.

Starting July 1, 2009, a public power district may designate up to 5 percent of the state sales tax collected from customers to be deposited in the Energy Conservation Improvement Fund. The public power districts must match the amount collected.

Grants from the fund will be available to households at 150 percent or less of federal poverty guidelines for energy conservation improvements. Implementation details are being worked out by the utilities. The legislation, LB 1001, is available on Nebraska's legislative website.

On February 1, more than 700 adults and children walked a mile in sub-freezing temperature in the Heartland of America Park in Omaha to raise awareness and money for local energy assistance programs. The first Walk for Warmth event in Nebraska, it raised about $35,000 to help customers of three utilities with bill payments. Many more in-kind and sponsor donations helped make the Walk a success.

In 2007, realizing that each year thousands of citizens struggle to keep their homes warm in the winter and cool in the summer, a core planning team of three utilities and the agencies that administer their low-income assistance programs started planning the 2008 Walk. That same year, requests for utility assistance outnumbered all others on the state’s 2-1-1 call line.

Participating walkers paid entry fees and filled out pledge sheets with donations from friends and family. Many volunteers helped with registration, water stations, activities and hospitality. The community also thanked walkers by contributing to appreciation bags and an opportunity to win a raffle prize.

In April, Omaha Public Power District (OPPD), Aquila and Metropolitan Utilities District (MUD) each received $10,000 from Walk for Warmth to supplement their existing assistance programs.

OPPD and MUD collaborate to provide bill assistance to their customers throughout the year. MUD’s Heat Aid is administered by the Salvation Army and serves customers of OPPD and MUD with assistance during the winter months. After May, OPPD's Energy Assistance Program provides assistance to customers of both utilities.

MUD’s program is only for seniors who have received a disconnect notice and have applied for LIHEAP. OPPD’s program, administered by American Red Cross-Heartland Chapter, primarily serves seniors, disabled and families in crisis and has no set eligibility limit. Aquila ’s assistance program operates through HeatShare and is administered by the Salvation Army. Customers must have a shut-off notice, be income eligible and must have applied for assistance from LIHEAP or from other private or public agencies and been denied to receive one-time assistance. Each utility’s program has an annual budget of about $300,000 and combined, they help about 3,500 people each year.

The Walk for Warmth is expected to grow and supporters hope it will be statewide some day.

Visit the Heartland Walk for Warmth website for more information and photos of the event.

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DC Commission Extends Low-Income Programs

The District of Columbia Public Service Commission has extended energy efficiency and rate assistance programs for low-income residents with funding of over $5.4 million for 2008.

Low-income electric customers have benefited from universal service, energy efficiency and renewables programs since 2000. The programs are funded through the Reliable Energy Trust Fund (RETF), which is financed 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.

On December 27, 2007, the Commission approved the extension of low-income programs funded by the RETF. The programs are extended through September 30, 2008 with funding over $3.7 million, including administration costs.

Three programs, funded at nearly $1.1 million, address energy affordability through rate assistance and arrearage forgiveness.

The LIHEAP Expansion and Energy Education program supplements the regular LIHEAP with bill payment assistance and educates residents about other energy efficiency programs.

The Residential Assistance Discount (RAD) Expansion increases the availability of the existing discounts to more LIHEAP-eligible PEPCO customers by providing additional funds to PEPCO. The utility has offered the RAD for a number of years with total annual savings of $102 and $240 for all-electric customers.

The Arrearage Retirement program reduces eligible participants’ electric bills up to $250 on the condition that customers make specified co-payments and participate in the education, efficiency and RAD programs.

Households eligible for RAD can also participate in the RETF low-income weatherization programs. Three components, funded at $2.6 million, provide comprehensive energy efficiency services starting with rehabilitation followed by weatherization and appliance replacement.

The combined Weatherization Plus and Appliance Program expands the District Department of the Environment’s (DDOE) weatherization programs by adding electricity-saving measures in homes and will replace inefficient air conditioners when it’s found to be cost effective in high-use homes.

The Weatherization/Rehabilitation program will expand to non-profit and community development corporations that are providing or will provide improvements to the homes of low-income District residents. RETF funds will be used to add an energy efficiency component to the home improvement efforts by selected organizations.

DDOE, the LIHEAP and weatherization grantee, is the designated administrator of the RETF affordability, energy efficiency and renewable resources programs.

Low-income natural gas customers are also benefiting from energy efficiency and rate assistance programs that were approved through the Omnibus Utility Emergency Amendment Act of 2005 that was signed into law January 28, 2005. The Act establishes a Natural Gas Trust Fund (NGTF) to promote energy efficiency and provide assistance to low-income natural gas customers.

The NGTF is funded through a non-bypassable charge on natural gas residential customer bills and is not applied to customers participating in the existing Residential Essential Service program, a discount for Washington Gas customers that was established in 1986.

