National Center for Appropriate Technology
States Anxiously Prepare for Winter Heating Season
Before the summer heat waves hit, states had begun planning for the winter of 2008-09 and the heavy energy burdens LIHEAP households will face.
Not only were many states still helping low-income households pay last winter’s bills and cope with disconnections, but they were also hearing that next winter’s heating bills will increase dramatically.
The Energy Information Administration said the average price of natural gas next winter will be 53 percent higher than it was last winter and the cost of home heating oil will increase more than 41 percent from the fourth quarter of 2007 to the fourth quarter of 2008.
As of mid-July, Northeast states were seeing heating oil prices in the $4.50 per gallon range and were worrying how they could assist customers when expected LIHEAP funds won’t even cover a minimum oil delivery of 100 gallons. (According to most predictions, LIHEAP FY 2009 funding will be included in a Continuing Resolution that will likely extend into early 2009 at a preliminary level of $1.98 billion, upon which states will initially base their benefits.)
According to the National Energy Assistance Directors’ Association, the average cost to heat a home this winter will be about $1,114, almost 15 percent more than last year’s $972. The cost of home heating with heating oil is projected to reach $2,593, natural gas $978, propane $1,967 and electricity $875.
In prior years, consumers could better deal with winter heating costs by pre-buying their oil in the summer, but as one New Hampshire dealer said, the costs and risks have become prohibitive. With the current average price of heating oil at $4.53 a gallon, and the average use in New Hampshire about 800 gallons each winter, a pre-buy contract can cost as much as $4,000.
This year, newspaper articles from across the Northeast say heating oil dealers aren’t offering the capped plans because they can’t afford the financial outlays. In fact, the livelihood of some has been threatened. It was reported that three companies had failed in Connecticut.
Vermont, which has had a summer fill program for LIHEAP households since 2002, reported it won’t operate this year. Under the program, participating vendors offered LIHEAP households a capped price based on summer rates, but they also guaranteed a price reduction if prices fell below the price cap.
At its height in 2003, the program had participation from over half of the vendors, saved over $500,000 and helped over 8,500 households. But in recent years, summer prices haven’t gone down as predicted and fewer dealers participated.
Currently the LIHEAP office, the legislature and the Governor’s office are looking for ways to help fuel oil households while also helping dealers remain solvent.
As one way of coping, Vermont opened its application period a week earlier. Maine started taking applications July 14, so that people are in the system and their benefits can be processed once federal money is allocated. (In prior years, Maine subgrantees had the option to open July 14, but most opened later.) Maine forecasts an average benefit at the program’s start of $400; the average LIHEAP benefit last winter was $750. At $4.65 a gallon, the going rate in Maine in mid-July, filling a 275-gallon tank cost $1,279.
Among other ways to cope, sales of wood and pellet stoves are reported to be brisk in Maine and Massachusetts; there were also reports of coal and corn stoves enjoying a revival. Vermont is considering a program whereby the state would provide logs from public lands, which income-eligible people could cut and split themselves.
Natural gas prices usually fall in the summer, when temperatures are warm and the demand for heating fuel is low, but states from Georgia to Oregon have reported that this isn’t the case this summer and they predicted significant increases for households this winter.
September 16-17, 2008 : NFFN’s Victorine Q. Adams Institute, Baltimore, MD. To register for the Institute, visit www.nationalfuelfunds.org.
October 27-30, 2008: National Community Action Foundation — Energy Programs Leveraging Conference, Renaissance Vinoy Hotel, St. Petersburg, FL. More information is available at www.ncaf.org
June 15-17, 2009 : National Energy and Utility Affordability Conference, Doubletree Hotel-Portland Lloyd Center, Portland, Oregon.
The content of this publication does not necessarily reflect the views or policies of the Department of Health and Human Services, nor does mention of trade names, commercial products, organizations or program activities imply endorsement by the U.S. Government or compliance with HHS regulations.
Home Energy Affordability in Indiana : Current Needs and Future Potentials is a comprehensive assessment of Indiana’s low-income energy resources, needs and solutions prepared by Roger Colton for the Coalition to Keep Indiana Warm and released last month.
Colton, who has designed and studied low-income energy programs for numerous states and utilities, said it’s the most comprehensive study he’s ever done, and that much of the information could be applicable to other states.
The report consists of four primary parts: an assessment of the state’s low-income home energy affordability needs, an identification of resources currently available to meet those home energy needs, a review of utility credit and collection activities, including arrears and write-offs, and an exploration of potential additional resources through which to meet the identified home energy needs.
Colton first discussed the state's energy affordability gap, a measurement he created in 2003, that quantifies the gap between "affordable" home energy bills and "actual" home energy bills, in order to estimate the "home energy affordability gap" on a sate-by-state, county-by-county basis for the entire country. It has been updated yearly since 2003.
In Indiana, the average annual shortfall between actual and affordable home energy bills for households at or below 185 percent of federal poverty guidelines reached nearly $1,200 per household during 2007, Colton found. The aggregate home energy affordability gap in Indiana for 2007 reached nearly $640 million statewide.
He concluded the problem of unaffordable energy bills in Indiana is massive and is getting worse.
In discussing the state’s energy assistance resources, Colton noted that LIHEAP is inadequate to fill Indiana’s home energy affordability gap, as is the second largest source of energy assistance money, public and subsidized utility allowances, which pay total utilities (energy, water and sewer) for about 30,000 low-income Indianans and amounted to around $37 million in 2000, the last year for which accurate numbers are available.
The report details the breadth of non-LIHEAP resources, which, in addition to utility allowances, include township assistance funds, utility discounts, private fuel funds, a sales tax exemption for energy purchased by low-income households, the Food Stamp Excess shelter deduction, the Earned Income Tax Credit, and FEMA and TANF funds that are used for utility expenses. Energy efficiency and affordable housing programs are also detailed.
It also examines the state’s utility credit and collection activities with an eye toward identifying ways utilities might adopt more lenient practices, which Colton also labeled as energy assistance, when such practices give a customer more time to pay a bill, or waive a late fee or deposit, for example.
“Perhaps, the best ‘energy assistance’ is the exercise of allowed discretion,” Colton wrote.
Finally, the report identifies and details the following additional resources that could address Indiana's home energy affordability gap:
The report contains tables with county-specific data on poverty levels, housing characteristics, fuel type usage, LIHEAP expenditures, utility allowances, and other assistance resources and more. The report is available on Colton's website.
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As part of a far-reaching Energy Efficiency Portfolio Standard (EEPS), New York's existing low-income energy efficiency programs will see their funding doubled through 2011.
On June 18, the New York Public Service Commission announced the start of what it called one of the most aggressive efficiency programs in the nation.
When fully funded, the program is expected to provide more than $4 billion in benefits to all customers through 2015, while creating thousands of jobs through retrofitting outdated, inefficient residential, commercial and industrial properties, installing new energy efficient equipment, and informing the public about the new opportunities for savings on energy bills.
In its order announcing the EEPS, the Commission directed utilities to start collecting in October an additional $172 million annually in System Benefits Charge (SBC) funding for what it termed “fast track” energy efficiency programs. It said low-income funding should be 20 percent of the fast track programs.
New York already operates efficiency programs for all customers, including low-income, through total funding of about $175 million annually through an SBC that is assessed against customers of six utilities. (See below for more details)
Under the current SBC, utilities collect the SBC revenues from electric customers and transfer the funds to the New York State Energy Research and Development Authority (NYSERDA), which was chosen by the PSC as the third party administrator. Under the EEPS, utilities will also administer a portion of the funds; the exact amount is to be determined.
In addition to the $172 million committed for "fast track" programs, the PSC has invited potential administrators to submit proposals for an additional $160 million annually for electric energy efficiency. The EEPS will also develop an efficiency target for natural gas and $13 million annually through 2011 of new SBC funding will be for natural gas customers' energy programs, including the low income. Details are still being worked out on the scope of the gas efficiency programs and what portion will be run through NYSERDA versus utilities.
SBC funding for low-income initiatives amounts to about $52 million yearly. About $10 million of that funds EmPower New York SM, which provides cost-effective electric reduction measures, particularly lighting and refrigerator replacements, as well as insulation, health and safety measures, and consumer education to households earning less than 60 percent of the state median income and those enrolled in utility low-income payment assistance programs.