The PSC initially approved four programs on a pilot basis in January 2006 to be funded under the NGTF. On October 23, 2007, the PSC approved extending three of the programs. The approved programs must be implemented no more than 90 days after the date of the order and will end 2 years after. Funding for each year for all three programs is over $1.7 million.

Programs approved by the Commission include:

• Residential Essential Service (RES) credit expansion increases participation in the RES program by 2,200 participants per program year. The RES discount is available from November through April.
  
  
• Heating System Repair Replacement and Tune-Up replaces or repairs natural gas heating systems in low-income homes.
  
  
• Energy Awareness Campaign promotes energy efficiency awareness and increases low-income participation in natural gas financial assistance programs.

Continuation of the Residential Weatherization and Efficiency pilot for non-low-income homes was not approved by the Commission.

More information about the electric and natural gas programs is available on the LIHEAP Clearinghouse website.

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Maryland EUSP Gets More Funds,
Plus New Revenue Source

An economic downturn and escalating electricity bills prompted Maryland’s legislature to provide an extra $12.3 million this year to the state’s Electric Universal Service Program (EUSP), which provides electric bill payment and arrearage assistance to the state’s low-income.

In two budget amendments approved by the state General Assembly, the last one in April, the EUSP received $12.3 million, bringing the total budget for its fiscal year ending June 30 to $60.9 million. Program applications have increased about 14 percent over 2007 and the state expects to serve 113,000 households with electric bill payment assistance. Last year it served 93,323 with an average benefit of $510. It also provided arrearage assistance totaling $5.1 million to over 10,000 households with an average payment of $486.

At the same time, the state’s LIHEAP, which pays low-income heating bills, and operates in coordination with the EUSP, ran out of money in April. It has reported an enrollment increase of 12 percent.

The EUSP’s increased enrollment and funding needs are a direct result of higher rates — electric bills for all utilities have increased since electric rate caps imposed under the 1999 Maryland restructuring law began to expire in 2006. The increase is especially severe for the 1.1 million customers of the largest utility, Baltimore Gas and Electric — 50 percent in the past year.

Gas bills are up as well — in 2002, the average Marylander paid $789 annually for gas to heat a home; by 2007, the price was up to $1,218.

The EUSP, in effect since 2001, receives $36 million annually from ratepayer funds, and has received state government supplements for the past two years. The FY 2009 budget includes $21.7 million in state funds, along with the $36 million in ratepayer funds.

The program is expected to receive an infusion of funds later this year from a unique source, the Maryland Strategic Energy Investment Fund, part of energy efficiency legislation passed in 2007 and 2008. The Fund will receive proceeds, estimated at $80 to $140 million yearly, from auctions of carbon allowances to power plants, as part of the Regional Greenhouse Gas Initiative. The proceeds will fund energy efficiency investments and financing for homeowners and small businesses as well as clean energy projects.

Legislation passed this year designates the EUSP to receive 17 percent of the revenues from the first auction, to be held this September. It’s estimated the EUSP will receive between $13 and $23 million, but that won’t be known until the first auction.

Additionally, half of the funds for energy efficiency must help low- and moderate-income households and be offered at no charge to low-income families.

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California Implements Categorical Eligibility
for Low-Income Utility Discounts

Low-income customers of the four largest utilities in California can now enroll faster and easier in the utilities’ electricity and gas discount program called CARE (California Alternate Rates for Energy), which provides 20 percent discount. Customers of Southern California Gas, Southern California Edison, Pacific Gas & Electric (PG&E) and San Diego Gas&  Electric can now self-certify on the CARE discount application form that they or someone in their household are recipients of one of these means-tested programs: Medi-Cal, TANF, Food Stamps, WIC, LIHEAP, or Healthy Families A & B.

The change came about as a result of several rulings from the California Public Utilities Commission (CPUC), which has a stated goal of reaching 100 percent of low-income customers that are eligible for, and desire to participate in, the CARE.

In Decision 06-12-038, dated December 15, 2006, the CPUC authorized the utilities to implement “categorical eligibility,” which permits a customer to demonstrate eligibility for CARE with documentation of participation in a government means-tested program rather than having to provide evidence of income. The CPUC has advocated CARE automatic enrollment for recipients of means-tested programs through electronic matches between state administering agencies and utility customer records;  however, this hasn’t happened due to confidentiality issues. 

CARE income maximums are $29,300 for a household of one or two and $41,500 for a household of four, higher than the maximums for the means-tested programs. 

In a press release announcing the change, PG&E said there are still about 400,000 CARE-eligible customers in its territory that are not yet enrolled, while about 1.1 million households receive CARE.  Persons who submit PG&E’s one-page online application can be enrolled in CARE within two business days.

According to a recently-released needs assessment study of California’s low- income utility programs, CARE served nearly 3.7 million households at the end of 2006; however, nearly 1.5 million households were eligible for it but not enrolled.

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Low-Income Energy Conferences Merge into NEUAC

The National Low Income Energy Consortium (NLIEC) and the National Fuel Funds Network (NFFN) have joined forces for the first National Energy and Utility Affordability Conference (NEUAC), June 16-18 in Denver, Colorado.

It’s the largest single gathering in the U. S. that addresses the need for affordable home energy and other utilities for people with low income.

The event combines the long-standing annual conferences of the two organizations, which spanned four and one-half days, into one seamless three-day event without sacrificing the educational quality of the programs that either past conference offered, according to conference leaders.

In addition to a variety of workshops, roundtables and exhibits, a plenary session titled “Energy Policy and Its Impact on Consumer Prices” will address public policy from the perspective of the fossil fuels industry, environmental community and regulatory low-income advocates. The plenary forum features Jim Sims, Executive Director of the Western Business Roundtable, Janee Briesmeister of AARP and moderator Patty Limerick of the University of Colorado at Boulder.

Speakers in a general session will identify issues surrounding climate change and its impact on low-income families. A follow-up workshop will examine two proposals for controlling carbon emissions: cap and trade and carbon tax, and how money generated from either method could be directed to offset the increased costs of home energy for low-income households during this energy transition. Speakers for these sessions are: Robert Greenstein, Center for Budget and Policy Priorities; John Howat, National Consumer Law Center and; Rafe Pomerance, President, Clean Air-Cool Planet.

One entire workshop track will concentrate on tribal issues including: federal and state perspectives of administering LIHEAP, ideas for LIHEAP leveraging and REACH, discussions of current and emerging renewable projects and working with utilities.

The annual meeting of the National Energy Assistance Directors’ Association (NEADA) will convene prior to the joint energy conference on Sunday, June 15.

The conference is located at the Sheraton in downtown Denver and is close to a variety of restaurants, entertainment and shopping.

The conference website has more information on workshops and registration.

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Connecticut Boosts Payments to Heating Oil Vendors

The high cost of home heating oil hurts not only low-income households but also the hundreds of fuel vendors, many of which are small companies, across the Northeast.

As a partial solution, Connecticut Governor Jodi Rell on March 6 authorized the Department of Social Services (DSS), the LIHEAP grantee, to boost payments to participating oil vendors by 4 cents per gallon. The action was designed to help about 300 heating oil vendors who work with the Connecticut LIHEAP making about 600 deliveries of heating oil each day.

“Like their customers,” Rell said, “heating oil dealers are affected by a market driven by factors largely beyond our control. Authorizing the Department of Social Services to increase payments to dealers will not solve the overall problem but should provide some help to our participating dealers.”

Under Connecticut's Fixed Margin Pricing Program for FY 2008, the LIHEAP office paid oil vendors based on the daily New Haven Harbor “average” oil prices published in The Journal of Commerce, plus a fixed margin of 31 cents per gallon, or the vendor’s retail price, whichever is lower. Because of the ups and downs of the oil market, dealers had sometimes paid more for the oil than the DSS reimbursement, according to DSS.

Following the Governor’s directive, the DSS based its payments to heating oil dealers on the New Haven Harbor “high” rather than the “average,” resulting in a per-gallon increase of about 4 cents for deliveries for the remainder of the season. Heating oil prices averaged over $3.50 per gallon in the state this winter.

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Alabama REACH Works With Manufactured Homes

Alabama’s evaluation of its 2004 REACH Manufactured Home Project is complete. The project operated from March 2004 through March 2007 and provided a variety of weatherization, energy education, and budget management services to over 300 low-income participants in 17 Alabama counties.

Participants lived in manufactured homes that were at least 10 years old and had been weatherized. The project aimed to reduce all types of energy use, household energy expenses, energy burden and late payments for energy bills, as well as the elimination or reduction of weather-related health risks for participants.

The evaluation reported that participants didn’t experience a statistically significant change in their energy burden and utility bills, although this may have been partially due to a lack of complete energy data following the interventions. There were statistically significant improvements in family stability, outside home appearance, pride in home, comfort and weather-related health risks at the end of the program.

The project, operated through four community action agencies, provided 122 replacement refrigerators, 46 water heaters, 63 air conditioners, 23 thermostats, 18 heaters and 1,793 compact fluorescent bulbs.

Participants’ safety was improved by the replacement of potentially dangerous space heaters and/or water heaters. Fire danger was also reduced with the removal of old, inefficient combustion type heaters and stoves.

The evaluation was conducted by University of Alabama in Huntsville.

For a copy of the REACH evaluation, contact the LIHEAP Clearinghouse.

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