The program targets both owners and renters of one- to four-family homes and multifamily buildings with fewer than 100 units. Whenever possible, services are coordinated and cost-shared with the state’s Weatherization Assistance Program.
In 2007, EmPower was expanded to provide natural gas efficiency services to low-income customers of National Grid, National Fuel Gas, and Consolidated Edison using non-SBC funds. According to NYSERDA’s 2007 report on its SBC programs, EmPower New York SM serves about 8,330 households per year, the average cost per household is $1,227 and savings average $231 per year. NYSERDA’s goal is to serve 31,500 households during the five years of the current funding cycle. NYSERDA also operates multifamily low-income energy efficiency programs and provides technical support to the state LIHEAP office for its heating oil buying program, now going into its second year statewide.
While various states have considered and continue to consider supplementing LIHEAP during the summer months with state funds, only two have done so.
On July 3, Wisconsin's Governor Doyle announced the state will provide an additional $1 million in energy assistance funds to help low-income families with disconnections and bill payments.
The funds were released to local county and tribal agencies that administer LIHEAP funds. Households with income at or below 150 percent of the federal poverty level were eligible for assistance.
Montana Governor Brian Schweitzer on July 21 signed an executive order declaring an energy emergency and allocating approximately $1 million in state funds to be used for weatherizing more homes in the state.
The money will be split evenly between the state’s Weatherization Assistance Program grantee, the Department of Public Health and Human Services (DPHHS), and the Governor’s Warm Hearts Warm Homes Initiative, which combines public and private funds, donations and volunteer labor to provide low-cost weatherization.
The DPHHS estimated approximately 2,480 dwellings will receive low/no cost weatherization measures through the latter program and about 169 high energy burden homes will receive full scale weatherization through the weatherization network.
In his order the Governor expressed special concern about high energy prices saying “ in recent months, energy rates have reached record high levels and are predicted by major suppliers to increase by 54 percent or more during the winter months.” He also said that Canadian natural gas formerly destined for Montana is expected to be diverted for use in Canada.
Renewable energy projects are emerging on tribal reservations of South Dakota, where harsh winters force many families to spend up to 70 percent of their income for heat, and heating choices are few and expensive, according to a presentation at the June National Energy and Utility Affordability Conference (NEUAC).
In 2002, Trees, Water and People’s Tribal Lands Renewable Energy Program started on the Pine Ridge Reservation with goals to reduce high energy bills, improve living conditions, especially for elders and children, build renewable energy skills and develop employment opportunities in Native American communities.
Utility bills on Pine Ridge and many other reservations often exceed $400 per month, unemployment is more than 85 percent and 90 percent of families live below the federal poverty level. At Pine Ridge, approximately 60 percent of Lakota tribal members live in poorly insulated mobile homes.
In 2003, Trees, Water and People (TWP), a Fort Collins, Colorado nonprofit organization dedicated to helping communities protect, conserve, and manage natural resources, began installing solar air heaters on Pine Ridge homes as a cost-effective means of reducing energy bills.
A 4-foot-by-8 foot solar air system can save $100 per month (10 – 30 %) on heating bills, and, when combined with weatherization, 50 percent savings can be realized. The systems are comprised of a solar collector, fan and control unit. The systems cost $1,500, including installation, and require almost no maintenance. The system pays for itself in 4 years and has a lifespan of 20-30 years, yielding significant savings, according to TWP.
After several years of installing solar heaters at Pine Ridge, Lakota Solar Enterprises (LSE) was founded and began to manufacture solar heaters on the reservation. In 2005, Alternative Gifts International and the Bush Foundation provided substantial funding to expand the solar heater program. Initially, LSE received pre-manufactured solar panels, built the support structures and installed the units at the recipients’ homes. In 2007, a redesigned panel was developed by TWP that can now be built at the LSE facility.
LSE is headed by Henry Red Cloud, a Lakota elder and a fifth-generation descendent of Chief Red Cloud, the last Lakota war chief. According to Red Cloud, renewable energy is a new way to honor the old ways of showing respect for Mother Earth and protecting the environment.
He added that benefits from the enterprise extend through the reservation by providing jobs and keeping money on the reservation where it is needed. Also, materials and labor are nearby to make the solar heating projects more cost-effective. In addition to the Pine Ridge and Rosebud reservations, the Tribal Lands Renewable Energy Program has brought demonstration solar heat units to eight other reservations across the great Plains and beyond including the White Earth reservation in Minnesota, the Wind River reservation in Wyoming, and the Skull Valley reservation in Utah.
In another part of the country, Debby Tewa, a Hopi woman, is helping bring renewable energy to tribes in Arizona where more than 7 percent of Native American households have no access to electricity. The Tribal Rural Electrification Program (TREP) and a partnership among Arizona State University (ASU), tribes and utilities is bringing photovoltaic (PV) systems to reservations. In 2008, it has assisted in bringing electricity to 25 tribal homes.
A tribe can apply for eight PV panels that are donated by ASU. Recipients of the panels are responsible for obtaining the rest of the system that includes batteries, cables, inverter, safety and monitoring equipment and mounting racks. Tribes may also apply for a $3,000 utility grant to help pay for the components. Tewa teaches Native Americans how to use and maintain photovoltaic units. With off-grid solar electric systems, owners must be energy-conscious in their use and their awareness of the system, including how much energy is stored in the batteries. Tewa said the majority of the people who have PV systems learn to properly use the energy and maintain the systems.
The solar projects also benefit the reservations by creating jobs, developing skilled workers and improving the health and safety of residents. TREP is run by the Arizona Department of Commerce Energy Office with technological expertise provided by ASU Polytechnic Campus' Photovoltaic Testing Laboratory. Presentations by Red Cloud and Tewa are available on NEUAC’s website.
More information about the Tribal Lands Renewable Energy Program and Lakota Solar Enterprises is available on TWP’s website.
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The Heat and Warmth Fund (THAW) in Michigan is collaborating with the faith-based community to provide low-income individuals and families with emergency energy assistance.
The history, achievements and limitations of the collaboration were presented at a workshop at the National Energy and Utility Affordability Conference (NEUAC) in Denver in June.
THAW, a nonprofit organization that began in 1986, has been traditionally supported by community donations, utilities and foundations. While seeking ways to diversify funding, provide additional distribution centers and a safety net for increasing numbers of crisis applicants who exceed income eligibility levels, THAW discovered the faith-based community. Its faith-based initiative was launched five years ago.
According to ZeeRamell Pace, vice president of programming and outreach for THAW, and presenter at NEUAC, faith-based organizations have traditionally been a cornerstone of community assistance and can provide additional resources and mentoring to help move a family towards self-sufficiency.
In partnership with THAW, participating places of worship are asked to host a Sunday collection at least four times per year where congregation members are asked to donate $1 or more. The congregation is advised when the collection will be and the pastors often deliver a sermon with a ‘giving’ message. Media have attended ‘Leap of Faith’ Sunday with live broadcasts. Some of the larger churches have reaped up to $17,000 per collection. All funds go into an account that can be used by any participating church. Those that already serve the needy can become distribution sites for the funds, which are tailored to meet community needs.
In her presentation, Pace noted the following possible limitations of the partnership. Getting the larger churches to buy in is necessary to secure enough funding, staff and resources must be adequate for a full-blown program or non-religious donors may be alienated. On the positive side, she said THAW has learned that faith-based collaborations can maximize choice for clients, including those who are over-income, and provide opportunities for programs to expand and diversify because faith-based organizations can bundle services and create opportunities for grants for specialized services such as childcare.
In 2007, THAW provided over $9 million in assistance to 8,600 households that included $727,301 for 903 households from the faith-based initiative. (THAW’s target is to double the amount in the 2008-09 heating season).
Four counties are currently participating in the initiative; four more are expected to participate this fall and Pace expects that all counties in the state eventually will be involved.
Pace’s presentation is available on NEUAC’s website at www.energyandutilityconference.org/2008 Conference/2008_Speakers & Presenters.htm.
For more information about getting started with a faith-based initiative, contact ZeeRamell Pace at 313-226-9347 or firstname.lastname@example.org
Leveraging awards for activities conducted during FY 2007 will not be distributed, according to an announcement in June from the Office of Community Services, Division of Energy Assistance (DEA).
After reviewing the FY 2008 LIHEAP appropriations language, DEA noted that Congress did not provide appropriations for the LIHEAP leveraging and REACH programs.
Therefore, the $26.7 million that had been set aside for these programs was returned to the FY 2008 LIHEAP block grant and the DEA on June 25 distributed the funds to LIHEAP grantees under the regular block grant formula.
As a result, the final amount of leveraged resources for FY 2007 is not available. However, the Clearinghouse has reviewed preliminary reports from state LIHEAP grantees, as it does annually, to determine leveraging trends each year.
According to preliminary reports, 41 states, 26 tribes and one territory reported more than $2.6 billion in leveraging activities during FY 2007. This compares to 38 states, 26 tribes and one territory reporting about $2.7 billion during FY 2006.
This bucks the trend of annual increases in leveraged resources over the last several years. States reported $83.5 million or 3 percent less in leveraged resources for FY 2007. (Tribal reports were not available.) State government funds fell by $154 million from an unsurpassed high in FY 2006. During the winter of 2005-06, states received record levels of funding from state legislative, regulatory and charitable resources for low-income energy assistance and energy efficiency in response to escalating home energy costs. (See LIHEAPnetworker # 57)
Utility-funded waivers decreased in FY 2007 by $48 million and reported amounts for bulk fuel discounts were also down.
Yet, leveraging amounts for other utility-funded programs increased in FY 2007—utility discounts increased by almost $60 million, utility arrearage forgiveness by $4.5 million and energy efficiency programs by $34 million. Fuel funds and community donations also increased by $19 million.
While a $1 LIHEAP benefit may seem meaningless, it’s a common practice in several states because it can mean increased Food Stamp benefits for low-income families.
Under Food Stamp regulations, receipt of a LHHEAP benefit, regardless of the amount, enables Food Stamp recipients to maximize their Standard Utility Allowance (SUA). Using the highest allowable SUA in the Food Stamp benefit calculation may make otherwise ineligible applicants for Food Stamps eligible and may significantly increase Food Stamp benefits for many households.
New York is the latest state to adopt this practice. Historically, New York families living in subsidized housing with heat included in their rent weren’t LIHEAP eligible. Starting October 1, about 115,000 formerly ineligible households will receive an annual $1 LIHEAP benefit, which will qualify them for the maximum Food Stamp SUA for twelve months.
These changes mean an average increase of $118 in monthly Food Stamp benefits to nearly 115,000 low-income households statewide. Nearly 90,000 households in New York City will see an average monthly hike of $131, while 25,000 households throughout the rest of the state will see an average monthly increase of $72.
The state is also taking steps to make applying for Food Stamps easier. A streamlined application process for low-income working families is being piloted in eleven counties and New York City. Electronic submission and acceptance of Food Stamp applications started in June and will expand statewide in 2009.
The state also launched an interactive website, myBenefits.ny.gov, that allows anyone to prescreen for Food Stamps, school lunch programs and tax credits. LIHEAP screening will be added in the fall with other state programs to follow.
The New York LIHEAP grantee, the Office of Temporary and Disability Assistance, reports that efforts to improve access to Food Stamps are already apparent. As of April 2007, 55,000 new households had enrolled, over halfway to the goal of enrolling 100,000 new households by the end of 2008.
Other states have had programs similar to the one enacted by New York.
Vermont has 4,000 residents, mostly elderly who live in public or subsidized housing with heat included in rent, who receive a $5 annual LIHEAP benefit payment that leverages increases in their Food Stamp benefits from $10 to more than $60 a month.
Maine residents living in subsidized housing with heat included in their rent are eligible for a one-time LIHEAP benefit not to exceed $5, which allows eligibility for Food Stamps.
In Massachusetts the Food Stamp application and re-certification forms have language to auto enroll clients in H-EAT, a special heat assistance program. Enrolled clients are eligible for an increased Food Stamp benefit.
In Washington, the state LIHEAP grantee is implementing a pilot program to pay an automatic $1 minimum LIHEAP benefit to categorically eligible households, so that they will get additional Food Stamp benefits.
While some states are running cooling programs as usual, others have reduced budgets, and one has begun a new program.
For the first time, New York is operating a summer cooling program that will provide air conditioners to households with documented medical needs.
To be eligible, applicants must meet LIHEAP income guidelines and have at least one member of the household that suffers from an acute medical condition that is exacerbated by extreme heat. Written documentation from a physician indicating the need for an air conditioner is required and must be dated within the previous six months.
A total of $2.4 million from the LIHEAP weatherization set-aside will be spent, with $1.2 million distributed through the WAP subgrantee, the Division of Housing and Community Renewal. Weatherization agencies will purchase and install the units, or will provide fans if air conditioners can’t be installed. The units will be provided on a first-come first-served basis through Sept. 30 or until all funds are exhausted.
The remaining half of the finds will be distributed through the New York City Department of Aging for a separate cooling program. Electric bill payments aren’t provided, although if applicants haven’t already received LIHEAP they can apply for it.
In Illinois, as part of the 2008 Keep Cool Illinois campaign, low-income residents began applying for help with their summer energy bills starting July 7. Governor Rod Blagojevich authorized the use of up to $10 million in assistance, which includes LIHEAP funds and a $3 million contribution from the utility Ameren. Newspaper reports said people have applied in record numbers for electric bill assistance.
Ohio is running a reduced summer crisis program because heavy demand for the winter crisis program depleted the crisis budget. Benefits have been cut from $175 to $100 and the program opened July 1 instead of June 1. Air conditioners or fans may be available on a limited basis. To be eligible, households must have a member who is at least 60 years old or can provide physician documentation of medical necessity.
For the second year in a row, Delaware is operating a very limited cooling assistance program because LIHEAP funds were nearly depleted through winter heating and crisis. Applicants were referred to another agency that had some state money and to charitable organizations. In prior years, Delaware spent about 7 percent of its LIHEAP grant on cooling, providing electric bill payments, fans and air conditioners.
Virginia is operating its program as usual with a budget of about $7 million, offering electric bill payments of up to $150, payment of security deposits for electricity to operate cooling equipment, repair of cooling equipment, and purchase of a whole house fan or one window air unit.
Pennsylvania's universal service programs for low-income households spent almost 14 percent more for rate assistance in 2007 than they did in 2006, although the number of households receiving such assistance declined.
This is according to the latest annual report released by the Pennsylvania Public Utility Commission (PUC) summarizing the universal service programs and collections performance of each of the state’s major electric and natural gas distribution companies.
Total spending for rate assistance was $330.3 million, compared to $290 million during 2006. The most common form of utility rate assistance in Pennsylvania is the Customer Assistance Program (CAP). In place at most major gas and electric utilities for over a decade, CAPs usually provide a percentage-of-bill or a percentage-of-income payment plan, wherein low-income customers' utility payments are based upon their incomes and/or utility bills. Some programs include utility arrearage forgiveness; others provide flat rate discounts or bill credits.
Energy efficiency services are provided under the Low Income Usage Reduction Program (LIURP). The number of households receiving rate assistance under the CAPs fell by 8,923 households or 2.2 percent during 2007 compared to 2006. The number receiving energy efficiency services increased by about 1,000 households or 4.2 percent.
Highlights from the 2007 report show that electric companies:
Highlights also include that natural gas companies:
Generally, Pennsylvania households enrolled in universal service programs have average household incomes that are less than $15,500 a year. According to the report, the gross write-offs ratio for the electric industry was 2.04 percent in 2007, compared to 1.86 percent in 2006, while the natural gas industry average was 4.10 percent in 2007 and 5.39 percent in 2006.
More than 700 people gathered in Denver, Colorado, on June 16-18, 2008, when the National Fuel Funds Network and National Low Income Energy Consortium convened the first National Energy and Utility Affordability Conference titled Mile High Solutions.
The three-day event combined the annual conferences that the NFFN and NLIEC had presented on five consecutive days since the mid-1980s. The 2008 conference was the largest single U.S. gathering to address the need for affordable home energy and other utilities for people with low income.
Workshop topics included close-ups of low-income energy programs operated by states, tribes, utilities, fuel funds and other nonprofits. In plenary sessions, participants were given an overview of the current energy policy from the perspective of industry, government, environmentalists and low-income advocates. Additionally, the latest climate change studies were presented, along with varying perspectives from presenters on how to deal with it, including how it will impact low-income households and how harmful impacts can be mitigated.